Text of the Brochure: The democratically elected Government has a commitment to make country progress. Board of Investment is mandated to attract foreign and domestic investment and has been endeavouring to facilitate investors with one window operation. Investment Policy of 1997 initially brought Pakistan's economy into international economic integration by introducing various economic deregulatory measures.
The policy treats domestic and international investors equally and offers all sectors for economy open for investment. Services and retail has also been allowed for foreign companies. There are over 800 foreign companies operating in Pakistan and enjoying a handsome rate of return on their equity. Special economic Zone Bill will now encourage industrial clusterization, which will bring Pakistan on international radar offering liberal investment regime. The investment and incentives will stand fully protected to stay through this Law.
BoI being fully conscious of global economic pressures of recession, domestic difficulties of power outages, law and order difficulties is moving towards further liberalisation and would be presenting new policy backed by long term growth strategy to provide comfort to Investors.
Evolution
National Assembly approved the SEZ Bill 2012 on 13th July, 2012. The bill took more than three years for its processing as it involved large consultative process with the provinces and other stakeholders. The incentive package was approved in 2008 by the ECC but it remained under discussion. The Cabinet accorded approval in principle for initiation of legislation in 2010. The Council of Common Interests (CCI) also considered this bill due to introduction of 18th amendment. After hectic efforts, CCI approved the bill in August, 2011. The bill has further undergone the microscopic examination by the Standing Committee on Law, Justice, Human Rights & Parliamentary Affairs. The Upper House (Senate) approved this bill in January, 2012 and National Assembly accorded its approval on 13th July, 2012.
Why Special Economic Zone
The Law of SEZ has been made to meet the global challenges of competitiveness to attract FDI. The Law/bill will allow to create industrial cluster with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction. The Law further envisages to reduce processes through SEZ in Pakistan. The establishment of SEZs will attract both domestic as well as international investors. The SEZ would play a pivotal role in the economic development of Pakistan as has been witnessed in case of China, Malaysia, Thailand and other states.
Salient features of the SEZ bill 2012
-- It extends to the whole of Pakistan and override other laws (anything contrary);
-- All SEZ whether Public, Public-Private or Private-Private to be governed under this Act;
-- The Board of Approval (BoA) headed by the Prime Minister of Pakistan with the Minister for Finance as the Vice Chairman shall meet as frequently as required but not less than twice a year and decisions shall be taken by a majority of the total membership present and voting;
-- SEZs will have exemption from customs duties & taxes for all Capital Goods imported into Pakistan for the development, operations and maintenance of a SEZ;
-- Exemption from all taxes on income accruable in relation to the development and operations of the SEZ for a period of ten years, starting from the date of signing of the Development Agreement.
-- Zone Enterprises have exemption from custom duties etc. on imports of Capital Goods;
-- Exemption from taxes on income for a period of 10 years starting from the date the Development certifies that the Zone Enterprise has commenced commercial operations in the relevant SEZ;
There is no limit to the economic potential of Pakistan. The challenge is to create the enabling environment in which this can be realised. Special Economic zones bill is a step towards the economic stability in the country.