Board of Investment


Important Investment Policies and Acts

Investment Policy 2013

FDI Strategy 2013-17

Investment Acts

UNCITRAL rules on transparency in treaty based investor state arbitration. Clear Copy


Sectors Overview

Agriculture and Allied

Sector Overview: 

Pakistan has a rich and vast natural resource base, covering various ecological and climatic zones; hence the country has great potential for producing all types of food commodities. Pakistan is agricultural super power in many ways but the yield is very low. There is 22.45 million hectares under cultivation area of which 16.5 million hectares is only in Punjab.

  • Dairy: Pakistan has impressive dairy industry which can be exploited to its real potential. Even with huge productivity gaps in the sector, Pakistan is the fourth biggest milk producing country in the world. Milk production can easily be tripled by employing simple methods while investments in transferring of technology and latest measures can further milk output by 900 per cent. Pakistan produces 35 billion liters of milk from around 5 million animals which is worth Rs.177 billion.
  • Livestock and Poultry: The livestock sector can quite rightly be called the country’s hidden secret. Pakistan has 3rd largest livestock population and livestock and poultry sectors contributed 11.9% to GDP in FY 2012-13. Meat demand in Pakistan is growing at approx. 6% per annum, while poultry alone contributes about 20% towards the total meat production.
  • Fisheries: Pakistan has a total coast line of 1050 km. and has a total fishing area of approximately 300270 sq. kms. Pakistan’s fishing grounds are termed as highly rich in marine life with a vast variety of species having commercial importance. Fisheries, as a subsector, play a significant role in the national economy and towards the food security of the country, as if relaxes the existing pressure on mutton, beef and poultry demand.

Investment Growth Potential

  • Of the total 16.5 million hectares of cultivable land in Punjab, a vast 1.7 million hectares is still available for corporate farming. Likewise, as much as 30% (3.4 MT) of horticultural produce that goes to waste every year, can be converted into economic gain by investing agribusiness value chain industries.
  • Despite being 4th largest milk producer globally and an average annual milk demand growth of 20%, only 3-4% of milk is processes in Pakistan. Significant potential for setting up processing units for local consumption and export exists.
  • With 3rd largest livestock population, the average yield of milk per animal is one of the lowest in the world. Opportunity for investment in breed improvement, animal husbandry, veterinary medicines.
  • Meat demand in Pakistan is growing at 6% per annum and traditional fattening techniques are outdated. Fattening farms with modern techniques are an area of investment. Likewise, abattoirs, meat processing units, halal meat export etc., represent significant growth potential.


Power and Energy 

Sector Overview: Pakistan is facing a severe power deficit since demand for electricity grew by 6-8% per annum in the past years without a commensurate addition in generation capacity. Power deficit estimated to cost the economy 2% of GDP per annum. Current power deficit stands between 5,000-8,000 MW. Current energy mix for power generation is heavily dependent on thermal power generation (approximately 70% of generation mix) and the focus is to encourage investments in indigenous resources to generate cheap electricity such as coal, nuclear, hydropower, solar and wind energy generation.

  • Total Installed Capacity – 22,797 MW
  • IPP Share – 9802 MW (43%)
  • Active Installed Capacity – 19,522 MW
  • Annual Power Generation 2012 – 12,277 MW

Investment Growth Potential

The current demand and supply gap of 5,000-8,000 MW and demand growing at 8% per annum ensures guaranteed uptake of power produced by IPP projects at market competitive prices.

  • Liberal and transparent policy for investors to set up IPP projects.
  • One window facilitation for power projects – PPIB at federal level.
  • Guaranteed power purchase produced by IPPs, backed by sovereign guarantee of GoP provides a very secure investment climate for investors.
  • GoP has set up power parks at various locations where the Government will develop the site with water, power-evacuation and access provided. The investors only have to set up power projects at these locations with the entire support infrastructure in place.
  • Power Parks being set-up at Gaddani (6,600 MW coal potential) and Quaid-e-Azam Solar Park (6,000 MW solar potential).
  • The hot sandy desert of Thar, houses one of the largest lignite coal reserves in the world. The lignite is dark brown, grayish black or black in colour.
Coal Reserves Billion Tons












Mining &Gems
Sector Overview: 

Pakistan has excellent mineral potential including precious metals, dimension stones, industrial minerals, rock salt, coal, etc. but the potential has not been developed commensurately. Mismatch primarily due to capital intensive nature of investment. The mining and quarrying sector grew by 7.6% in 2012-13 as against 4.6% for the year before. To date, over 1,400 mining concessions have been granted and the sector contributes 2.4$ to GNP.

Pakistan has a good edge for the gems and jewellery sector, the availability of gemstone as raw material is in abundance as well as the additional factor of low cost of production, talented, energetic, and hard working artisans are the significant promising features for investment. The value addition at source by gem processing will be in the interest investors as the raw material will be readily available and processing can be made comparatively at lower cost.

Investment Growth Potential

Pakistan Mineral Development Corporation offers joint ventures in following projects:

  • Gold & Base Metals Exploration in the Northern Areas of Pakistan
  • Coal Briquetting Plan
  • Coal mining for small thermal power plants
  • Production of Ultra Refined Salt
Infrastructure / Construction
Sector Overview: Government of Pakistan recognizes the importance of improving and expanding its infrastructure services for sustaining economic and social development. Improved quality and service coverage in power and water supply, sewerage treatment, transport and logistics are vital for Pakistan’s economy and the livelihood of its people.

The construction industry in Pakistan consumes 80% of National Development Budget. Fiscal constraints require innovative approaches – away from the traditional mode of financing by the Government. Accordingly, the GoP has assigned top priority to developing low income housing under Private-Public partnership/Joint Venture. Public Private Partnership (PPP) are considered to be the way forward for development and delivery of infrastructure leveraging private sector financing and expertise. The construction industry had a total value of approx. USD 3.78 billion in 2012 and this value is expected to rise to around USD 10.4 billion by 2020.

To effectively govern, facilitate the development and efficiently administer the PPP projects in Pakistan, PPP policy has been developed at the Federal level. Federal PPP policy has been approved by the Economic Coordination Committee of the Cabinet. The policy covers, but is not limited to, the following infrastructure sectors:

  • Transport and logistics
  • Mass Urban Public Transport
  • Local Government Services
  • Energy Projects
  • Tourism Projects
  • Industrial Projects
  • Irrigation Projects
  • Social infrastructure

Investment Growth Potential

  • It is estimated that Pakistan looses approximately 4% to 6% of its GDP due to infrastructural constraints.
  • With the population of the country rising at a rate of four million per annum, there is a need of 650,000 housing units annually. However, only 350,000 units per year are being added, leaving a shortfall of 300,000 per annum, which represents a significant investment opportunity.
  • Rising level of urbanization inclined to increase from 34.9% in 2005 to 50% by 2035, as estimated by United Nations, provides ample development opportunity in the sector.
  • Securities & Exchange Commission of Pakistan has introduced two types of Real Investment Trust Schemes, namely rental and developmental providing opportunity to general public to pool funds for investment in real-estate sector.
IT & Telecom
Sector Overview: Pakistan’s telecommunications industry holds tremendous potential for growth, investment and development. Currently, Pakistan is one of the fastest growing telecommunications market and since 2005; an FDI of approximately $ 5.7 billion (net) has been received in Pakistan’s telecom sector. The sector contributes 3% contribution to GDP and is equipped with strong human resource base, which is well-trained and educated. The sector has more than:

  • 121.13 million cell phone subscribers,
  • 2.2 million Broadband subscribers, and
  • 30 million internet users overall.

Investment Growth Potential

  • Emerging technologies (3G, 4G/LTE) coupled with transparent and liberal licensing policy provides a good launching pad for new investment in the sector.
  • Pakistan ranks 4th globally in terms of broadband growth and has only 2.2 million broadband subscribers out of an estimated population of 180 million, i.e., broadband penetration of 1.22%  provide a largely unaddressed market and a blue ocean opportunity for investors.
Sector Overview: Pakistan is the 8th largest exporter of textile products in Asia. This sector contributes 8.5% to the GDP and provides employment to 40% of industrial labor force.  Pakistan is the 4th largest producer of cotton with the third largest spinning capacity in Asia after China and India, and contributes 5% to the global spinning capacity. Export of cotton denim fabrics from Pakistan increased from 263 million sq. meters worth Rs 26.77 billion in 2010-11 to 320 million sq. meters worth Rs. 35.34 billion in 2011-12, thus showing an increase of 32% in terms of value. The major markets during 2011-12 were Bangladesh, Turkey, Egypt, and Colombia.

For Pakistan which was one of the leading producers of cotton in the world, the development of a textile Industry making full use of its abundant resources of cotton has been a priority area towards industrialization. At present, there are 1,221 ginning units, 442 spinning units, 124 large spinning units and 425 small units which produce textile products.

The sector consumes 40% of banking credit to manufacturing sector and drives shipping, transport, insurance, machinery, dyes/chemicals, printing, packaging and allied sectors as well.
Investment Growth Potential

  •  Despite being 4th largest cotton producer in the world, Pakistan’s comparative advantage is marginalized by low value added exports as reflected in the country’s 12th rank in global textile exports by value.
  • Significant opportunities exist in setting up value addition units, such as apparel lines to build strong sector base.
  • The textile sector has primarily been outward looking i.e. export focused, however with rising quantity and quality of domestic consumption, the industry would need to expand capacity to meet local demand and thus provide investment opportunities.
Retail Sector
Sector Overview:The Pakistani retails industry is one of the least concentrated in the world as there are few major chains, low rates of car ownerships, home registration, purchasing power and relatively small number of modern retail formats mean the most Pakistanis shop daily at small neighborhood mom-and-pop specialty shops. They are spread across the length and breadth of the country. Indeed the numbers of traditional mom-and-pop stores have mushroomed in recent years. Pakistan is showing up more brightly on the radar screens of major retailers, largely due to massive and growing population of roughly 170 million people. Although, the country is developing, it experienced strong economic growth in period 2004-2007 thereby boosting consumer spending power. In addition, street markets, roadside vendors and hawkers operate in all major cities and villages across Pakistan. In many rural areas, this informal sector forms an important retail channel and holds a critical position owing to their access to fresh produce. Supermarkets remain in their infancy in Pakistan and few supermarkets operation is even limited to country’s commercial capital, Karachi and Lahore.

Investment Growth Potential

  •  Supermarkets are the most modern grocery distribution format in the country at present and is expected that they will grow in number and popularity over the coming years as modern distribution channels develop.
  •  With a growing middle income class (estimated at about 25% of the total population), increasing urbanization, growing popularity of international food products, and a rising number of international restaurants and fast food chains, Pakistan is emerging as an expanding market for US and European products.
  •  Major European retail giants Metro Group and Carrefour have taken the plunge. The former has operated cash and carries since 2007, while the later has a franchise agreement with its Middle East partner since 2009.
Sector Overview: Pakistan possesses huge potential to become a manufacturing and exporting hub of the auto industry for renowned original equipment manufacturers (OEMs) of the world. By 2013, there were 3,200 units of automotive industry with the investment of Rs 92 billion, employing 3.5 million people and producing annually 1.8 million motorcycles and 200,000 vehicles. The sector contributes 3% to the GDP. Vehicle Sales correlated with interest rate regime, especially for small-low and economy segments, whilst purchases in small-high (1300 CC and above) correlated with rising income level. The sector recorded significant positive growth of 17% during financial year 2012-2013. The auto-part Industry is generating exports of Rs 128 million.

The support of local automobile companies and the auto-part vendors has attained excellence in some fields at par with the global standard but there is a room for further development for vendors to scale up their production with the cutting edge technology and emerging trends in the international automobile market.
Investment Growth Potential

  • Pakistan has a low motorization rate of 18 vehicles per 1000 persons compared to a global average of 341. The low motorization rate along with rapid urbanization, there is significant potential for growth in this sector. With rising income levels and standards of living, vehicle purchases across all segments are expected to increase significantly, rationalizing investment in the sector.
Financial Services
Sector Overview: Banking system of Pakistan comprises of 38 Commercial Banks, 10 Microfinance Banks and 8 Development Finance Institutions.  The banks/DFIs are operating with a network of 11,911 branches across the country. Pakistani banks have international presence in 36 countries around the globe, in almost all regional territories with 106 branches, 9 subsidiaries and 15 Representative Offices.

The financial system of the country is dominated by banking sector with private banks holding around 78% of the total assets of the banking system. Public sector banks and foreign banks hold 20% and 2% share in total assets respectively.
The balance sheet of the banking sector has increased to Rs. 9.9 trillion and its financial position is as under:

  • Total Equity – $ 8.4 billion
  • Total Liabilities – $ 89 billion
  • Total Assets – $ 99 billion

The commercial banks listed on stock market posted an after tax profit of $ 1.18 billion, showing a 9% growth year on year.

To acquire Commercial Banking License and Microfinance Banking License, Banking Policy & Regulations Department, State Bank of Pakistan may be contacted.
Investment Growth Potential

  • Pakistan has been transformed into a country with liberalized Foreign Exchange regime to attract Foreign Direct Investment in the country. Pakistan’s investment policy provides complete freedom of investment and repatriation of profits/ dividends/ dis-investment proceeds to the foreign investors in line with the overall investment policy of Government of Pakistan. The only requirement of SBP with respect to FDI inflows is the registration of FDI with SBP. A foreign investor is free to repatriate profit/ dividend and orderly dis-investment proceeds at any point in time without any approval from Central Bank. Further, with regard to portfolio investment, foreign investors are allowed to make investment in Pakistani stocks, Govt. securities and registered corporate debt instruments listed on Stock Exchanges in Pakistan through Special Convertible Rupee Account (SCRA) opened with an Authorized Dealer (bank).
  • Existing outreach and penetration of financial services is low – 7 branches per 100,000 people and 0.22 branches per 1,000 km and 226 bank accounts per 1,000 adults.
  • Opportunity of introducing innovative products and innovative banking such as mobile banking etc.
  • Equity markets booming with Karachi stock exchange adjudged best stock market based on risk-adjusted-return.
Sector Overview: Pakistan has a blend of beauty and historic sites, ranging from the peaks of Karakorum to the historic civilization of Mohenjo-Daro. Tourism development can be a massive source of earning for Pakistan as it possesses top-class tourist attractions from the stunning Himalayan peaks, beautiful lakes, scenic valleys, rich culture, centuries-old civilizations, vast deserts, golden beaches of Makran to all the other natural and man-made attractions. In addition to this, the country has a long water coast of the Arabian Sea in the southern region.

Tourism services such as airlines, hotels, resorts, road transportation provide unique business avenues to investors in the diversified geographical regions of Pakistan.

Sector Overview: Pakistan’s pharmaceutical industry has the potential to propel the country to a much needed economic prosperity estimated at $5 billion plus in a span of five years. Presently, however, Pakistan has a negligible presence in the global pharmaceutical industry of almost $1 trillion that is expected to grow to $1.1 trillion by 2014. Pakistan’s pharmaceutical industry stands at a little over $2.1 billion with exports of roughly $190 million.
The cumulative annual growth rate of pharmaceutical industry has been 12% during the last three years and local companies launched 2,956 products from 2008 to 2012 as compared to just 193 products by multinational companies.

Due to low population penetration rate of the healthcare, sales do not show seasonality and remain flat, generally. Total pharmaceutical market is valued at $ 1.6 billion of which 53% share is held by local companies. Major international players in Pakistan are GlaxoSmithKline Pakistan, Johnson & Johnson, Aventis Ltd., Abbot, Novartis, and Pfizer etc.

Investment Growth Potential

  • Due to rising life expectancy, spending in healthcare is expected to rise in the coming years and forecasts predict Pakistan to be 11th largest pharmaceutical market globally by 2016.
  • Parma industry export size currently stands at around $ 100 million and has the potential of crossing $1000 million mark.