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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