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FAQs

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:

  • An individual;
  • A group of related individuals;
  • An incorporated or unincorporated entity;
  • A public company or private company;
  • A group of related enterprises;
  • A government body;
  • An estate (law), trust or other societal organisation; or
  • Any combination of the above.

How can a foreign investor invest his funds?

The foreign direct investor may invest in by any of the following methods in Pakistan

  • by incorporating a wholly owned subsidiary or company, by acquiring shares in an associated enterprise
  • through a merger or an acquisition of an unrelated enterprise
  • participating in an equity joint venture with another investor or enterprise

Making a direct foreign investment allows companies to accomplish several tasks:

Making a direct foreign investment allows companies to accomplish several tasks:

  • Avoiding foreign government pressure for local production.
  • Circumventing trade barriers, hidden and otherwise.
  • Making the move from domestic export sales to a locally-based national sales office.
  • Capability to increase total production capacity.
  • Opportunities for co-production, joint ventures with local partners, joint marketing arrangements, licensing, etc.;
  • Low corporate tax and income tax rates in Pakistan
  • Tax Concessions/Exemptions To Particular Businesses
  • Special Economic Zones developed by the government of Pakistan
  • Cheap Labour in Pakistan
  • Job training & employment subsidies
  • Infrastructure subsidies
  • Research and Development support
  • Early Entry Advantage.

What is Pakistan’s policy on repatriation for direct investors? What are the added advantages for the foreign investors due to this policy?

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.

  • Remittance of royalty, technology and franchise fee is allowed to projects in social, service, infrastructure, agriculture and international chains food franchise.
  • Minimum share of the local (Pakistani) partner in a joint venture will be 60:40 for the service sector. However, 100% foreign equity can be owned for first 5 years.
  • The FBR (Federal Board of Revenue) will not question as to the source of investment; however, the FBR will only want to know whether the investor has paid requisite Income Tax on that specific investment. The FBR will not inquire into the source of the funds.
  • Foreign investors are allowed to invest in industrial project on 100% equity basis without any permission from the government.
  • There is no requirement for a No Objection Certificate from the Provincial Government.
  • In addition to manufacturing sector foreign investment on a repatriate-able basis is allowed in services, infrastructure and social sectors.
  • Full repatriation of capital gains, dividends and profits.
  • The facility for contracting foreign private loans is available to all those foreign investors who make investment in the approved sectors.
  • Foreign controlled manufacturing concerns are allowed to borrow on the domestic market according to their requirements.
  • Foreign controlled semi-manufacturing and non-manufacturing concerns can access loans equal to @ 75% & 50%, respectively, of their paid up capital including reserves.
  • BOI’s (Board of Investment) approval is not required for foreign companies to open a bank account.

How will the investor’s 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 Masood and Masood 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:

  • The Contracting Parties shall encourage investments in their respective territories by investors of the other Contracting Parties
  • Non-discrimination between local investors and foreign investors
  • Equal/non-discriminatory treatment in case of compensation for losses owing to war, other armed conflicts or a state of national emergency
  • Free transfer of investments, and income deriving therefrom including profits, dividends, interest income, proceeds of sales or liquidation, repayments of loans, salaries, wages and other compensation, etc.
  • A dispute settlement mechanism to settle any dispute between the countries with respect to the interpretation of the respective agreement and a dispute settlement procedure to settle any dispute between a host country and an investor of the other country

What are the modes of payment allowed to receive FDI in a Pakistan?

The funds coming into Pakistan in the newly opened custody account will be via remittance. The investor will send funds via international remittance in USD, EUR, GBP or any convertible currency, which can easily be converted in Pakistan.

Who to contact for information?

Investors can work with institutions in Pakistan that provide guidance on the overall rules, regulations, market update, tax information update and assistance on understanding market structures as and when they change. Investors can also appoint investment advisor who can help them make investment decisions for the funds and Independent Advisory Firms are available in the market that provides such services to the investors.

How do I take my money out of Pakistan once I have sold the securities under the FPI category?

Taking your money out of Pakistan Once the investor has sold the securities under the FPI investment category they can freely take the funds out of Pakistan. The instruction for the remittance can be given to the custodian bank and based on the market rate they are able to freely repatriate the funds out of Pakistan. Custodian may ask the investor to clear its dues before the remittance can be made as per the agreement between the custodian and the investor. There are options to hedge the currency risk up to a year from the date of the investment should the investor choose to do so. This facility of hedging is generally done with the custodian but the investor has the option to do it with other authorized bank as well

Do I need a visa to go to Pakistan?

Yes, all foreigners except for nationals of Nepal, Bhutan and Maldives, need a visa to enter Pakistan. With regard to Maldives’ nationals, a visa is required if intended stay in Pakistan would be longer than 90 days. Nationals of Nepal would need a visa, if they enter Pakistan via China. A citizen of Bhutan entering Pakistan by land or air does not require passport or visa for entry into Pakistan, unless entering Pakistan from a place other than Bhutan. In that case, passport is must. However, he/she must have a passport and visa for Pakistan if he/she is entering in Pakistan from China. For diplomatic and official passport holders, many nationalities are exempted from the Pakistani Visa.

How long does it take to process Pakistani visa (other than eTA)?

In case you are applying for Visa other than tourist visa, it is recommended that you apply for your Pakistan visa 3 to 4 weeks before your travel date. Although the visa itself may only take a few days to process, it is always advisable to add as much of buffer time as possible in case any issues arises during the process.

For Tourist visa (eTA), upon receipt of the Visa Application through Pakistani Visa Application Center or directly, the Pakistani Mission/ Post requires a minimum of three working days to process the case and issue a visa depending upon the nationality and excluding special cases.

Can I apply for Pakistani visa at the airport? What are other formalities at airport regarding visa?
No, it is not possible to apply for a Pakistan visa at the airport. Eligible citizens traveling for leisure/tourism purposes have the option to apply for a Pakistani eTA visa online, before they depart for Pakistan. Once visa is granted, citizens will have to get biometric information taken at the airport and the visa stamped on the passport on arrival in Pakistan.

What is an e-Tourist Visa (e-TV)?

e-Tourist Visa is a completely online application for which no facilitation is required by any intermediary/agents, etc. However its validity is 30 days and it is only valid for single entry into Pakistan. If arriving or departing by land, by sea, or from any other airport or port of entry, please apply for a traditional Pakistani visa.

What is the Port of Arrival in Pakistan which is to be filled in the application form?

The port of arrival is the location at which you first enter Pakistan. Your port of arrival is the name of the city where you initially enter Pakistan.

What is the difference between single and multiple entries?

A single entry visa allows you to visit Pakistan one time while the visa is valid. A multiple entry visa allows you to enter Pakistan several times within the validity period of the visa. The e-Visa is valid for one single entry, and for a maximum stay of 30 days.

What activities are permissible under Tourist Visa?

Tourist Visa can be granted to a foreigner whose sole objective of visiting Pakistan is recreation, sightseeing, casual visit to meet friends or relatives, attending a short-term yoga programme, etc. and no other purpose/ activity.

How long will my application be available online?

You can print your Visa Application Form within 30 calendar days of completing it online. To access your completed online application, you are required to note your Web Reference number before you exit. An Email with this information will also be sent to your valid email id, if provided. If your application is not submitted for processing within this time, the information will be purged out/deleted from the system and you will need to commence enter your details afresh. Visa Fees will not be refunded in this situation.

I made a mistake while filling up the online application. Is it possible to make corrections online?

No, there is no possibility of making corrections online once you submit your application form. However, before you submit it you can make the necessary changes.

Is tourist visa valid from the date of my arrival in Pakistan?

Tourist visas are valid from the date of issue, not from the date when you arrive in Pakistan.

Is it possible that the visa granted to me is for a lesser duration than I originally applied?

Visas are issued at the Embassy’s or Consulate’s discretion. In some circumstances, visas will be issued for a period of time that is less than what was requested.

I would be changing flights/airports in Pakistani in order to travel to my final destination (say Nepal, Thailand, etc.) Do I need a visa to change flights/airport terminals?

You need to apply for a Transit Visa if you are going to change from the International Terminal to the Domestic Terminal of any Pakistani Airport or if you are going to stay in an airport hotel even for a few hours.

In case you remain within limits of the waiting area reserved for International Transit Passengers of the Pakistani Airport and are not going to cross Immigration Controls at any time, you do not need a transit visa. Please note: the maximum period of stay in Pakistan permitted for a Transit Visa is 72 hours/3 days for each entry and is issued only when Transit/Travel is by Air. The Transit Visa is valid for 15 days only.

Can a foreign national holding ‘E’ visa coming for honorary work draw a salary?

A foreign national coming as a volunteer for honorary work with the NGOs registered in the country, may be paid a salary up-to a ceiling of PKR 10,000 per month

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:

  • An individual;
  • A group of related individuals;
  • An incorporated or unincorporated entity;
  • A public company or private company;
  • A group of related enterprises;
  • A government body;
  • An estate (law), trust or other societal organisation; or
  • Any combination of the above.
  • What is FDI?

    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.