Thursday July 18, 2024

‘STZs to encourage more startups and increase success rate’

By Bilal Hussain
May 26, 2022

KARACHI: Special Technology Zone Authority (STZA) Chairman Amer Hashmi said that opportunities in the tech startup industry were ripe in Pakistan and the incentives startups would get in the STZs would further give them a boost.

“STZs would certainly help tech startups to flourish,” Hashmi said. “Ten-year tax holiday and other incentives such as uninterrupted electricity and internet would attract more investment in the country’s tech startups that have been seeing upward trajectory since the last couple of years.”

Pakistan’s tech-based startups attracted $550 million during the last couple of years. Meanwhile, Pakistan’s total IT exports stood at $1.44 billion in FY2020, which increased to $2.1 billion in FY2021. Experts see an upwards trajectory for the sector’s exports.

Hashmi said that startups face liquidity issues and tax incentives improve their liquidity status subsequently increasing chances of their success.

Pakistan has great potential to attract investment in IT and technology, but there has to be an enabling environment in the country for that to happen. “Investors don’t come to countries where the environment is not enabling no matter how lucrative a market may seem,” Hashmi added.

The IT and ITeS sector has the potential to lift Pakistan’s economy with government and regulatory support as well as other incentives such as reduced or exemptions in taxes.

The chairman clarified that STZs would invite and entertain all technology based industries such as cell phone makers as well.

Government has issued a mandate to establish the STZA, which would provide legislative and institutional support for the development of the national technology sector. STZA, created under the Cabinet Division has started to work to develop a technology-driven knowledge ecosystem, and encourage modern innovative solutions and futuristic entrepreneurship.

STZA is developing STZs across Pakistan, providing special incentives to attract investors, builders, and technology companies to partner with the government, and provide one-window facilitation to local and international companies in the STZs.

Ultimately, the authority aims to

build knowledge ecosystems that harness Pakistan’s tech potential and set the country on the trajectory of an entrepreneurial, innovative, and tech-driven future.

Pakistan aims to provide institutional and legislative support for the technology sector by providing fiscal and forex incentives as per the STZA Act 2021 to attract foreign direct investments, incentivise futuristic entrepreneurship, enable job creation, and commercialise technological knowledge.

Hashmi said STZs would offer world-class technology infrastructure, ease of doing business, and availability of knowledge workers to create a conducive

environment for investors and entrepreneurs.

The STZA is currently implementing its ‘National Roll Out Plan’ under which 5 special technology zones (STZs) have already been launched in Islamabad, Punjab and Khyber Pakhtunkhwa. The authority intends to launch a total of 14 zones located across Pakistan in the coming months.

The STZA offers tax incentives to licensed Zone Enterprises and Zone Developers including a 10-year tax holiday, a favourable forex regime and one-window regulatory support.

The eligible zone enterprises and zone developers benefit from fully repatriable investments, profits and dividends,

inward remittances into foreign currency accounts without conversion requirements into rupee, the ability to conduct legitimate overseas payments without any limitation or approval, ease of opening and maintaining foreign currency accounts and specialised forex regulations for entities operating inside an STZ.

“The STZs are envisioned to enable Pakistan to make technology interventions to accelerate the implementation of the Sustainable Development Goals (SDGs) – ultimately to support the socio-economic development to create equal opportunities for its citizens, reduce poverty, empower women in tech and enable the Pakistani youth to create a better tomorrow for Pakistan,” he said.