Is affiliate marketing legal in Pakistan?

Short answer: Is affiliate marketing legal in Pakistan?

Yes. Affiliate marketing is legal in Pakistan. There is no law that prohibits earning affiliate commissions as a blogger, YouTuber, influencer, or website owner. However, your activity must comply with Pakistan’s general laws on commerce, taxation, advertising, cybercrime, and consumer protection. If you earn income, you must report and pay applicable taxes, and if you promote products, you must avoid deceptive marketing and make clear disclosures.

What is affiliate marketing? (Quick refresher)

Affiliate marketing is a performance-based model where you earn a commission by promoting a merchant’s product or service through a unique tracking link. When your audience clicks the link and buys or completes a desired action (sale, signup, install), you earn a commission.

• Common platforms: blogs, YouTube, Instagram, Facebook, TikTok, email newsletters, and niche websites.
• Common models: pay-per-sale (CPS), pay-per-lead (CPL), pay-per-action (CPA).
• Common verticals: e‑commerce, SaaS, web hosting, finance, travel, education, and digital products.

In Pakistan, many creators participate in international programs (e.g., Amazon Associates) and local programs (e.g., Daraz Affiliate Program), receiving commissions via bank transfer or providers like Payoneer.

Legal framework in Pakistan (laws that apply)

While there’s no “Affiliate Marketing Act,” your activities fall under several existing legal and regulatory areas:

1) Income and business laws

• Income Tax Ordinance, 2001 (administered by the Federal Board of Revenue, FBR) applies to your affiliate income, which is typically treated as business income or income from other sources.
• If you incorporate a company, the Companies Act, 2017 (regulated by the Securities and Exchange Commission of Pakistan, SECP) applies.

2) Sales tax on services (provincial)

Services are taxed by provincial revenue authorities, not the FBR. Depending on your business model, you may fall under “advertising,” “digital marketing,” or “IT/ITeS” service categories. Authorities include:

• Punjab Revenue Authority (PRA)
• Sindh Revenue Board (SRB)
• Khyber Pakhtunkhwa Revenue Authority (KPRA)
• Balochistan Revenue Authority (BRA)

Export of services (selling services to non-residents with foreign exchange inflow) can be exempted or zero-rated in some provinces if specific conditions and documentation are met. Rules vary—confirm with your provincial authority.

3) Advertising and consumer protection

• Competition Act, 2010 prohibits deceptive marketing practices (misleading claims, fake reviews, false endorsements).
• Consumer protection acts at the provincial level (e.g., in Punjab, Sindh, KP, Balochistan) require truthful representations and fair dealing.
• For TV/radio ads, Pakistan Electronic Media Regulatory Authority (PEMRA) regulations apply. For online content, general laws and platform policies apply.

4) Cybercrime and online content

• Prevention of Electronic Crimes Act (PECA), 2016 addresses electronic fraud, identity theft, spamming, unauthorized access, and other cyber offences.
• Pakistan Telecommunication Authority (PTA) may regulate unlawful online content; follow platform and national content rules.

5) Intellectual property

• Respect trademarks and copyrights when using brand assets, images, and product names. Use official media kits where possible and comply with brand guidelines.

6) Data and privacy

• Pakistan’s dedicated personal data protection law has been under consideration; in the meantime, practice privacy-by-design.
• If you target users in the EU or other jurisdictions, you must comply with their data laws (e.g., GDPR) for cookies, consent, and user rights.

Taxes: Income tax, sales tax on services, and filings

Income tax (FBR)

• Individuals and sole proprietors: Your affiliate earnings are taxable. Register for an NTN on the FBR portal (IRIS), file annual income tax returns, and pay any due tax advance or at year-end based on slabs.
• Companies: File corporate income tax returns and meet withholding and compliance obligations.
• Foreign income: Affiliate commissions from abroad are part of your taxable income if you are a tax resident of Pakistan. Tax incentives may apply to IT/ITeS exports from time to time—verify current-year rules on FBR’s website or with a tax advisor.

Sales tax on services (provincial)

Whether provincial sales tax applies depends on the nature of your service and where it is consumed.

• Local services (to Pakistani clients): Many provinces tax advertising/digital marketing services within the province.
• Exported services (to foreign clients): Often exempted or zero-rated subject to proof (foreign currency receipt, contracts, invoices). Rules differ by province.

Record-keeping and invoicing

• Maintain affiliate dashboards, commission statements, bank statements, Payoneer statements, and invoices (where applicable).
• Retain contracts or program terms and any correspondence with networks or merchants.

Business setup: NTN, sole proprietorship vs company

You can run affiliate marketing as a sole proprietorship or incorporate a company. Choose based on scale, liability, and brand needs.

Sole proprietorship (common for creators)

• Register for NTN with FBR via IRIS using your CNIC.
• Open a business bank account (optional but recommended).
• Register with your provincial revenue authority if your services are taxable or you need to claim export benefits.

Private limited company

• Incorporate with SECP, obtain NTN, and fulfill corporate filings.
• Better for scaling, partnering, or working with enterprise advertisers.

Disclosure and advertising compliance

Transparency builds trust and reduces legal risk. Even though Pakistan has limited formal influencer disclosure rules, you should:

• Clearly disclose affiliate relationships near the link or before the recommendation. Example: “This post contains affiliate links. If you buy through my link, I may earn a commission at no extra cost to you.”
• Use truthful, evidence-based claims. Avoid exaggeration and unsubstantiated “best” claims.
• Separate opinion from fact and disclose any paid sponsorships.
• Avoid fake reviews or fabricated testimonials (Competition Act prohibits deceptive marketing).
• For email marketing, obtain consent and provide an unsubscribe option. Avoid spam.

Website legal pages

• Privacy Policy: Explain data you collect (analytics, cookies, email), purposes, retention, and third parties.
• Affiliate Disclosure: State programs you participate in (e.g., Amazon Associates) and that you may earn commissions.
• Terms of Use: Basic rules for site use and disclaimers (not financial/medical advice, etc.).

Getting paid in Pakistan (Payoneer, bank remittances, SBP)

Most international networks pay Pakistani affiliates via:

• Payoneer (widely used for affiliate payouts, including from Amazon Associates, CJ, Impact, and ShareASale via alternate payout setups)
• Direct international bank transfer (SWIFT) in USD or PKR
• Wire via intermediary payment processors

Foreign exchange and banking

• Use the correct purpose codes for export of services/freelance income per your bank’s guidance and the State Bank of Pakistan (SBP) foreign exchange manual.
• Maintain FIRC/e‑advice slips and contract confirmations for tax and audit support.
• PayPal is not locally available; Payoneer and bank wires are the common alternatives.

Affiliate programs and networks that accept Pakistan

While availability changes, many networks accept Pakistani publishers:

• Amazon Associates (affiliate program for Amazon marketplaces; ensure you meet their traffic and disclosure rules)
• Daraz Affiliate Program (regional e‑commerce)
• Impact, CJ (Commission Junction), ShareASale, Rakuten Advertising
• PartnerStack (B2B SaaS), Awin, FlexOffers
• Web hosting and domain programs: Hostinger, Namecheap, Bluehost, Cloudways
• Digital product networks: Digistore24 (availability varies), Gumroad partner links, app stores

Compliance checklist (step-by-step)

1. Decide your structure: start as a sole proprietor; consider incorporation when scaling.
2. Register for NTN (FBR IRIS) and keep your tax profile active.
3. Open a dedicated business bank account and set up Payoneer (if needed).
4. Assess provincial obligations: contact PRA/SRB/KPRA/BRA to confirm registration needs and export-of-services treatment for your model.
5. Add legal pages to your site: Privacy Policy, Terms, Affiliate Disclosure.
6. Implement clear, visible affiliate disclosures on posts, videos, and social media captions.
7. Keep records: affiliate dashboards, payout reports, contracts, invoices, bank advice slips.
8. Follow content rules: no deceptive claims, no counterfeit or prohibited goods, respect IP rights.
9. File annual returns (FBR) and any required provincial statements; pay due taxes.
10. Re-check policies yearly: FBR, provincial revenue, SBP, and affiliate program terms can change.

Common mistakes to avoid

• Not registering for taxes because “it’s online.” Online income is still taxable.
• Skipping disclosures on YouTube/Instagram captions and blog posts.
• Promoting restricted or counterfeit products (risking account bans and legal exposure).
• Using trademarked terms in domains (e.g., brandname-discounts.pk) that infringe IP.
• Neglecting provincial rules: assuming export status without documentation.
• Poor record-keeping; not retaining payout proofs and program communications.
• Relying on a single traffic source or network, increasing business risk.

FAQs

Is affiliate marketing legal in Pakistan?

Yes. It’s legal as long as you comply with tax, advertising, and cyber laws, avoid deceptive practices, and make proper disclosures.

Do I need to register a company?

No. Many start as sole proprietors with an NTN. You can incorporate later for scaling, brand credibility, or partnerships.

Do I have to pay tax on affiliate income?

Yes. Pakistani tax residents must declare affiliate income. If your earnings are from foreign sources, they’re generally taxable in Pakistan; incentives for IT/ITeS may apply subject to conditions. File annually with FBR.

Do I need to register for sales tax on services?

It depends. If your service is taxable in your province or you need to claim export-of-service benefits, registration with PRA/SRB/KPRA/BRA may be required. Confirm with your local authority.

How do I disclose affiliate links?

Place a clear statement near the link or at the start of content: “I may earn a commission if you buy through my link.” On YouTube, add it to the description and mention it verbally if possible.

How do I get paid without PayPal?

Use Payoneer, direct bank transfer (SWIFT), or other supported payout options from your affiliate network.

Is Amazon Associates allowed in Pakistan?

Yes. Many Pakistani creators use Amazon’s program. Ensure you meet their content rules and disclosure requirements, and choose a supported payout method.

Conclusion

Affiliate marketing is legal in Pakistan and can be a sustainable online business for bloggers, influencers, and niche website owners. Treat it like a real business: register with FBR, understand provincial service tax rules, keep clean records, and disclose affiliate relationships clearly. Follow content and cyber laws, respect IP, and use compliant payout channels. With the right foundation, you can grow affiliate income confidently and responsibly.

Helpful references (official portals)

• FBR (IRIS portal and tax guides): https://www.fbr.gov.pk/
• SECP (company registration): https://www.secp.gov.pk/
• Punjab Revenue Authority (PRA): https://pra.punjab.gov.pk/
• Sindh Revenue Board (SRB): https://www.srb.gos.pk/
• Khyber Pakhtunkhwa Revenue Authority (KPRA): https://www.kpra.gov.pk/
• Balochistan Revenue Authority (BRA): https://bra.gob.pk/
• Competition Commission of Pakistan (CCP): https://cc.gov.pk/
• Pakistan Telecommunication Authority (PTA): https://pta.gov.pk/