Facilitating Doing Business and

Special Economic Zones in Pakistan

Pakistan Investment Conference 4-5 November, 2015

1: Mandate of Board of Investment

3: Strategic Vision

4: Major Initiative to Provide Ease of Doing Business

2: Guiding Principles of Investment Policy 2013

6: Encouraging Investment Trends

5: Establishment of Special Economic Zones

MANDATE OF BOI

To promote, encourage and facilitate

local and foreign investment, and

matters connected therewith and

ancillary thereto

GUIDING PRINCIPLES OF INVESTMENT POLICY

Reducing the cost of doing business

Simplification of the processes & procedures of doing business

Removing unnecessary regulations

Convergence of economic policies

The Policy provides a comprehensive framework for ease of doing business and improved business climate

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INVESTMENT POLICY

u

Ownership

Linkages

Link

ages

Profits & Taxes

• All sectors open to investments

• Up to 100% foreign ownership

• Same treatment for local and foreign investments

• Visa on arrival for 69 friendly countries

• Establishment of Branch & Liaison offices are allowed

• Establishment of Industrial Clusters (SEZs)

• Protection of FDI via acts of parliament (Acts 1976 & ‘92)

• Bilateral Investment Treaties

• Double Taxation treaties

• No restriction on remitting capital, profits & dividends

• 25% tax relief on initial depreciation on machinery

• Exemption on import of Plant, Machinery & Equipment

Linkages

Investment Policy

Protection

• Well developed Regulatory Framework facilitating the investors

STRATEGIC VISION

Policy reforms through Public-Private Dialogue

One Window Operations

Coordination amongst stake holders

Automation of processess

Development of Special Economic Zones (SEZs)

Resolve is to align strategic vision of BOI with the National Vision to make Pakistan an investment hub

MAJOR INITIATIVE TO PROVIDE EASE OF DOING BUSINESS

KEY REFORM AREAS

PROGRESS ACHIEVED After research, on provincial tax regime, BOI

requested provincial authorities to consider

abolishing, or merger of taxes having less than 1%

revenue contribution and to reduce the number of

agencies and installments

FBR has identified 39 processes for streamlining and

has launched integrated end-to-end IT solution

Land record in all provinces has been digitalized

Provincial Governments have developed On-line and

One Window System for issuance of Construction

Permits

SPECIAL ECONOMIC ZONES Provide ease of doing business

Create efficient and competitive industrial clusters

Creation of excellent infrastructure to meet the

global competitiveness

One window facility to reduce the overhead costs

Ensured availability of utilities and security at the

door step of the Zone

Provision of skilled and trained human resource

Boosting international competitiveness ranking

Mainstreaming of marginalized/backward areas10

MODES OF ENTRY

SEZs can be developed as:

Public sector

Private sector

Public-Private Partnership basis

SEZ Act provides for the establishment of

SEZ anywhere in the country with minimum

50 acres of land

Any Existing Zone can also apply to the SEZ

Authority in which they are located to become

eligible for SEZ 11

BOI-SECRETARIAT OF SEZS As Secretariat, BOI

Co-ordinate all activities pertaining to SEZs, developers and zone enterprises

Process zone application submitted by SEZ authorities for consideration of BOA

Recommend applications for additional benefits Review development agreements Facilitate developers and enterprises during the

whole business cycle

Fiscal Incentives

Corporate Income Tax Holiday of 10 years for Investors and 10 years for Developers of the Zone

Duty free import of capital goods for Developers and Zone Enterprises

General Incentives

Gas, electricity and other utilities will be provided at the zero-point of the Zones

Captive power generation permissible to Developers of the Zones

Security

INCENTIVES REGIMEINCENTIVES REGIME

APPROVED SEZs

1. Khairpur SEZ, 140 acres, Govt. of Sindh[Agro based Industry and date processing]

2. Bin Qasim SEZ, 930 acres, Pakistan Steel[Light Engineering, auto vendors, steel fabricating units chemical & food, pharmaceuticals, electrical & consumer goods and furniture & wood working]

3. Korangi Creek SEZ, 240 acres, Govt. of Sindh[Consumer goods, food & pharmaceuticals, garments, value added textile, light engineering, packaging & printing, warehouses / logistics]

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SEZSEZ

SEZ

Khairpur SEZ140 acreCost Rs 1.4 BnAgro Industry & Date Processing75% infrastructure developed

Khairpur SEZ140 acreCost Rs 1.4 BnAgro Industry & Date Processing75% infrastructure developed

Korangi Creek SEZ

240 acreCost Rs 3.8 Bn

Food & Pharmaceuticals,

Garment etcInfrastructure

being developed

Korangi Creek SEZ

240 acreCost Rs 3.8 Bn

Food & Pharmaceuticals,

Garment etcInfrastructure

being developed

Bin Qasim SEZ930 acre

Cost Rs 9.8 BnLight

Engineering, Auto Vendors etc.

Bin Qasim SEZ930 acre

Cost Rs 9.8 BnLight

Engineering, Auto Vendors etc.

APPROVED SEZs IN SINDH PROVINCE

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China-Pakistan Economic Corridor is a fusion of multiple corridors/ Projects

BOI sensitized Chinese investors with all information and data in materialization of their projects at each stage of their project cycle

33 potential sites alongside the corridor for SEZs in consultation with provinces have been proposed

Establishment of these zones will boost economic activity, expedite industrialization and generate huge employment opportunities

Chinese Groups shown interest to invest more than US$ 15 billion in early harvest projects

BOI in coordination with Ministry of Ports & Shipping and GDA / GPA is assisting in establishment of SEZ at Gwadar

CHINA PAKISTAN ECONOMIC CORRIDOR

GWADARGATEWAY TO GLOBAL MARKET

Connectivity - Pakistan – China – Middle East – AfricaMobility - Cut 13,000 Km route from Middle East to ChinaActivity – Trade – Investment – OpportunitiesGwadar Port started operations for commercial export on May 11,2015BOI has setup a facilitation center at Gwadar

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STRAITS OF MALACCA

18 Source: SBP & Economic Survey 2014-15

ENCOURAGING INVESTMENT TRENDS (BILLION US$)

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