Investment Regime

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  • Brief on Investment Regime

    Pakistan follows liberal investment regime and facilitation being its foremost cornerstones for investors’ confidence and conducive environment to attract local and foreign investment

    Board of Investment (BOI) is mandated to promote, encourage and facilitate both local and foreign investment. Thus BOI acts as interface between international and local investors, public and private sector. BOI works for enabling business environment through policy and strategic interventions.

    Till 1997, Pakistan pursued the investment policy favorable for the industrial and manufacturing sector. The first Investment Policy was framed by BOI in 1997 which opened all economic sectors including infrastructure, social, and services for foreign investment. Keeping in view the importance of investment for economic growth and fast economic globalization trends around the world, Investment Policy 2013 was formulated to further improve the investment climate in the country. Guiding principles of Investment Policy 2013 are given below:

    • Reducing the cost of doing business in Pakistan
      1
    • Reducing the processes of doing business
      2
    • Ease of doing business with creation of industrial clusters and Special Economic Zones
      3
    • Linkages of trade, industrial and monetary policies for greater convergence
      4

    Attractive Investment Package

    Policy Parameters Manufacturing Sector

    Non -Manufacturing Sectors

     

     

    Agriculture

    Infrastructure & Social

    Services including IT & Telecom Services

    Govt. Permission

    Not required except 4 specified industries *

    Not required except specific licenses from concerned agencies.

    Remittance of capital, profits, dividends, etc.

    Allowed

    Allowed

    Allowed

    Allowed

    Upper Limit of foreign equity allowed

    100%

    100%

    100%

    100%

    Customs duty on import of PME

    5%

    0%

    5%

    0-5%

    Tax relief (IDA, % of PME cost)

    25%

    25%

    25%

    25%

    Royalty & Technical Fee

    No restriction for payment of royalty & technical fee.

    Allowed as per guidelines - Initial lump-sum upto $100,000 - Max Rate 5% of net sales - Initial period 5 years

     

    * Specified Industries

    • Arms and ammunitions
    • High Explosives.
    • Radioactive substances
    • Security Printing, Currency and Mint.
    • No new unit for the manufacturing of alcohol, except, industrial alcohol ** Only for CAF (Corporate Agriculture Farming)

    PME = Plant, Machinery and Equipment

    IDA = Initial Depreciation Allowance

     

    Important Investment Policies and Acts