President Pervez Musharraf - About Pakistan: Top Reasons to Invest in Pakistan

Home: About Pakistan : Top Reasons to Invest in Pakistan

Top Reasons to Invest in Pakistan
Some of the top reasons why Pakistan is a good destination for your investment, as highlighted by the President in his speech at Expo 2005: “ 1. security of investment even during nationalization of 1970s no foreign or MNC was nationalized. 2. returns of capital upto 50% 3.stability and predictability of economy considering improved economic indicators. 4. availability of liquidity 5. expanding infrastructure 6. Cheap labour 7. Areas of investment are agriculture, textile, telecom and IT, energy sector, service industry, construction and building. New incentives and further liberalization measures include:
	Capital Markets The capital markets are being developed along modern lines with the assistance of Asian Development Bank. These reforms have resulted in the development of infrastructure in the stock exchanges of the country. The establishment of the Securities and Exchange Commission has improved the regulatory environment for stock exchanges, corporate bond market and the leasing sector. However, structural reforms in tax and tariffs (Central Board of Revenue-CBR), financial sector (State Bank of Pakistan-SBP), deregulation and privatization, investment policy reforms, improved governance, socio-political reforms and poverty reduction programs hold their significance in attracting investment in Pakistan.
	Liberal Investment Policy Pakistan is home to home over 600 foreign companies, which means Pakistan facilitates liberal investment policy.
	Reduction in Fiscal Deficit There has been stabilization in policies with regards to reduced fiscal deficit (from 6.6% to 4.5% of GDP), current account deficit eliminated and market-based exchange rate.
	Liberal Foreign Exchange Pakistan has a liberal foreign exchange regime with few restrictions on holding foreign exchange and bringing it in or out of the country. There are no limits on the inflow or outflow of funds for remittances of profits, debt service, capital, capital gains, returns on intellectual property, or payments for imported inputs.
	Investment Friendly Environment Strategic location as a regional hub includes principal gateway to the Central Asia Republics, strong and long-standing links with the Middle East and South Asian countries. Pakistan offers comprehensive duty-free facilities for investors.
	Foreign Private Loans The facility for contracting foreign private loans is available to all those foreign investors who make investment in the approved sectors.
	Domestic Market Foreign controlled manufacturing concerns are allowed to borrow on the domestic market according to their requirements.
	Human Resource Strong human resources including English speaking work force, cost-effective managers and technical workers.
	Infrastructural Development Well-established infrastructure and legal systems are deep rooted foundation to lure investment. It includes comprehensive road, rail, sea links; good quality telecommunications and IT services; modern company laws and long-standing corporate culture.
	Transparency There is a greater degree of transparency in procurement practices since the current government took office in October 1999. International tenders are properly advertised and there is no sole sourcing, as contract specifications are not made according to any company's requirements, as was done in the past. Sanctity of contracts, however, remains a major concern for companies.
	Loans and Paid up Capital Foreign controlled semi-manufacturing and non-manufacturing concerns can access loans equal to @ 75% & 50%, respectively, of their paid up capital including reserves.
	No restriction on Payment of Royalty There is no restriction on payment of royalty / technical fee etc., in the manufacturing sector, allowed non in non-manufacturing sectors. For non-manufacturing sector, the initial lump sum fee should not exceed US $ 100,000. The maximum rate will be 5% of net sales. Initial period for which such fees may be allowed should not exceed 5 year. Further information can be supplied by BOI.
	Foreign Equity Reducing minimum foreign equity from US$ 0.5 million to US$ 0.3 million.
	Import Duties Zero import duties on capital goods, plant and machinery and equipment not manufactured locally. Central Board of Revenue (CBR) can supply a list of locally manufactured good. In case of doubt the investor is invited to consult the Board of Investment (BOI).
	Tariffs on Agriculture Machinery The import tariff on agriculture machinery (not manufactured locally) for registered corporate agricultural projects will be zero-rated.
	Import of Plant and Machinery The investors who invest in the newly opened sectors can import plant, machinery & equipment (not manufactured locally) at discounted rate of customs duty which is 10% and also avail first year allowance @ of 50% of the cost of plant, machinery & equipment.
	Import Duties on Raw Material Zero import duties on raw materials used in the production of exports.
	Expansion of Market Large and growing domestic market includes 140 million consumers with growing incomes and a growing middle-class moving to sophisticated consumption habits.
	National Industrial Zones A composite scheme of National Industrial Zones engulfing industrial estates, Free Industrial Zones, Free Trade Zones and Export-Oriented Units (EOU) and Estates for small and medium industries within areas of its boundary has been launched to promote exports. In addition, establishment of export oriented units will be allowed to be set up all over the country.
	Industrial Projects Foreign investors are allowed participation in industrial projects, on the basis of 100% foreign equity, without any permission from the Government.
	Manufacturing Sector The manufacturing sector was open to foreign investment. Now, the policy regime has been liberalized by opening up other economic sectors to FDI and by mobilizing domestic financial resources to encourage investment.
	Energy Sector Energy sector involves Hydel, thermal, coal, solar, wind and biogas.
	Mining Sector Mining sector includes coal, granite, marble, semi-precious gems, chromites, dolomite, gypsum, limestone, Sulphur and rock salt.
	Engineering Sector Engineering sector includes light and heavy whereas privatization sector attracts potentional investment in banking and finance, oil and gas and power, real estate, telecom and transport.
	Land and Natural Resources Abundant land and natural resources exists in Pakistan including extensive agricultural land, crop production; wheat, cotton, rice, fruit and vegetables; mineral reserves; coal, crude oil, natural gas, copper, iron ore, gypsum; and fisheries and livestock production.
	Tourism Tourism has been declared an industry and as such holds great promise for prospective investors interested in exploring the true potential of a land as rich and diverse in its culture as it is in its geographical distribution. From snowcapped mountains in the north, with vast fertile plains of the Punjab, rugged land of the south, deserts and a long seacoast, Pakistan has all the hall marks to become a major tourist attraction.
	IT sector The Government as the main facilitator, enabler, and promoter of the IT sector, has evolved an effective national IT Policy and Action Plan that clearly caters to the needs of nurturing the industry and is responsive to the dynamic forces of change that can effect its future growth. The Private Sector is being brought into the mainstream as the main driver for growth.
	Oil and Gas exploration Oil and gas is another sector in which investor can have offshore and onshore exploration. They can invest in refinement, pipelines and storage facility.
	Small and Medium Enterprises Small and Medium Enterprises (SME) includes value added textiles and leather, engineering, electronics, sports and surgical goods, furniture, gemstones and jewelry and chemicals.
	Full Repatriation Full repatriation of capital gains, dividends and profits.
	No Objection Certificate There is no requirement to obtain a No Objection Certificate (NOC) from the Provincial Governments for the establishment of projects.
	Remittances Remittance of royalty, technology and franchise fee allowed to projects in social, service, infrastructure, agriculture and international chains food franchise.
	Regulatory Reforms Regulatory reforms have led to the establishment of a legal framework for licensing and regulating private housing lenders. At present, five private housing companies are operating in a regulated environment and offering a variety of loan instruments. In order to mobilize funds, private housing companies may issue certificates of investment.