Dropshipping has become increasingly popular in Pakistan over the past few years. With more people searching for online business ideas that require little investment, dropshipping stands out as an appealing option. However, many wonder if it is legal to run a dropshipping business in Pakistan. The answer isn't straightforward. This guide will break down everything you need to know about dropshipping in Pakistan and explain its legal status in 2025.

What is Dropshipping and How Does It Work in Pakistan?

Dropshipping is a type of e-commerce business where the seller does not keep any inventory. Instead, when a customer places an order, the seller forwards it to a third-party supplier who ships the product directly to the customer. This model eliminates the need for warehouse space or upfront stock purchases.

Dropshipping is growing quickly in popularity among young entrepreneurs, freelancers, and students in Pakistan. Many are creating online stores using platforms like Shopify, WooCommerce, and Daraz.pk to sell products to both local and international markets. Most Pakistani dropshippers get their products from AliExpress, Alibaba, or local wholesalers and use Facebook ads, TikTok, or Instagram to promote and sell them.

Despite its simplicity, dropshipping is a real business. It involves customer service, marketing, taxes, and legal responsibilities. To succeed and avoid future legal problems, understanding the local regulations is essential.

Is Dropshipping Legal in Pakistan?

Yes, dropshipping is legal in Pakistan as long as it follows the local business laws and tax regulations. The government of Pakistan does not have any law that directly bans dropshipping. However, like any other business, it must operate within the framework of national laws.

E-commerce businesses, including dropshipping, are legal in Pakistan. The Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR) manage business regulations and taxes. While there are no specific laws for dropshipping, general business rules still apply.

Dropshippers must ensure that their activities do not involve the sale of counterfeit products, illegal imports, or fraud. Any such activities could lead to legal consequences. If you're planning to run your store professionally, it is highly recommended to understand and comply with SECP and FBR requirements.

License Required for Dropshipping in Pakistan

Although you can technically start a dropshipping business without registering it in the beginning, it is always advisable to legalize your business. Having a business license is not just about legality—it also increases your credibility and allows you to scale your operations.

In Pakistan, setting up your business as a sole proprietorship or private limited company provides legal protection and simplifies dealing with banks, payment systems, and global platforms. After registration, you’ll receive a National Tax Number (NTN), which is necessary for paying taxes and filing returns.

Not having a business license could create problems down the line. For instance, you may be unable to open a business bank account, access payment solutions like Payoneer or Stripe, or deal with large suppliers. As the government increases its scrutiny on online businesses, operating without a license could invite unwanted attention from tax authorities.

How to Register a Dropshipping Business in Pakistan?

Starting a legal dropshipping business in Pakistan is easy if you take the right steps. Begin by choosing your business structure. Many prefer a sole proprietorship because it’s simple and affordable. You can register your business name with the Federal Board of Revenue (FBR) or, for a private limited company, with the Securities and Exchange Commission of Pakistan (SECP).

First, apply for a National Tax Number (NTN) to handle your taxes. Then, set up a business bank account under your company’s name. This keeps your personal and business finances separate and gives your business a more professional image.

If you’re selling products locally, you may need to register for sales tax as well. For international dropshipping, sales tax usually depends on the country where your customers are based. You should also comply with import regulations if your products are being shipped into Pakistan.

Is Dropshipping from AliExpress to Pakistan Legal and Safe?

Many Pakistani dropshippers use AliExpress as their main supplier due to low prices and a wide range of products. Dropshipping from AliExpress to Pakistan is legal as long as you are not violating any import restrictions or selling banned items.

However, it's important to be cautious. Sometimes, the products shipped from AliExpress might be held at customs if they are not properly declared or if they are restricted goods. Always check Pakistan Customs’ list of banned or restricted items before listing any product on your website.

Also, consider the customer experience. AliExpress deliveries can take several weeks to arrive in Pakistan. You must clearly communicate delivery timelines and refund policies to avoid customer complaints or legal disputes related to late delivery or misrepresentation.

Risks in Dropshipping Business in Pakistan

Although dropshipping is legal, it does come with legal risks if not managed properly. One major risk is selling counterfeit or branded items without authorization. Many dropshippers are tempted to list trending branded products without checking whether the supplier has the rights to sell them. This could result in copyright infringement claims or account bans on platforms like Shopify or Facebook.

Another legal risk is false advertising. If your product descriptions or images mislead customers, you could face consumer complaints or legal action. In Pakistan, consumer protection laws are becoming more active, and misleading advertisements can lead to fines or even lawsuits.

Tax evasion is another serious issue. Running an unregistered business and not paying taxes may save money temporarily, but it can lead to penalties in the future. Once the FBR starts tracking your online income through bank accounts or digital payments, you may be liable for unpaid taxes along with fines.

Ensure Your Dropshipping Store is Legally Compliant

To stay compliant, register your business with the FBR and get your NTN. Make sure to file your income tax returns on time and keep track of your sales and expenses. If you’re selling locally, register for sales tax if needed.

Be honest with your customers. Include a clear return policy, terms of service, and privacy policy on your website. These documents protect your business and help build customer trust.

Make sure your product listings are clear and honest. Avoid using fake reviews or edited images that don’t match the actual product. Do not sell items that are illegal or banned from being imported into Pakistan. Always verify your supplier’s credentials to ensure they are trustworthy and authorized to sell the products you’re offering.

Dropshipping Taxes in Pakistan

Some people think that online businesses don’t have to pay taxes, but that’s not true. Dropshipping businesses in Pakistan must pay income tax just like other businesses. Once you are registered and have your NTN, you need to file tax returns every year and report your income from dropshipping.

In most cases, sales tax is not applicable for international customers, but it might be applicable if you're selling within Pakistan. Customs duties also apply when importing products into Pakistan for local delivery. If your dropshipping model involves warehousing or bulk importing, you may have to deal with import taxes and customs declarations.

The FBR has become increasingly active in tracking online income. Payment gateways, banks, and even courier companies can report transactions. Therefore, keeping your business transparent and filing taxes regularly helps you avoid penalties or audits.

Is Shopify Dropshipping Legal in Pakistan?

Yes, Shopify dropshipping is completely legal in Pakistan. Shopify is a global e-commerce platform that allows users to set up their online stores and integrate with dropshipping apps like Oberlo or DSers. Many Pakistani entrepreneurs use Shopify to sell to international markets, especially in the USA, UK, Canada, and the UAE.

However, legality depends on how you run your business. You must still register your business, pay taxes, and ensure that your store policies comply with Pakistani and international laws. You should also be careful about the type of products you sell and the countries you ship to, as each country may have different import restrictions.

Shopify allows integration with payment gateways like PayPal and Stripe, but these are not natively supported in Pakistan. Most Pakistani dropshippers work around this by using third-party solutions or registering companies in other countries. While this method works, it’s important to ensure it doesn’t violate any local laws or platform rules.

Final Thoughts: Is Dropshipping Legal  in Pakistan?

Dropshipping is indeed a legal and growing business model in Pakistan. However, just like any other business, it comes with responsibilities. You need to register your business, file taxes, ensure product authenticity, and comply with consumer protection laws. The key to success lies in running your store professionally and transparently.

By following the proper legal procedures and maintaining ethical business practices, you can build a sustainable and profitable dropshipping business in Pakistan. As e-commerce continues to grow, the opportunities for online entrepreneurs are expanding, but so are the rules. Staying informed and compliant will keep your business safe and help you grow without unnecessary risks.