Pakistan’s investment potential
Pakistan has been recognized as a rewarding investment destination since it is termed as an excellent platform for launching new investments as well as for the growth of earlier successful investments, both for local and foreign investors. The convenience offered by Pakistan for investment has played a major role in its economic recovery. This is mainly attributed to the government’s commitment to ensure that the country offers most attractive features of ease of doing business to the entrepreneurs.
Pakistan today is a moderately growing economy at 3.5 to 4 percent, with annual exports worth $25 billion and an improving law and order situation. The inflation rate seems to be in check and the trade bodies and all dynamic financial institutions of the country are collaborating to explore new business opportunities which would go a long way in bringing about the much-needed turnaround in the economy. The country’s location in the heart of Asia provides a gateway for businesses looking to expand into the Middle Eastern and Central Asian markets.
Pakistan has the most liberal investment policy in the South Asia region. More so, the government has enacted an extensive set of investment incentives, including credit facilities, fiscal facilities and visa policy. Foreigncontrolled manufacturing companies exporting 50 percent or more of their production can now borrow working capital without any limit. Other foreign-controlled manufacturing companies, including those not exporting and selling in the domestic market, can borrow rupee loans equal to their equity without prior permission of the SBP whose permission is also not required for raising domestic credit to meet fixed investment requirement. • Reducing minimum foreign equity from US $0.5 million to US $0.3 million. • Remittance of royalty, technology and franchise fee allowed to projects in social, service, infrastructure, agriculture and international chains food franchise. • Zero import duties on capital goods, plant and machinery and equipment not manufactured locally. CBR can supply a list of locally manufactured goods. In case of doubt the investor is invited to consult the BOI. • Enhanced FYA from 50 percent to 75 percent of PME for infrastructure and agriculture projects. • The import tariff on agriculture machinery (not manufactured locally) for registered corporate agricultural projects will be zerorated. • The investors who invest in the newly opened sectors can import plant, machinery and equipment (not manufactured locally) at concessional rate of customs duty which is 10 percent and also avail first year allowance at 50 percent of the cost of plant, machinery and equipment. • Zero import duties on raw materials used in the production of exports.
Special aspects of investment in Pakistan
1. Abundant Land and Natural Resources • Extensive agricultural land • Crops - wheat, cotton, rice, fruit and vegetables • Mineral reserves (coal, crude oil, natural gas, copper, iron ore, gypsum, etc.) • Fisheries and livestock production
2. Strong Human Resources • English speaking work force • Cost-effective managers and technical workers
3. Large and Growing Domestic Market • 160 million consumers with growing incomes • A growing middle-class moving to
sophisticated consumption habits 4. Well-Established Infrastructure and Legal
Systems • Comprehensive road, rail and sea links • Good quality telecommunications and IT services • Modern company laws • Long-standing corporate culture
5. Strategic Location as a Regional Hub
• Principal gateway to the Central Asian Republics
• Strong and long-standing links with the Middle East and South Asia
• Comprehensive duty-free facilities for investors ◆