How does homeschooling work?

Home-schooled children take the same national/state/board exams that their school-schooled counterparts take, but they take them as private candidates.

If your child is going for higher education in the UK (or even US), they can do A-Levels or the IB Diploma.  For the US, AP exams.  For Pakistan, Federal Board exams, etc.

As for how it works, most parents do it on their own.  Others pool together with other families who also want to home-school their children, and then teach them is small groups.  Not many home-schoolers in this country, so the difficult part is finding others who are doing it as well to share the teaching, ideas, and resources, as well as for the kids to make friends and socialize.

There are various home-schooling curricula that are used around the world.  You can search for them, and order materials through dedicated websites or perhaps through amazon.