Special Investment Zones

An Export Processing Zone at Karachi has been set-up to attract foreign investment in export-oriented industries. Infrastructure facilities like water, electricity, gas, Tele-communication etc. are available in the zone. The Government has also given its approval to establish more export processing zones in the country.
 

Eligibility criteria  The eligibility criteria for setting-up units in the zone are:  All investment to be made in convertible foreign exchange. A foreigner / foreign company, non-resident Pakistani, and resident Pakistani can also invest in the zone.

Tax and fiscal incentives

The incentives available for investment on the zone are as follows:

• Exemption from custom duty and sales tax on all goods imported into and exported from the zone.
• Exemption from custom duty and sales tax on machinery, plant and equipment imported in the zone.
• Repayment of custom duty and sale tax on raw materials used in manufacture of goods admitted into the zone.
• Exemption from foreign exchange controls and insurance regulations, as applicable in Pakistan.
• Tax holiday for undertakings set-up in Karachi Export Processing Zone is available upto 30 June 1997 and for other export processing zones for a period of five years if set-up before 30 June 1997.
• Purchase of textile quota without any restriction against encashment of foreign exchange.
• Regulation of Labor Laws through EPZ Control of Employment Orders.
• To further improve the functioning / profitability of Zone, the Government has taken the following decisions:
• Removal of restriction on import from the zone into the tariff area.
• Increase in the limit of investment by the resident Pakistanis to 100%, provided at least 60% of investment is made out of his own foreign exchange resources

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