Syed Marwan Shah
Pakistan is an attractive location in the region for domestic and foreign investors, with a wide range of investment opportunities in the trade and industry sectors, reports WealthPK. The government has taken a number of measures to liberalise, privatise, and deregulate the economy. According to a representative of the Pakistan Board of Investment (BoI), the goal of Pakistan's investment policy is to foster a business-friendly environment, with the focus on further opening up the economy to attract foreign direct investment and treat foreign and local investors equally.
Furthermore, the official said, a foreign equity stake of up to 100 percent was also permitted, and there were no restrictions on remittances of royalties, technical and franchise fees, dividends, capital, and profit gains. Pakistan offers a wide range of benefits and incentives to investors as part of its efforts to draw in foreign investment. The official said there were several incentives like tax reductions, double taxation agreements, low-interest loans, etc., accessible to the corporations. In light of the above incentives, several countries and businesses have shown keen interest in investing and expanding their businesses in Pakistan.
Saudi Arabia has also decided to revive its proposal to establish a refinery and petrochemical complex in Gwadar, Balochistan. Significant investment is expected to be made in this project. Given the aforementioned benefits, a number of countries and businesses have expressed strong interest in establishing or growing their operations in Pakistan. Additionally, Saudi Arabia has chosen to resubmit its proposal for the construction of a refinery and petrochemical complex in Gwadar, Balochistan.
In this project, a substantial investment is anticipated. Pakistan – which runs five major petroleum refineries that employ outdated technologies and are currently preparing technological upgrades and capacity expansions – would introduce cutting-edge deep-conversion technology for the petroleum refinery project stalled in 2019. In addition, the United Arab Emirates (UAE) is likely to join Pakistan and Saudi Arabia in this venture, which may cost about $12 billion when completed.
In response to Pakistan's efforts to solicit $30 billion in investments from friendly and bordering nations to aid it in overcoming the post-flood challenges, Saudi Arabia, Japan, Qatar, and the UAE, in addition to China, have come forward with specific proposals identifying areas for investments. A delegation of Japanese investors visited Pakistan in August and pledged to invest $1 billion in various industrial sectors, including the automotive industry for production of hybrid vehicles. Japan indicated in October that it would be investing in the energy sector, particularly in renewable energy.
Japan also expressed interest in making large investments in the rail and aviation industries back in September. Similarly, Qatar is willing to invest $3 billion in the existing commercial and energy enterprises, such as purchasing two combined cycle thermal power plants in Punjab and leasing three international airports (Islamabad, Karachi, and Lahore). According to WealthPK research, China has emerged as the largest foreign direct investor in Pakistan, contributing 26 percent of the total FDI. This is followed by the United States, which contributes 14 percent.
As the FDI brings with it numerous benefits, its importance is well-recognized, especially in developing countries. The benefits include an increase in job opportunities, improvement in human skills through the transfer of technical and managerial skills, improvement in market access, high productivity and an increase in exports. As a result, FDI contributes to the improvement of financial, social, cultural, and environmental conditions of a nation, thus transforming its economy as a whole.
Credit : Independent News Pakistan-WealthPk