PEC Firm LICENSE Upgradation Guide: Unlock Higher Categories & Projects in pakistan

Are you a PEC-registered engineering firm in Pakistan looking to elevate your status and unlock new opportunities? PEC firm upgradation is the key. Whether you’re aiming to enhance your credibility, expand your service offerings, or compete for larger projects, upgrading your PEC registration is a strategic move.

In this comprehensive guide, we’ll walk you through the entire process, step by step, ensuring you’re well-equipped to navigate the requirements and emerge with a higher-grade PEC registration.

Why PEC Firm Upgradation Matters

Before we dive into the how-to, let’s address the “why.” PEC firm upgradation opens doors to bidding on larger projects, both nationally and internationally. It enhances your firm’s credibility, demonstrating a commitment to quality and expertise. In essence, upgrading your PEC registration is a strategic investment in your firm’s growth and reputation.

• Enhanced Credibility
• Expanded Project Scope
• Increased Revenue Potential
• Competitive Edge

Here’s a more detailed breakdown of why PEC upgradation is crucial:

Unlocking High-Value Projects

• Financial Growth
• Technical Challenges
• Market Leadership

Higher PEC grades open doors to larger, more lucrative projects that were previously out of reach. This translates to increased revenue and profitability for your firm.

These bigger projects often present exciting technical challenges, allowing your engineers to develop their skills and expertise.

So, just by competing and delivering on major projects, you position your firm as a leader in the engineering sector.

Establishing Trust and Credibility

• Client Confidence
• Partner Attraction
• Industry Recognition

A higher PEC grade is a powerful symbol of your firm’s capabilities and experience. It instills confidence in potential clients, making them more likely to choose you over lower-graded competitors.

Established firms and organizations often prefer to partner with higher-grade PEC firms, opening up opportunities for collaboration and joint ventures.

Upgrading your PEC grade demonstrates your commitment to excellence and adherence to industry standards, enhancing your reputation.

Expanding Your Horizons

• Diversification
• Geographic Reach
• Talent Acquisition

Higher PEC grades may allow you to expand into new service areas and sectors, diversifying your portfolio and reducing reliance on a single market.

With a higher grade, you may be able to bid on projects in other regions or even countries, increasing your firm’s reach.

Top engineering talent is attracted to firms with a strong reputation and challenging projects. Upgrading your PEC grade can help you attract and retain the best employees.

Navigating Regulatory Requirements

• Compliance
• Risk Mitigation

Upgrading your PEC registration ensures you meet the latest regulatory requirements and industry standards, avoiding potential legal issues.

Higher grades often come with stricter quality control measures, reducing project risks and potential liabilities.

Staying Ahead of the Curve

• Continuous Improvement
• Innovation

The PEC upgradation process encourages firms to continuously evaluate and enhance their operations, ensuring they stay competitive in an evolving market. By taking on more complex projects, firms are often driven to innovate and develop new solutions, fostering a culture of creativity.

PEC Firm Upgradation – Step by Step Guide

The PEC (Pakistan Engineering Council) has different license categories based on project costs, with eight categories each for constructors and operators. C6 is the starting point for constructors, and O6 is for operators. To learn more about PEC license limits, you can check out our article on “PEC License Categories and Limits in Pakistan”

Every contractor or operator dreams of moving up to a higher PEC category—from C6 to C5, and so on. But how does one actually upgrade their PEC license in Pakistan?

There are three main ways to get a higher-category PEC license:

1. Register your new construction company directly in a higher category.
2. Request an upgrade for your existing PEC-registered firm.
3. Register an engineer-owned firm with PEC.

We’ll dive into the details of each option to help you decide which path is right for your company.

Upgrading Based on Financial Strength

Previously, PEC-registered firms could upgrade their license by demonstrating their financial worth. However, as per the latest PEC bylaws (dated February 2, 2022), new registrations and upgrades based on net worth are no longer allowed.

If you had already applied for an upgrade before this date, your application will still be processed under the old rules. Similarly, firms previously registered or upgraded based on net worth will need to fulfill the criteria in Tables A, B, C, and D of the PEC Construction and Operation of Engineering Works Byelaws-1987 when they apply for renewal.

Please note that these are the most recent regulations, and you should always consult the official PEC guidelines for the latest information.

Upgrading with an Engineer Partner

PEC wants to see more engineers become entrepreneurs! That’s why they offer incentives for engineer-owned firms, allowing them to qualify for higher PEC categories without the usual experience requirements. These firms are easily identified by the “/E” in their PEC license number.

What is an engineer-owned firm?

An engineer-owned firm is a PEC-registered constructor or operator company where the engineer is either the sole proprietor or a partner with at least a 20% share. This company can be a Limited Liabilities Partnership (LLP), a Private Limited Company (Pvt Ltd), or a Form-C partnership. PEC offers special incentives to encourage engineer-owned firms.

Here’s what you need to know about engineer-owned firms:

• License Number: The PEC license number of an engineer-owned firm will include “/E”.
• Eligibility: For direct registration or upgrade to C-3/O-3, the engineer(s) must own at least 51% of the firm’s shares.
• Experience Requirements:
  • C-5/O-5: No experience required.
  • C-4/O-4: Each engineer needs at least 5 years of experience.
  • C-3/O-3: Each engineer needs at least 10 years of experience.
• Registration Fee: Only the fee for the respective category is required.
• Key Position: The engineer must hold a key position (Chairman, CEO, Managing Director, or Partner).
• SECP Registration: For new registrations in C-3/O-3, you’ll need proof of registration with the Securities and Exchange Commission of Pakistan (SECP).
• PCPs and Multiple Firms: If an engineer owns multiple firms and is also employed elsewhere, their PCPs (Professional Competency Points) will count towards the employing firm.

Note that engineer-owned firms are exempt from the usual PCP requirements up to C-3/O-3. The ownership of these firms cannot be transferred except to legal heirs or another engineer with the same experience level.

For those looking to register in the C-6/O-6 category, you’ll still need to pay the requisite fee (Rs. 15,000), complete your PCPs, and have an NTN (National Tax Number) in the name of the owner/sole proprietor/firm.

The following table shows the Engineers Qualifying Criteria for Higher PEC Categories:

Category	Engineer Experience	Minimum Shares Required
C-5/O-5	Not required	51%
C-4/O-4	5+ years	51%
C-3/O-3	10+ years	51%

Why Register as an Engineer-Owned Firm with PEC?

The Pakistan Engineering Council (PEC) is keen on promoting engineers as business owners, which is why they offer several advantages to engineer-owned firms:

Higher Categories Without Work Orders

You can register your new firm in higher PEC categories right away, even without prior work experience.

One-Time Registration Fee

You only pay the registration fee once, no matter which category you choose.

Relaxed PCP Requirements

You get a break on the Professional Competency Points (PCPs) usually needed for upgrades.

Upgrade Based on Engineer Experience

Your firm’s category can be upgraded based on your experience as an engineer.

These benefits make engineer-owned firms a great option for engineers looking to start their own businesses in the construction and engineering sectors.

PEC Penalties: What Happens if You Break the Rules?

PEC has strict rules in place to ensure quality and professionalism in the engineering sector. Here’s what could happen if your firm doesn’t follow them:

Working without a Proper PEC License

If your firm operates without the right license, an expired license, or beyond its permitted scope, you could face a hefty fine – three times the fee for the category you should have applied for.

Submitting False Information

Providing false information to PEC, such as incorrect engineer affidavits, fake licenses, or forged work orders, can result in your firm being suspended or even deregistered. In serious cases, PEC might file a First Information Report (FIR) against the owner/firm.

Remember, the Central Enrolment Committee of PEC can also impose penalties on a case-by-case basis for other types of misconduct. It’s always best to follow the PEC Act and Byelaws to avoid any trouble.

Required Documents for Upgrading Your PEC License

To upgrade your PEC license, gather the following documents:

• Original PEC License
• Paid PEC Challan Form
• Engineer Documents
• Bank Statement
• Work Orders (if applicable)

Original PEC License

Bring the original license in your current category. If it’s lost, provide an FIR, newspaper ad, and an affidavit from the firm’s owner.

Paid PEC Challan Form

Submit the original, paid challan form.

Engineer Documents

If upgrading based on an engineer’s qualifications, submit the engineer’s documents and biometric verification slip.

Bank Statement

Include a bank statement (verified by a Chartered Accountant) showing the required closing balance.

Work Orders (if applicable)

If upgrading is based on completed work, submit copies of all work orders with stamped performance certificates.

Getting Your PEC Firm Upgradation Form

You can easily find the PEC upgradation form online. Simply head over to the PEC website and look for the downloads section or simply click here

Upgrading Your PEC License in Pakistan

Your construction company can upgrade its PEC license at any time during the year. While the process might seem a bit tricky and time-consuming, don’t worry! You have three options for upgrading to a higher category:

1. Engineer Partnership: Collaborate with an engineer as a partner in your firm.
2. Financial Soundness: Demonstrate that your company has a strong financial foundation (Note: This option is no longer available for new upgrades as of February 2022).
3. Work Orders: Show proof of successful completion of work orders.

We’ll walk you through each of these methods, so you can choose the best path for your company’s growth.

How Much Does It Cost to Upgrade Your PEC License?

The fee for upgrading your PEC license is the same as the annual fee for the category you want to reach. But, if you’re jumping more than two categories, be prepared to pay three times the fee for your target category.

Here’s a quick look at the upgrade fees from C6 to other categories:

• C6 to C5: Rs. 30,000
• C6 to C4: Rs. 45,000
• C6 to C3: Rs. 75,000
• C6 to C2: Rs. 125,000
• C6 to C1: Rs. 150,000
• C6 to CB: Rs. 250,000
• C6 to CA: Rs. 400,000

From C6 to	Upgrade Fee (Rs.)
C5	30,000
C4	45,000
C3	75,000
C2	125,000
C1	150,000
CB	250,000
CA	400,000

Upgrading Your Construction Company’s PEC License: The Process

Absolutely! Your construction company can definitely apply for a PEC license upgrade. If you have the right civil engineers on board, your company will be upgraded under the relevant civil engineering codes.

Registering Your Construction Company with PEC: What You Need

You can register your construction company with the Securities and Exchange Commission of Pakistan (SECP) as either a Private Limited Company or a sole proprietorship. However, to apply for a PEC license in C3 or above, your company must be SECP-registered.

Here’s a checklist of what you’ll need to register your construction company with PEC:

• NTN
• Company
• SECP Documents (if applicable)
• Bank Account Maintenance Certificate
• Paid PEC Challan
• Qualified Engineers

The following is the elaborative description of what we need:

• NTN: A National Tax Number (NTN) under the same business name.
• Company Bank Account: A dedicated bank account for your firm.
• SECP Documents (if applicable): Attested copies of your SECP registration documents if you are a Private Limited or Single Member Company.
• Bank Account Maintenance Certificate: An original certificate from your bank confirming your account’s active status.
• Paid PEC Challan: Proof of payment of the PEC fee for your desired category. (You can find fee details on the PEC website.)
• Qualified Engineers: Hire the required number of engineers for your desired PEC category.

Upgrading Your PEC License One Step Higher

If your PEC-registered firm wants to move up one category, you only need to pay the single fee for the desired category.

1. From C6 to C5 Upgradation

Let’s focus on upgrading from C6 to C5, which is a common goal for many firms.

Here’s what you’ll need to upgrade from C6 to C5:

a) Work Order Route

• Complete work orders worth at least Rs. 17.5 million.
• Provide work completion certificates along with performance certificates signed and stamped by both the employer and your firm. PEC will verify these documents.

b) Financial Strength Route (No longer available for new upgrades)

• Maintain a closing balance of Rs. 30 lakhs in your firm’s bank account.
• If you’re a Pvt Ltd company, submit an audited financial report showing a net worth of Rs. 3 million or more. PEC will verify your bank balance and audit report.

c) Engineer Partner Route

• Add a registered engineer with a valid PEC card as a partner in your firm.
• The engineer must have at least 20% shareholding, documented through SECP registration or a Form-C partnership.

Remember, this is just a one-step upgrade. If you’re aiming for an even higher category, we’ll guide you through the requirements for those as well.

2. From C5 to C4 Upgradation

If your firm is currently in the C5 category with a project limit of Rs. 6.5 crore, you can upgrade to C4 by fulfilling one of the following conditions:

a) Financial Strength

Maintain a closing balance of over Rs. 60 lakhs (Rs. 6 million) in your company’s bank account. You’ll also need a valid audit report from a chartered accountant firm.

b) Work Experience

Complete government, semi-government, or private projects worth more than Rs. 4.55 crore. Make sure your work orders can be verified by the employers.

c) Hire an Experienced Engineer

Bring on board a PEC-registered engineer with over 5 years of experience after their engineering degree.

3. From C4 to C3 Upgradation

If your firm is currently registered in C4, you can aim higher and upgrade to C3. Here’s what you’ll need to do:

Meet any one of the following conditions:

a) Financial Strength

Show a closing balance of Rs. 30 million (3 crore) or more in your firm’s bank account. If you’re a Private Limited company, you’ll need to prove a financial worth of at least Rs. 30 million.

b) Work Experience

Demonstrate that your firm has completed work orders worth more than Rs. 14 million in the past 3 years.

c) Engineer Partnership

Bring in a partner who is a qualified engineer with over 10 years of experience.

4. From C2 to C1 Upgradation

If your firm is registered under PEC’s C2 category, you can aim for the prestigious C1 category. To make the jump, you’ll need to fulfill one of the following conditions:

a) Financial Muscle

Show a net worth or closing balance of Rs. 80 million or more. Make sure your audit report is verified by a QCR-rated Chartered Accountant firm.

b) Experienced Engineer Partners

Partner with two professional engineers, each with over 20 years of experience under their belts.

c) Proven Work Experience

Demonstrate that your firm has successfully completed projects worth at least Rs. 700 million in the last 3 years.

5. From C1 to CB Upgradation

For firms aspiring to upgrade from C1 to CB, the requirements are as follows:

• Financial Capacity: Demonstrate a net worth exceeding Rs. 120 million, verified by a QCR-rated Chartered Accountant.
• Seasoned Professionals: Partner with three professional engineers, each with more than 25 years of experience.
• Extensive Project Portfolio: Prove your firm’s capabilities by showcasing a minimum of Rs. 1 billion worth of successfully completed projects in the last three years.

6. From CB to CA Upgradation

The ultimate PEC license upgrade, from CB to CA, is achievable if your firm meets these stringent conditions:

• Exceptional Financial Strength: Possess a net worth exceeding Rs. 200 million, verified by a QCR-rated Chartered Accountant.
• Highly Experienced Team: Collaborate with four professional engineers, each possessing over 30 years of experience.
• Impressive Project History: Showcase a remarkable portfolio of projects valued at Rs. 1.5 billion or more, completed within the last three years.

Upgrading Your PEC License Two Categories at Once

Yes, you can jump two PEC categories in one go! This is possible through either an Engineer Partnership or by demonstrating your company’s Financial Soundness. Let’s delve into the specifics for each category so you can understand the possibilities for your firm.

1. C6 to C4 Upgradation

If your government contracting firm is registered in the C6 category (the starting point for PEC licenses), you can make a significant jump to the C4 category. Here’s how:

Choose one of the following upgrade paths:

• Work Orders: Complete projects worth Rs. 140 million.
• Engineer Partner: Bring on board an engineer with at least 5 years of professional experience as a partner in your firm.
• Financial Strength: Demonstrate that your company has a strong financial standing or net worth (Note: This option is no longer available for new upgrades as of February 2022).

2. C5 to C3 Upgradation

You can apply to upgrade your PEC license from C5 to C3 at any time. Keep in mind that there’s a big difference in project limits between these two categories: C5 allows for projects up to Rs. 65 million, while C3 opens up opportunities for projects worth up to Rs. 500 million. Naturally, upgrading to C3 comes with a cost, so be prepared for the associated fees.

Here’s what you’ll need for a C5 to C3 upgrade:

Choose one of the following paths:

• Work Orders: Complete work orders that total at least 70% of the project limit for C3, which is Rs. 350 million.
• Engineer Partner: Have an engineer with over 10 years of professional experience join your firm as a partner.
• Financial Strength: Demonstrate your company’s financial stability with a strong closing balance or net worth. (Note: This option is no longer available for new upgrades as of February 2022).

3. C4 to C2 Upgradation

Ready to jump from C4 to C2? This upgrade will significantly expand your firm’s project capabilities, as the C2 category allows for projects worth up to Rs. 2 billion, compared to C4’s limit of Rs. 150 million.

Here’s how you can achieve this upgrade:

• Financial Strength: Prove your financial standing with a closing balance of Rs. 50 million or more. If you’re a Private Limited company, you’ll need a net worth of Rs. 50 million, verified by an audit report from a QCR-rated Chartered Accountant firm.
• Work Experience: Demonstrate your firm’s track record by completing projects worth a minimum of Rs. 350 million in the last 3 years.
• Engineer Partners: Collaborate with two experienced engineers. Each engineer must have at least 15 years of professional experience and become a partner in your firm.

4. C3 to C1 Upgradation

Upgrading from C3 to C1 is a significant step towards taking on larger and more complex projects, as the C1 category has no project limit. This opens doors to major infrastructure projects and government contracts.

Here’s what you need to do:

• Financial Strength: Demonstrate your financial capacity with a closing balance of Rs. 80 million or more. For Private Limited companies, the net worth should be at least Rs. 80 million, verified by an audit report from a QCR-rated Chartered Accountant firm.
• Experienced Engineer Partners: Partner with two professional engineers, each with at least 20 years of experience.
• Proven Work Experience: Show that your firm has successfully completed projects worth a minimum of Rs. 700 million in the last 3 years.

5. C1 to CA Upgradation

The CA category is the pinnacle of PEC licenses, representing the highest level of expertise and capability in the construction industry. While the exact requirements can vary, here’s a general idea of what you’ll need:

• Exceptional Financial Strength: You’ll need to demonstrate a very high level of financial stability and net worth, often exceeding hundreds of millions of rupees.
• Extensive Work Experience: Your firm must have a proven track record of completing major projects, often worth billions of rupees, in various sectors.
• Top-Tier Engineers: You’ll need to have a team of highly experienced and qualified engineers with diverse expertise.
• Additional Requirements: PEC may have additional requirements specific to the CA category, such as showcasing exceptional project management capabilities and adhering to the highest quality standards.

Upgrading to the CA category is a challenging but rewarding endeavor, solidifying your firm’s position as a leader in the Pakistani construction industry.

PEC Firm License Upgradation: Jumping Three Steps Up

Ready to take a giant leap in your firm’s PEC category? Upgrading three steps at once can be a game-changer, opening doors to larger, more prestigious projects. Let’s explore the requirements for these ambitious upgrades:

1. C6 to C3 Upgradation

To make this significant jump, your firm needs to meet one of the following criteria:

• Work Orders: Successfully complete work orders totaling at least Rs. 350 million, which is 70% of the C3 category’s project limit of Rs. 500 million.
• Engineer Partner: Bring in an experienced engineer with more than 10 years of professional experience as a partner in your firm.
• Financial Strength (No longer available for new upgrades): Demonstrate your company’s financial capabilities with a robust closing balance or net worth.

2. C5 to C2 Upgradation

If you’re aiming for the C2 category (with a project limit of Rs. 2 billion), you’ll need to fulfill one of these conditions:

• Financial Strength: Prove your financial prowess with a closing balance of Rs. 50 million or more. If you’re a Private Limited company, your net worth should be at least Rs. 50 million, verified by a QCR-rated Chartered Accountant firm.
• Work Experience: Showcase your firm’s capabilities by completing projects totaling at least Rs. 1.4 billion (70% of the C2 project limit) in the last 3 years.
• Engineer Partners: Collaborate with two seasoned engineers, each with over 15 years of experience, as partners in your firm.

3. C4 to C1 Upgradation

The C1 category, with its unlimited project limit, is a major milestone for any construction firm. To reach this level, you’ll need to meet one of these requirements:

• Financial Strength: Display your company’s financial muscle with a closing balance of Rs. 80 million or more. For Private Limited companies, the net worth should also be Rs. 80 million or more, verified by a QCR-rated Chartered Accountant firm.
• Experienced Engineer Partners: Partner with two professional engineers, each boasting at least 20 years of experience.
• Proven Work Experience: Demonstrate your firm’s expertise by completing projects worth at least Rs. 700 million in the last 3 years.

4. C3 to CB Upgradation

The CB category is another significant step up, allowing for projects with a substantial value. To upgrade from C3 to CB, you’ll need to fulfill specific requirements, including:

• Substantial Financial Strength: Your firm will need to demonstrate a significantly higher financial capacity compared to the C3 category. This usually involves a higher closing balance or net worth, often in the hundreds of millions of rupees.
• Extensive Work Experience: Showcase your firm’s ability to handle large-scale projects by proving that you have successfully completed projects of substantial value within a specified timeframe.
• Specialized Expertise: You may need to demonstrate specialized skills or experience in specific areas, such as complex infrastructure projects or particular construction techniques.

5. C2 to CA Upgradation

Reaching the CA category is the ultimate achievement for a PEC-registered firm, signifying unparalleled expertise and capability in the construction industry. While the exact requirements can vary, they typically involve:

1. Exceptional Financial Strength: A very high level of financial stability and net worth, often reaching billions of rupees.
2. Extensive Work Experience in Large-Scale Projects: A proven track record of completing major projects across various sectors, often worth billions of rupees.
3. Highly Experienced and Specialized Engineers: A team of top-tier engineers with diverse expertise and extensive experience.
4. Additional Requirements: PEC may have further requirements for the CA category, such as demonstrating outstanding project management skills and adhering to the highest quality and safety standards.

These three-step upgrades are challenging, but they offer tremendous opportunities for your firm to grow and take on prestigious projects. If you have the ambition and the resources, don’t hesitate to aim high!

Upgrading Your PEC License Online: What You Need to Know

If your firm is in category C2 or higher, you’re in luck! You can apply for a PEC license upgrade online. However, for firms in categories C6 to C3, you’ll need to submit your PEC Upgradation forms manually at a PEC Facilitation Center.

To register on the PEC Firm Registration Portal, you’ll need your CNIC number and other basic information.

PEC Challan Form for Upgradation

Before you start your application, don’t forget to grab a PEC Challan form from any MCB or HBL Melody branch. The same challan form is used for new registrations, renewals, and license upgrades.

Upgrading Your License: Performance-Based Criteria

Any company, regardless of its current PEC category, can upgrade to a higher category if they meet performance-based criteria. Here’s what you need to know:

Executed/In-Hand Projects

• The work must have been awarded or executed within the last three years from the date you apply online.
• At least 60% of the work must be completed.
• For a one-step upgrade, the total value of these projects should be at least 70% of the current category limit.
• For upgrades of more than one step, the total value should be at least 70% of the limit of the category one level below your desired category.

Required Documents

• Work Order(s) of the project(s).
• Satisfactory Performance Certificates showing at least 60% completion for each project, signed and stamped by the relevant department and your firm’s owner.

Additional Notes

• Work orders used for one upgrade cannot be used again for future upgrades.
• Firms applying for C-3/O-3 or higher categories are exempt from SECP registration.

Engineer-Owned/Shared Firms

• These firms can upgrade to C-3/O-3 based on the engineer’s experience (see guidelines).
• For upgrades beyond C-3/O-3, they are treated like non-engineer-owned firms.

Employment of Engineers and PCPs

• Engineer-owned/shared firms have different requirements for employing engineers and PCPs compared to other firms (see guidelines).

Fees

• Engineer-owned/shared firms pay a single fee for the desired category up to C-3/O-3. Beyond that, they follow the same fee structure as non-engineer-owned firms.
• Non-engineer-owned firms have different fees depending on the number of categories they are upgrading.

Remember, these guidelines are subject to change, so always consult the official PEC resources for the latest information.