ISLAMABAD, July 14: The approval of Special Economic Zone Bill (SEZ) 2012 by the parliament would help attract foreign direct investment and encourage local investors by providing legal cover to their investments.
Board of Investment Chairman Saleem H. Mandviwala told a news conference here on Saturday that the new law would ensure consistency and transparency in economic policies beyond political divide and restore investor confidence.
Explaining the salient features of the Special Economic Zone Act 2012, Mandviwala said the law would guarantee that incentives once granted to an investor could not be withdrawn due to conflict of interests.
The BoI chief said that investors from a number of countries were eyeing enactment of law by the parliament to legally protect their investments. He said investors from China, Turkey and Japan will take full advantage of the creation of special economic zones.
BoI is already in negotiation with Japanese investors, he added.
The BoI will market the SEZ Bill among the countries whose investors are keen to make investments. Pakistan’s honorary investment counsellors in missions abroad will take measures to inform investors about the new measures. Similarly, the board will communicate with relevant departments at government-to-government level.
Following the adoption of SEZ Bill 2012, a Board of Approval headed by the prime minister, will be created. BoI has already taken up framing of operational rules which will be finalised in consultation with provincial governments. At the provincial level, SEZ authorities will also be established for the implementation of SEZ Act, Mr Mandviwalla said.
The BoI chairman explained that economic zones would be created on the basis of public-private partnership. Local investors equally qualify to create special economic zones, and in this connection, chambers of commerce will also be contacted.
SEZs will enjoy a 10-year exemption from custom duties and taxes for all capital goods imported into Pakistan for the development, operations and maintenance.
Exemption from all taxes on income accruable in relation to the development and operations of the SEZs will start from the date of signing of the development agreement.
In response to a question, Mr Mandviwalla said that the law would allow only capital investment in special economic zones, and the licence of an investor would be cancelled if it involves in real estate and housing colonies businesses.
He said that changes in the auto industry policy should be brought in to include newcomers in the field of motorcycle industry. Several car manufacturing countries, motorcycle and tractor manufacturers have desired to set up plants in Pakistan.
He agreed with a questioner about the secured environment for the promotion of investment in the country, and said that provincial governments should take measures in this regard.
Though it took over three years for the SEZ bill to take the legal shape, BoI now hopes that the flow of foreign direct investment to the country would get a boost. Pakistan has now joined the ranks of several countries including China and India in the region where special economic zones have been set up.