Digital FDI Initiative Pakistan 2025

Investment Income Tax exemption for 10 years (SEZ)Act FBR 2012 *See SEZ Act 2012 above Income Tax exemption for developers and enterprises (STZA)Act FBR 2020 *See STZA Act 2020 above Foreign Funding for Start-upsRevision (to Foreign Exchange Manual Regulations)SBP 2021Allows for a necessary boost to the start-up ecosystem in Pakistan by enabling access to much-needed capital from international investors, which can help them scale up and compete in global markets. Issues in opening foreign currency accounts and the shortage of dollars in the country mean barriers to accessing foreign funds still remain as impediments to start-ups efficiently accessing such funds. Draft Companies RegulationProposed DraftSECP 2022Necessary update to the 2017 Companies Act to ensure procedural ease and effective compliance with a more systematic regulatory regime. However, there has been a delay in approval and finalization of the draft. Support for starting digital businessesNational Freelancing Facilitation PolicyPolicy MoITT 2021Encourage the development of the freelancing industry in Pakistan by providing support, incentives and infrastructure for freelancers and their clients, such as tax exemptions, access to finance and high-speed internet connectivity. However, there are risks of exploitation, unfair competition and non-payment, particularly for new and inexperienced freelancers who may lack the bargaining power, legal protection and social security of formal workers, and who may be subject to low rates, long hours and unstable income. Regulatory Sandbox GuidelinesRules SECP 2019First regulatory provision that enables the testing and development of financial products, services and business models. However, there is now a critical need to expand cohorts and adapt the policy to keep up with rapid digitalization. National Skills for All StrategyPolicy MoFEPT 2018First national strategy aimed at improving the quality and relevance of vocational education and training programmes. While initially, digital and high-tech skilling were highlighted as key areas under the strategy, this has not translated into a scalable shift towards an increase in high-quality technical workforce to drive digital capacity in the country. Level of national connectivity (backbone) National Broadband Policy 2021 (Draft) Policy MoITT 2021Aims to expand high-speed internet access across Pakistan to drive economic growth, setting ambitious targets for increasing broadband penetration and quality of service. Gives special attention to improving broadband access and affordability in rural and remote areas. The draft policy does not adequately address existing infrastructure gaps and challenges. There is a need for more concrete measures to ensure quality of service and consumer protection. It has also had limited buy-in from industry due to concerns about addressing core issues. Mobile Device Manufactur- ing PolicyPolicy MoITT 2020Aimed at promoting the local manufacturing of mobile devices to reduce reliance on imports, create employment opportunities and stimulate economic growth. A new policy, the Mobile Device Manufacturing and Export Policy, is under review by the industry and is expected to be moved by the MoITT in 2025. Under this, Harmonized System (HS) code semi-knocked down (SKD) and completely knocked down (CKD) levels of manufacturing will be proposed. Import bans amid the current economic crisis badly affected the mobile device manufacturing industry and weakened the implementation of the existing policy, which did not have safeguards in place to respond to the changing economic landscape. Digital FDI Initiative: Digital FDI-Enabling Project in Pakistan 28