Over the last two decades law and order situation of the country, particularly of the metropolitan cities like Karachi and Lahore, has become complex. Karachi, the economic hub of Pakistan, has been facing severe security problems. The growing sense of insecurity among households and businesses has created a demand for private security services. Currently, more than 800 private security companies / agencies are operating throughout the country. The demand for security services is still on the rise and the sector is currently growing at 5 – 6% per year.
Security agencies in Pakistan offer various services such as security guard services, executive escort services, security / burglar alarm, vehicle tracking, armored car services and cash-in-transit services, etc. The proposed security agency is envisaged to provide only general and executive security guard services to the corporate / business sector through armed personnel deployments. Security management staff including Manager (operations) and Shift Supervisors would facilitate and manage security services along with the recruitment, training, business promotion and management activities.
The security agency is proposed to be established as a Private Limited Company or as a Single Member Company under the Companies Ordinance 1984.
Following guidelines can assist you in running the agency successfully:
- Build contacts/linkages in the corporate sector
- Recruit trained and experienced resources
- Provide adequate training
- Provide reasonable pay compensation
- Offer professional working environment
Considering a twelve (12) hour shift / duty cycle it is assumed that the proposed security company has the capacity to hire and deploy 100 security guards. However, the company is estimated to operate with 58 security guards with an investment cap of Rs. 2.2 million. Sales are estimated to increase by 10% due to increase in service charges. The license to operate from the Provincial Home Department would also include 58 weapons licenses.
Location for a security agency office largely depends on the type of security services provided to the client. For the success of the project, it is important to find a location in or near a business and / or financial hub of a major city like Karachi, Hyderabad, Larkana, Sukkur, Multan, Lahore, Gujranwala, Faisalabad, Sialkot, Gujrat, Rawalpindi, Islamabad, Quetta, Hub, Lasbela or Peshawar etc. Establishing the office in large cities would have an advantage of being close to large corporate clients, financial institutions and multinational clients.
Communications equipment and local weapons are easily available in the market and an entrepreneur has the choice to select from international brands such as Winchester, Berretta, SIG Sauer, Glock etc., Chinese weapons or Local Darra Made weapons and communication equipment made by Motorolla, Kenwood and ICom are also available in the local market and are used by most companies.
Requirements for Security Agency Registeration in Pakistan
Due to sensitivity of the business, Agency Director has critical responsibilities. He would be required to directly interact with management staff and closely monitor the Agency’s day to day activities.
Manager operations is proposed to be reporting directly to the Owner / Director and would be responsible for supervising operations in the field/locations. His assignment depends on the level and span of operations that the agency is carrying out on a particular location. Manager operations should preferably be an Ex-Serviceman.
Shift and Deployment Supervisors
All supervisors would be operational in charge of security locations. They would report to manager operations and assign duties and monitor performance of the guards. They will also coordinate with clients’ security officers.
Guard / Special Guard
Guard would be a “Sipahi” level person and would report to the supervisor. The guard would perform duties assigned to him such as guarding entrance and exit of the premises, checking vehicles movement and carrying out physical and baggage search etc. ‘Special Guards’ would be a commando level ex-serviceman, who generally would perform Executives Escort duty and would be responsible for their security. Retired SSGC commandos are recommended to be recruited for this position.
Arms and Equipment
All arms and equipment require regular maintenance which costs around 1% to 5% of the arms/equipment costs depending upon the usage. The guards of Private Security Companies are required to be properly trained and equipped. Weapons cannot be displayed by these guards outside the premises being guarded by them.
Uniforms for guards would include shirt, trousers, belt, cap, boots and socks (two uniforms per guard) and would be purchased annually. The cost of uniforms for 63 personnel is estimated at Rs. 151,200 (Rs. 1200/uniform). The cost of uniforms is estimated to increase by 10% per year.
Preliminary & Licensing Expenses
The provision for preliminary expenses is assumed to be Rs. 20,000. The cost of license to operate and licenses for weapons and communications equipment is assumed to be Rs. 343,000.
Investment Required for Security Company Registration in Pakistan
Total cost estimates for starting a security company in Pakistan are Rs. 2.19 million, with a fixed investment of Rs. 1.40 million and an initial working capital requirement of Rs. 0.79 million. Given the cost assumptions IRR and payback are 52% and 2.16 years respectively. Details for financial analysis can be studied in the pre-feasibility study of starting a security company in Pakistan by SMEDA.
Requirements for Security Company License in Pakistan
The Private Security Companies in Pakistan are required to function in the Provinces under Provincial Ordinance / rules being framed in the light of the Ordinance issued by the Federal Government. Following are provincial government license requirements for security companies:
- Regulations of Security Company Registration in Punjab
- Regulations of Security Company Registration in KPK
- Regulations of Security Company Registration in Balochistan
- Regulations of Security Company Registration in Sindh
Procedure to Get License/NOC for Security Company Registration in Pakistan
Whoever desires to have NOC of the Provincial Government for business of private security company is required to fulfill the following conditions:
- Application to Home Secretary for NOC to operate in the province
- Incorporation Certificate from Security Exchange Commission of Pakistan
- Memorandum & Articles of Association
- Form 29 duly verified by the Security Exchange Commission of Pakistan
- Bio-date of Directors of the company
- CNICs and photographs of the Directors
- NTN Certificate of the company
- Antecedent verification report of the Director(s)
- Undertaking on Stamp Paper regarding restrictions mentioned in the Rules
- Bank Account statement of the company
- Proposed office address in the province
The application and above documents are scrutinized in the Home & T.A Department, and if found correct, the case is processed for approval of the licensing authority to grant security company license/NOC.