The Registered Office and Resident Key Individual Rule

A licence under the Virtual Assets Act 2026 is not something a foreign company can hold from abroad while running Pakistan operations remotely. Section 20(6) builds a permanent local footprint into the licence itself, and it does so with two separate requirements — a registered office, and a resident individual with genuine authority — rather than one general “presence in Pakistan” test.

What does section 20(6) actually require?

The provision reads: “Every Licensee shall maintain a registered office in Pakistan and ensure that at least one Key Individual ordinarily resident in Pakistan is vested with operational and decision-making authority subject to conditions prescribed.”

Two obligations sit inside that single sentence, and they are not the same thing:

1. A registered office in Pakistan. A physical, maintained address within the country.
2. At least one ordinarily-resident Key Individual with operational and decision-making authority. A named person, living in Pakistan, who actually runs part of the business — not merely a local address on a company register.

Both obligations apply to “Every Licensee,” meaning this is a continuing duty that runs for as long as the licence is held, not a one-off condition checked only when the licence is first granted.

Who counts as a “Key Individual” for this purpose?

The Act defines Key Individual broadly in section 3(1)(xv), covering any natural person who occupies one of ten listed roles in relation to a licensee, on a full-time, part-time, acting or outsourced basis: director, Managing Director, chief financial officer, chief operating officer, head of internal audit, head of compliance, money-laundering reporting officer (MLRO) or equivalent, head of risk management, head of information-security and cyber-security, or any other position PVARA declares to be a Key Individual by written notice.

Section 20(6) does not say the resident individual has to be a director specifically. It requires that at least one person from this wider list of Key Individual roles be ordinarily resident in Pakistan — which means a resident chief operating officer, resident MLRO, or resident head of compliance could satisfy the rule just as a resident director could, provided that person genuinely holds “operational and decision-making authority.” Reading this as a narrow resident-director requirement understates what the Act actually asks for, and risks satisfying the letter of a director appointment while missing the substance the Act is testing for.

Why does the phrase “operational and decision-making authority” matter?

Because it rules out a nominee. A licensee cannot satisfy section 20(6) by appointing a Pakistan-resident Key Individual on paper while all real decisions are made by staff or directors abroad. The Act requires that authority to be genuinely “vested” in the resident individual — meaning that person needs actual power to operate the business and make decisions, not just a title and a local address.

In practice, our reading is that this connects section 20(6) to the fit and proper standard in section 20(1) and (2), which applies to Controllers, Sponsors, the chief executive officer, directors and all Key Individuals. A resident Key Individual holding genuine decision-making authority is also a person whose fitness and propriety PVARA has assessed, closing the gap that a purely nominal local appointment would otherwise leave open.

What does “subject to conditions prescribed” leave open?

The Act does not specify, within section 20(6) itself, what those conditions are. This is a case where the provision states the principle — a registered office plus a resident Key Individual with real authority — and leaves the operational detail, such as minimum time commitments, qualifying seniority, or documentation of that authority, to Regulations PVARA has not yet published in the source material reviewed for this analysis. Where guidance on these conditions has not been issued, that gap should be treated as open rather than assumed, and confirmed directly with PVARA before a foreign group finalises its Pakistan governance structure.

How does this connect to a licence’s fit and proper review?

Section 20 groups several related obligations together, and section 20(6) sits alongside them rather than standing alone:

• Section 20(1) requires PVARA to assess whether every Controller, Sponsor, chief executive officer and director is fit and proper.
• Section 20(2) extends fit and proper standards to all Key Individuals, with the applicant or licensee responsible for assessing and maintaining that fitness on an ongoing basis.
• Section 20(3) allows PVARA to refuse, suspend or revoke a licence where a Controller, Sponsor or Key Individual fails to meet those standards.
• Section 20(4) makes fit and proper standards continuing, requiring notification of anything that could affect a person’s fitness.
• Section 20(6) then adds the residency and decision-making authority requirement on top of that fitness standard.

The Act does not state a separate penalty specific to a breach of section 20(6) alone. What it does provide, in section 23(1)(a), is a general ground for PVARA to vary, suspend or revoke a licence where “the Licensee has contravened any provisions of this Act” — a category broad enough to cover a licensee that has, in substance, no registered office in Pakistan or no resident Key Individual genuinely exercising decision-making authority, though the Act does not spell that connection out expressly in relation to section 20(6) itself.

Does this rule apply only to foreign-owned VASPs?

No. Section 20(6) applies to “Every Licensee,” without any carve-out for companies that are wholly owned and managed by Pakistani nationals. The plain reading is that a domestic company is bound by the same two-part test as a foreign group entering the market — a registered office in Pakistan, and at least one Key Individual ordinarily resident in Pakistan holding genuine operational and decision-making authority.

In practice, a domestic applicant is more likely to satisfy this rule as a natural consequence of how it is already structured, since its founders, directors and senior staff are typically resident in Pakistan from the outset. The requirement bites hardest on a foreign group that would otherwise prefer to run Pakistan operations through a locally incorporated shell staffed and directed from abroad — precisely the structure section 20(6) is drafted to rule out, whether or not that was the primary purpose behind the wording.

What should a foreign VASP take from this?

A foreign virtual asset service provider planning market entry into Pakistan needs to plan for a real local operating presence, not a registered agent address and a nominal appointment. The registered office and the resident Key Individual are two separate boxes to tick, and the second one is tested on substance — genuine operational and decision-making authority — rather than form. Because the Act extends the eligible roles across the full Key Individual list rather than confining it to directors, a foreign group has some flexibility in who fills that role, but no flexibility on whether that person’s authority is real. Given that fit and proper assessment for Controllers and Key Individuals begins as early as the No-Objection Certificate stage, the choice of who will be the resident Key Individual is a decision worth making before a licence application is filed, not after.

Related reading

• PVARA Exchange License: Capital, Rules & Obligations 2026
• PVARA Transfer & Settlement License: Crypto Payments 2026

About this analysis

This analysis was prepared by the CoinConnect research desk from the Virtual Assets Act 2026 as passed by the National Assembly — principally section 20(6), with cross-references to sections 3(1)(xv), 20(1) to (4) and 23 — read as published. Where practice is not yet settled or guidance has not been issued, that is stated in the text above.

Regulatory positions change and specific requirements should be verified against the current position published by the relevant authority before you act on them. This is information and analysis, not legal advice, and it does not create an advisory relationship. Take professional advice on your own circumstances.