The new investment policy offers a range of advantageous aspects that can greatly benefit foreign investors who want to invest in Pakistan. One notable advantage is the elimination of a minimum investment requirement, making it easier for smaller international companies to invest in Pakistan.
Furthermore, the policy opens up all sectors in the country to foreign investment, except for casinos, alcohol, arms and ammunition, explosives, atomic energy, currency and mining.
This increased accessibility allows foreign investors to have more freedom in selecting the locations for their investments. Additionally, investors now have the option to remit their earnings in any currency of their choice, simplifying the process of withdrawing money from Pakistan, if needed.
Another significant improvement is the removal of limitations on leasing or selling land to foreign investors. This change makes it easier for them to acquire land for their businesses, particularly in the real estate sector. Foreign developers can now confidently invest in Pakistan's real estate market, providing more opportunities for foreign investors in this sector.
Moreover, foreign investors can now own 60pc of agricultural projects and 100pc of corporate agriculture farms, enabling them to actively participate in the agriculture industry.
Overall, the new policy aims to simplify the process of conducting business in Pakistan for international investors, potentially attracting more foreign investment and promoting economic expansion.
However, there are areas where the policy could be further strengthened. Firstly, the policy should be made clearer and more easily understandable to ensure that foreign investors can fully grasp its provisions.
Additionally, the government should play a more proactive role in assisting foreign investors in navigating the regulatory system and identifying suitable locations for their firms.
By implementing these simple adjustments, the strategy can become even more effective in attracting foreign investment and fostering economic growth.
Here are some concrete recommendations for enhancements:
The government should consider developing a comprehensive website that provides detailed information about the new investment policy and guides foreign investors on how to obtain an investment licence.
The government should establish a centralised hub where foreign investors can access all the necessary information and assistance required to establish a business in Pakistan.
Additionally, the government could introduce financial incentives such as subsidies or tax cuts to attract overseas investors. Here, for example, the bylaws of Dubai free economic zones can be easily copycat. Only this measure will spur in billions of dollars of investment in Pakistan. So far, most economic zones are nothing but waste lands.
Furthermore, it is crucial for the government to prioritise the improvement of Pakistan's infrastructure, including highways, electric grid and telecommunications system.
A specific law should be enacted to guarantee foreign investors can repatriate their profits or remittance in dollars or any other foreign currency. It will pave the way for a big inflow of dollars in the country.
In order to effectively demonstrate Pakistan's new business-friendly policies, supported by all stakeholders, including the Pakistan Army, it is crucial to implement a strong and proactive approach to economic diplomacy. This entails replacing traditional diplomats with commercial representatives who not only represent Pakistan's interests but also provide valuable insights and recommendations for government and bureaucratic enhancements.
Lastly, the most crucial aspect of investment in Pakistan is its flawed legal system, which has a tendency to grant stay orders and provide inadequate dispute resolution, leading to prolonged litigation. This single aspect has the potential to hinder billions of dollars in foreign direct investment. Therefore, it is imperative for the government to urgently address this issue.
By implementing these changes, the government can contribute to the growth of Pakistan's economy and make the country a more appealing destination for international investment. Consequently, Pakistan stands to gain significant benefits from the introduction of these new investment regulations.
Jan Achakzai is a geopolitical analyst, a Balochistan politician, and a former media and strategic communications advisor to GOB. He tweets @jan_Achakzai
