ISLAMABAD: The government has announced plans to unveil Pakistan’s first-ever Industrial Policy soon, proposing the establishment of a National Land Bank and facilitating the return of offshore capital for investment from overseas Pakistanis.
These measures under the proposed Industrial Policy will only be implemented once the International Monetary Fund (IMF) grants its approval; otherwise, they cannot proceed. The aim is to facilitate the return of offshore capital for investment. A capital reinvestment framework is under consideration to enable overseas Pakistanis and domestic investors to legally channel offshore capital into investments, provided it does not originate from countries on the FATF grey or black lists. “This framework must comply with IMF guidance, be transparent, and distinct from amnesty-style programmes,” the policy proposes. It may include the issuance of Industrial Bonds (for industrial clusters or infrastructure) to provide a route for capital re-entry with long-term security and liquidity. “This is expected to require amendments to the Income Tax Ordinance 2001 and the Protection of Economic Reforms Act 1992,” official sources stated.
The Industrial Policy envisages modernising the legal framework for insolvency to provide breathing space for viable businesses to be restructured, encourage debt restructuring, and reduce risks for creditors. The Corporate Rehabilitation Act 2018 and Corporate Restructuring Act 2016 should be amended to offer legal standstill protections against creditor actions during restructuring or dispute resolution, enabling firms to reorganise and continue operating without the immediate threat of liquidation. The new reforms should extend eligibility to small and medium-sized enterprises (SMEs) and introduce a statutory court-ordered moratorium (stay) to align with global insolvency standards.
Investors will benefit from enhanced protection against the retrospective application of fiscal rules, operational safeguards against spurious Suspicious Transaction Reports (STRs), and a legally secure framework for domestic and foreign investors. The Securities and Exchange Commission of Pakistan (SECP) Act 1997 will be amended to reinforce the statutory autonomy of the SECP and require its approval for law enforcement agencies acting within its domain.
With the support of the Special Investment Facilitation Council (SIFC), the policy proposes consolidating a national land bank, designating these areas as industrial estates, and providing robust land-lease options for manufacturing. The Industrial Policy also proposes reforming Special Economic Zones (SEZs) and Export Processing Zones (EPZs) using Pakistan Steel Mills (PSM) land, assessing zone performance, addressing bottlenecks, and reforming occupation policies to maximise export output.
One-Stop Shops (OSSs) in SEZs and industrial estates often underperform. Investors continue to face delays in land allotment, utility connections, and regulatory approvals due to fragmented responsibilities between federal and provincial governments. Building on the success of the Pakistan Single Window, one-stop shops need to be digitalised, and their services integrated across agencies to provide timely investor services. There is a need to harmonise zoning laws across major cities through the Council of Common Interests (CCI) and Special Investment Facilitation Council (SIFC) to facilitate the transition of industries into designated estates. Additionally, there is a need to develop legislation to be adopted by provinces, create a framework for land leasing customised based on industry type and land dynamics, and improve connectivity by paving link roads between industrial parks and major motorways.
