Pakistan Investment Environment -Salient Features of Investment policies

1. Pakistan
Investment
Environment
Salient Features of
Investment policies

2. Salient Features of Investment
policies - Pakistan
The land of
Opportunities
How secure is
investment ?
Incentives offered
Investment Policy
• Corporate
Structures
Salient Features of Investment policies
2

3. The land of Opportunities
Potential market for foreign investors with its liberal investment policy, cheap labor, tax
incentives and good return on investments
Geo-strategic Location
Trained Workforce
6th largest market with moderate Purchasing Power Parity
Business friendly and open Investment Policies
Solid Financial Markets
Salient Features of Investment policies
3

4. Foreign companies Security
How secure is investment?
 Foreign Private Investment (Promotion and Protection) Act, 1976
 Furtherance and Protection of Economic Reforms Act, 1992
provide legal cover for protection of foreign investors/investment
in Pakistan.
 Pakistan has entered into Bilateral Agreements on Promotion and
Protection of Investment with more than 46 countries. These
Agreements provide special advantages.
Salient Features of Investment policies
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5. Incentives offered
Liberal policies – Value added advantages for Foreign Direct Investment Incentives in Pakistan
 Full repatriation of capital gains, dividends and profits
 Remittance Allowed - royalty, technology and franchise fee.
 Max foreign share in Joint Venture vs Minimum share of the local
(Pakistani) partner 60:40 for the service sector.
 100% foreign equity can be owned for first 5 years.
 No question on source of investment/funds by The FBR (Federal
Board of Revenue).
 Foreign investors are allowed 100% equity basis investment in
industrial project.
 Pre Approved NOC from provincial governments.
Salient Features of Investment policies
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6. Incentives offered
Liberal policies – Value added advantages for Foreign Direct Investment Incentives in Pakistan
 Foreign investment on a repatriate-able basis is allowed in services,
infrastructure and social sectors
 The facility for contracting foreign private loans is available to all
those foreign investors who make investment in the approved
sectors.
 BOI's (Board of Investment) approval is not required for foreign
companies to open a bank account.
 Foreign controlled manufacturing concerns are allowed to borrow
from the domestic market
 Foreign controlled semi-manufacturing and non-manufacturing
concerns can access loans equal to @75% & 50%, respectively, of
their paid up capital including reserves.
Salient Features of Investment policies
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7. Investment Policy
Government of Pakistan
MANUFACTURING SECTOR
The entity must be a company incorporated
under the Companies Ordinance, 1984.
100% foreign equity is permissible on the
basis of repatriation of capital and profits
(dividend).
The amount of foreign equity investment
must not be less than US $ 0.3 million.
SERVICE SECTOR
The entity must be a company incorporated
under the Companies Ordinance, 1984.
The amount of foreign equity investment
must not be less than US $ 0.15 million.
100% foreign equity is permissible on the
basis of repatriation of capital and profits
(dividend).
Salient Features of Investment policies
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8. Corporate Structures
Foreign companies
In terms of the Investment Policy of the Government of Pakistan,
there are three (03) ways, whereby, a foreign company may have its
presence in Pakistan.
Liaison
Office
Branch
Office
Locally
incorporated
subsidiary
Salient Features of Investment policies
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9. No Go Areas - Foreign Investments
PROHIBITED AREAS
Arms and ammunition
High explosives
Radioactive substances
Security printing, currency and mint
Alcoholic beverages or liquor
Salient Features of Investment policies
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10. Pakistan
Investment Profile