Trusts play a crucial role in social development, offering a structured and legally recognized way to contribute to education, healthcare, poverty alleviation, and community welfare. Setting up a charitable trust requires legal compliance, financial planning, and long-term management strategies to ensure sustainability.

This guide explores the key components, legal framework, registration process, compliance requirements, and benefits of establishing a trust in Pakistan.

Understanding Trusts: Key Components

To establish a trust, three fundamental elements must be present:

1. Settlor (Author of the Trust) – The individual or organization that creates and donates assets to the trust.
2. Trustee(s) – The person(s) or entity responsible for managing the trust and ensuring compliance with its objectives.
3. Beneficiaries – The individuals or groups who benefit from the trust’s activities.

A Trust must have a defined charitable purpose and possess assets such as funds, property, or land.

Legal Framework for Trusts in Pakistan

Trusts in Pakistan are governed by the Trusts Act, 2020, which provides a legal structure for trusts. Trusts focus on philanthropic activities such as education, healthcare, and social welfare and benefit from certain legal flexibilities to ensure smooth operations.

Lawful Purpose of a Trust

A trust must serve a lawful purpose, ensuring that it:

Complies with legal provisions and does not violate any laws.
Is not fraudulent or created to mislead others.
Does not harm individuals or infringe upon their rights.
Does not promote immoral activities or conflict with public policy.

Failure to adhere to these principles may result in legal action or dissolution of the trust.

Step-by-Step Guide to Registering a Trust in Pakistan

Step 1: Drafting the Trust Deed

The Trust Deed serves as the foundation of the trust and must include:

• • Name of the Trust

• • Registered Address

• • Objectives (e.g., education, healthcare, poverty alleviation)

• • Details of Trustees

• • Duties and Powers of Trustees

• • Management & Administration Structure

• • Rules for Dissolution of the Trust

Step 2: Stamping and Notarization

• • The Trust Deed must be executed on stamp paper (stamp duty varies by province).

• • It must be notarized by a notary public for legal authentication.

Step 3: Registration with the Sub-Registrar

Submit the Trust Deed to the Sub-Registrar Office , along with:

CNIC copies of the Settlor and Trustees
Proof of address of the registered office
Rental Agreement or NOC (if applicable)
Bank Challan Fee Payment Receipt
Photographs and thumbprints of Trustees
Verifications : All Legal Departments
NOCs : Obtain NOC from Home Department
Certificate : Obtain certificate from Directorate of Industries

Step 4: Obtaining an NTN from FBR

• • Register with the Federal Board of Revenue (FBR) to obtain a National Tax Number (NTN).

Step 5: Opening a Bank Account

• • Once registered, the trust must open a dedicated bank account.

• • The bank typically requires:
    
    • • Trust Deed
    • • NTN Certificate
    • • Trustee details

Step 6: Compliance and Ongoing Operations

• • The trust must maintain legal compliance and submit tax returns if applicable.

• • Annual reports and audits are required to ensure transparency and regulatory adherence.

Dissolution of a Trust

A trust may be dissolved under the Trusts Act, 2020.

Final Thoughts

Establishing a trust in Pakistan is a structured process that requires legal planning, compliance, and effective governance. A well-managed trust ensures long-term social impact by supporting communities in need.

Whether you are an individual, corporate entity, or NGO, setting up a trust can be a powerful tool to create sustainable and meaningful change.

If you want to register a trust, contact us today at info@sanaullah.co.