FACILITATING FOREIGN INVESTORS
Foreign direct investment (FDI) refers to long term participation by a country A into country B (in this case Pakistan) . It usually involves participation in management, joint-venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative).
Foreign direct investment (FDI) is a measure of foreign ownership of productive assets, such as factories, mines and land. Increasing foreign investment can be used as one measure of growing economic globalization.
WHO CAN BE A FOREIGN INVESTOR?
A foreign direct investor may be classified in any sector of the economy and could be any one of the following:
HOW CAN A FOREIGN INVESTOR INVEST HIS FUNDS?
The foreign direct investor may invest in by any of the following methods in Pakistan:
WHAT WOULD BE SOME OF THE BASIC REQUIREMENTS FOR COMPANIES CONSIDERING A FOREIGN INVESTMENT?
Depending on the industry sector and type of business, a foreign direct investment may be an attractive and viable option. With rapid globalization of many industries and vertical integration rapidly taking place on a global level, at a minimum a firm needs to keep abreast of global trends in their industry. From a competitive standpoint, it is important to be aware of whether a company’s competitors are expanding into a foreign market and how they are doing that. At the same time, it also becomes important to monitor how globalization is affecting domestic clients. Often, it becomes imperative to follow the expansion of key clients overseas if an active business relationship is to be maintained.
New market access is also another major reason to invest in a foreign country. At some stage, export of product or service reaches a critical mass of amount and cost where foreign production or location begins to be more cost effective. Any decision on investing is thus a combination of a number of key factors including:
WHAT ARE THE FOREIGN DIRECT INVESTMENT INCENTIVES IN PAKISTAN?
The simple answer is that making a direct foreign investment allows companies to accomplish several tasks:
Pakistan has a very liberal policy on repatriation for foreign direct investors, therefore, investing in Pakistan may give a foreign direct investors the following added advantages.
INVESTMENT POLICY OF GOVERNMENT OF PAKISTAN
For the purposes of foreign investment in Pakistan, the Investment Policy of Pakistan has formed two broad groupings i.e. manufacturing and non-manufacturing/ service sector. Salient features of the Pakistan Investment Policy relating to the manufacturing and services sectors are as follows:
NO GO AREAS (PROHIBITED AREAS)
Government of Pakistan prohibit the following areas for investment:
Various Corporate structures are available for setting up a place of business in Pakistan for which Aims Associates, Corporate and Legal Consultants can give you the optimum advice putting into prospective the current Pakistan Legislation and the individual person/companies position.
In terms of the Investment Policy of the Government of Pakistan, there are three (03) ways, whereby, a foreign company may have its presence in Pakistan.
HOW WILL MY FUNDS GET INTO PAKISTAN AND WHAT WILL BE THE EXIT STRATEGY?
State Bank of Pakistan (SBP) regulates remittances in and out of Pakistan under legislature. There is no restriction on inward remittances by State Bank of Pakistan (SBP) but any outward remittances whether be royalty, technical fee and dividend have to have a prior approval from SBP, which the authorising bank/agent would do on the company’s behalf. Similarly any contract for any such remittance needs prior approval of SBP. In case you require any assistance with the approval from State Bank of Pakistan do let Aims Associates know and we will happily complete all the legal paper work and technical formalities.
WILL A FOREIGN INVESTOR BE TREATED LESS FAVOURABLY ON INVESTMENT IN PAKISTAN?
Foreign Private Investment (Promotion and Protection) Act, 1976 and the Furtherance and Protection of Economic Reforms Act, 1992 provide legal cover for protection of foreign investors/investment in Pakistan.
Furthermore, since Pakistan has entered into Bilateral Agreements on Promotion and Protection of Investment with more than 46 countries. These Agreements provide the following:
DOES BILAL ASSOCIATES HAVE EXPERIENCE IN HANDLING FOREIGN CLIENTS?
Yes, we have successfully managed to assist vast number of foreign individuals to invest in Pakistan and form a place of business to that effect. Aims Associates can deal with various foreign direct investment projects in Pakistan.
WHY INVEST IN PAKISTAN?
Pakistan over the last few years has developed itself as a potential market for foreign investors with its liberal investment policy, cheap labour, tax incentives and good return on investments. Following table demonstrates the FDI in Pakistan over the last decade.