Pakistan is strategically positioned to become Asia’s leading trade, energy, and transportation corridor. It also serves as a gateway to the energy-rich Central Asian states, the financially stable Gulf states, and the economically advanced Far Eastern tigers. Pakistan is a market brimming with opportunities simply because of its strategic advantage.
Government support is not the only factor that makes Pakistan an ideal place for investment but the availability of natural resources, plentifulness of both skilled and unskilled work force or human resource and the fact that Pakistan is the second largest market of South Asia are also very important to consider. Stephen P. Cohen, a well known political scientist, is often quoted as saying, “While history has been unkind with Pakistan, its geography has been its greatest benefit. It has resource rich area in the north-west, people rich in the north-east.”
As per a report on mineral sector development In Pakistan by Dr. Syed Akhtar Hussain Shah, Member Planning Commission of Pakistan, The country has the world’s second largest salt mines and fifth largest copper and gold reserves, and second largest coal deposits, as well as estimated billions of barrels of crude oil. There exist prospects for Investment on different aspects of mineral; estimation, exploration, production, washing, finishing, value addition, technological abridging and marketing. Several number of minerals may be focused for improvement in production and marketing; Dimension stones, copper and gold, chromite, iron ore, gypsum, gemstone, coal etc. Pakistan also has modest quantities of petroleum and large natural gas reserves.
No one can deny the importance of agriculture in development of national economies that depend upon agriculture. Agriculture contributes around 19 percent to the Gross Domestic Product of Pakistan. Around 44 percent of Pakistanis derive income from agriculture and livestock. This makes Pakistan a net food exporter. Agriculture has a vast potential as a lot of other sectors depend on agriculture for example textile and food manufacturing and packaging etc.
Along with the mining of natural resources and agriculture, a number of diverse sectors provide opportunities for investment for example cement industry, chemical and fertilizer industries, retail, real estate and housing, telecommunication, transportation including air, road, railways and maritime transportation, banking and finance, energy and services sectors. All these sectors have a lot of growth potential and investment in these sectors can result in outstanding rewards.
Youth under the age of 19 years make up 55% of population of Pakistan which is an indicator of long-term and sustainable financial growth. A large number of work force of Pakistan is skilled and contributes to growth of different economic sectors. The consumer market in Pakistan is expanding at a rapid pace, as seen by tele-density, which has now crossed 150 million.
In 2012, Pakistan passed the Special Economic Zones Act. The Special Economic Zones Law was drafted in response to global competitiveness problems in order to attract FDI. The law allows for the establishment of industrial clusters with liberal incentives, infrastructure, and investor facilitation services in order to boost productivity and lower the cost of doing business in order to promote economic development and poverty reduction.
Pakistan has made consistent attempts to improve the business environment in the country. As per doing business report by the world bank, around 300 measures have been undertaken to strengthen the country’s investment climate. As a result, Pakistan rose 39 places in the EODB ranking in the last two years to 108th place. Pakistan was named the top reformer in South Asia and the world’s sixth reformer. A company can now be registered with SECP& FBR in one day. Data is sent in real time to the Labour Department, PESSI, SESSI, and EOBI. The SECP portal is the only one that is used. 9 departments have been integrated from start to finish. Tax payments can now be made online. The number of payments has been cut from 47 to 34, and the time required to pay taxes has been significantly reduced. Small business tax rates were cut from 21 percent in fiscal year 2022 to 20 percent in fiscal year 2023.
Furthermore, the government understands the need of enhancing and extending Pakistan’s infrastructure. This promotes economic and social development. To improve economic climate in Pakistan, the government is aggressively working to eliminate infrastructure shortages. For example, through supporting Public Private Partnership (PPP) in the maintenance and funding of several infrastructure sectors such as Mass Urban Public Transportation, Transportation and Logistics, Industrial, and Social Projects. Pakistan is also a component of the China-Pakistan Economic Corridor (CPEC), a network of infrastructure projects aimed at improving regional connectivity.
A number of tax benefits and exemptions are available for foreign investors if they invest in Pakistan in several sectors and regions. For Any profit on debt and capital gains derived by any agency of foreign Government or any non-resident person approved by the Federal Government and any profit on debt by a foreign lender are exempt from tax under Income Tax Ordinance, 2001. Further, Pakistan has signed full scope bilateral tax treaties with 66 countries, including economic powers like China, Canada, United States, United Kingdom; 4 limited purpose bilateral agreements with India, Jordan, Kenya and Saudi Arabia and 5 multilateral tax treaties. There are a lot more tax concessions available for foreigners and non residents investors in Pakistan.
To conclude, it can be said that geo-strategic location, strong and skilled workforce, consistent policies of the governments and a number of measures by the government to facilitate investors make Pakistan an ideal place to invest your money.
If you require additional assistance, please feel free to reach Arif & Associates. Our team of highly skilled professionals will always be happy to help you whether you need help in registration of your business, planning and preparing your taxes or in management of your business.
