Special Economic Zones of Pakistan

The Board of Approval

The BOA is the highest authority for the purposes of the establishment, operation, and monitoring of any SEZ pursuant to the Act.

Functions of BOA

As specified under Section 6 of the Act, the BOA can:

• Approve regulations applicable to all, some, or just a single SEZ, for the purposes of implementation of the Act.
• Decide on whether to reject or accept zone applications and development agreements.
• Examine the issues submitted by the SEZ Authorities and developers.
• Grant additional benefits, if justified, to any specific category of SEZs to promote high-tech industries.
• Examine the annual reports submitted by the SEZ Authorities and direct actions on them.
• To improve the existing policies, it is mandatory for the BOA to annually review the implementation of the Act.

The Board of Investment (BOI)

The BOI was established under the Board of Investment Ordinance 2001. It is also known as the focal point of contact for domestic and foreign investors, highlighting important information and assisting them to be in correspondence with Government entities. It additionally enhances Pakistan’s International competitiveness and involvement in both economic and social development.

Functions of the BOI

The responsibilities of the BOI in the context of SEZs have been encapsulated in Section 8 of the Act. As the Secretariat of the BOA and Approval Committee, the BOI is responsible for the following:

• Coordinating all SEZ-related activities which also include preparing documents that will be considered by the BOA.
• Make sure that all the decisions of the BOA are implemented.
• Processing zone applications, that are submitted by SEZ Authorities, for them to be considered by the BOA.
• Processing applications pertaining to additional incentives (additional benefits).
• Reviewing all development agreements proposed by the SEZ Authorities before sending them to the BOA where the final decision takes place.
• Promoting international and domestic SEZ investments.
• Facilitating coordination of developers and zone enterprises with Federal and Provincial government entities and other financial institutions.
• Supporting and facilitating SEZ Authorities, if requested.

Provincial Investment Promotional Authority

As per Section 3(k) of the Act, PIPA is an investment promotion agency developed by the provinces, which plays the role of a focal entity promoting domestic and foreign investment in that specific province.

Functions of PIPA

The functions of PIPA include:

• Assisting in the operation of Provincial SEZ Authorities or Committees.
• Promote domestic and foreign investment.
• Assisting the SEZ Authorities and developers in matters such as the acquisition of land.
• Ensuring good infrastructure development linkage between the authorities involved in an SEZ and also ones that are not involved as such.
• Effectively and systematically resolve any issues that arise during the operations of the plans for SEZs.
• Facilitating the compliance of the enterprises and developers with environmental regimes.

SEZ Authority

An SEZ Authority has been established for each province.

Functions of SEZ Authority

The functions of the SEZ Authority include:

• Establishing rules and procedures with the approval of BOA.
• Preparing zone applications.
• Selecting appropriate developers.
• Negotiating development agreements.
• Assisting in the acquisition of land and access to public utilities for the developers or enterprises after the application has been approved.
• SEZ Authorities in the Provinces or in any other area shall seek to enter into administrative arrangements with tax, customs, labor and other authorities under which SEZ authorities may exercise certain administrative functions on behalf of such authorities, which arrangements may include a secondment of officials with decision ­making power from such authorities to SEZ Authorities.
• Preparing zone regulations for specific SEZs by being mindful of the area.
• Being in correspondence with Federal and Provincial entities.
• Ensuring the development of infrastructure outside an SEZ’s boundaries.
• Serving as a liaison and between the Federal and relevant Provincial Authorities.
• Facilitating the availability of public utilities as per the requirements of the development plan.
• Monitoring the effective implementation of the SEZs administrative procedure.
• Overlooking the compliance of enterprises or developers with their obligations that were encapsulated in the development agreements.
• In case of any violation of the terms specified in the development agreement by the developer or enterprise, suspending the development and leaving the final decision in the hands of the BOA.
• Reviewing the activities of these developers regularly (minimum once a year).
• Reporting the progress of the SEZ in the relevant province to the BOA biannually.

SEZ Committee

An SEZ Committee is to be chartered by the BOA.

Functions of SEZ Committees

• Administering and enforcing SEZ benefits and rules.
• Examining and approving SEZ entry applications as per the criteria.
• Providing for certification of zone enterprises.
• Conducting oversight of enterprises.
• Enforcing building codes for SEZs.
• During the process of construction, assisting enterprises in relevant registrations and approvals.
• Acting as a point of correspondence between zone enterprises and utility providers. 
• Facilitating tax authorities, government regulators, and enterprises.