Investment Policy at a Glance

Pakistan's investment policy, generally recognized as one of the most favorable in the region, has long been characterized by steady moves to liberalization, deregulation, and privatization. The policy direction has been consistent, market-led, and business-friendly.

Main Features of the Investment Policy

All industries are open to investment without government permission (except four specified industries)

1. Arms & Ammunitions

2. High Explosives

3. Radio-Active Substances

4. Security Printing, Currency or Mint

Liberalization of service, infrastructure, social, and agriculture sectors for foreign investment (please track recent developments through the BOI's Web Site: http://www.pakboi.gov.pk)

Industrial, infrastructure, and social sectors open to 100 percent foreign ownership

Services has an upper limit of 60 percent foreign ownership (100 percent foreign equity allowed in services for the first five years)

Complete freedom of choice on location of activities

Full repatriation of capital, profits and dividends from all activities

Royalty, technical, and franchise fee payments allowed for all sectors

No requirement of minimum investment amount in the industrial and agricultural sector. Requirement of minimum investment of US$ 300,000 in infrastructure, social and services. sectors

Duty-free import of machinery for high technology, value-added, export industries, and corporate agriculture

Generous Fiscal Incentives

Tariff incentives

Duty exemption on machinery and equipment for It and Agriculture sector. customs duty at 5% only will be charged on import of plants. machinery and equipment (PME) for value added. export and hi-tech industries

Concessional import duty at 10% on PME for other priority industries, services, infrastructure, and social sector projects

Tax incentives

tax relief (first-year allowance) for PME costs

1. 90 % for value-added, export, and hi-tech industries

2. 75% for other priority industries, infrastructure, and corporate agriculture

3. 50% for services and social sector

The Role of the Board of Investment

The Board of Investment takes a proactive service-oriented approach to promoting investment opportunities in all sectors of the economy and to providing investment facilitation services to local, foreign and Overseas Pakistani investors.

The BOI is the focal point of contact between potential investors and all government agencies dealing with investment proposals, and providing infrastructure and other facilities.

To strengthen the leverage and effectiveness of the BOI, Ministers and Secretaries of Economic Ministries are actively associated with all activities of the BOI. The BOI maintains strong partnerships with Provincial Investment Committees across the nation to facilitate investors

Next: Incentives