Pakistan Investment Policy (IT Sector: 100% Foreign Ownership)
Briefing
By Rahnuma · AI-generatedThe Pakistan Investment Policy 2013 establishes a framework for foreign direct investment (FDI) in Pakistan's IT sector, permitting 100% foreign ownership of IT companies without requiring a local partner or shareholder. The policy guarantees full repatriation rights, allowing foreign investors to transfer profits, dividends, and capital back to their home countries without restrictions. Section 3 of the policy outlines the ownership provisions, while Section 5 addresses repatriation mechanisms. The policy aims to position Pakistan as an attractive destination for technology investments and is administered through the Board of Investment (BOI).
Plain-language explanation
The Pakistan Investment Policy 2013 is a government directive that opens Pakistan's IT sector to complete foreign ownership. Before this policy, foreign investors typically needed a Pakistani partner holding at least a portion of the company. Now, a foreign entrepreneur or corporation can set up and fully own an IT company in Pakistan, keeping 100% of the ownership. A key benefit is the ability to send all profits, dividends, and eventually the initial investment back to their home country in foreign currency without government interference. For example, if a US-based software company establishes a wholly foreign-owned subsidiary in Karachi, it can hire staff, develop products, and transfer all revenues back to the US parent company. The policy is administered by the Board of Investment, and companies still need standard business registrations but face no sector-specific ownership restrictions. This makes Pakistan comparable to regional competitors like India and Bangladesh in terms of foreign ownership rules for the technology sector.
Compliance & opportunity checklist
- Register the company with SECP and obtain Certificate of Incorporation under the Companies Act 2017.
- Apply for National Tax Number (NTN) from FBR within 30 days of incorporation.
- Register with Pakistan Software Export Board (PSEB) to qualify for IT sector incentives.
- Open a foreign currency account with an authorized dealer bank to facilitate repatriation transactions.
- Ensure compliance with anti-money laundering documentation requirements for foreign investment inflows.
- File annual returns and maintain proper books of accounts as per Companies Act requirements.
- Apply for work permits for foreign technical staff through the Board of Investment if needed.
- Review eligibility for any tax exemptions available to IT companies under the policy.
Key numbers
Foreign Ownership Limit
100 percent
· Section 3
Profit Repatriation
100 percent
· Section 5
Capital Repatriation
100 percent
· Section 5
Local Partner Requirement
0 percent
· Section 3
Minimum Investment
Not specified
Policy Year
2013
· Preamble
Registration Bodies
3 agencies
· Implementation
Sectors Covered
IT Sector
· Section 2
Work Permit Validity
Standard immigration rules
· BOI Guidelines
Late NTN Registration
Not specified
· FBR Rules
Frequently asked
By Rahnuma · AI-generatedCan a foreign company own 100% of an IT company in Pakistan without a local partner?
Yes, the 2013 Investment Policy permits 100% foreign ownership in the IT sector without requiring a local partner or Pakistani shareholder. This means a foreign entity or individual can establish and fully own an IT company operating in Pakistan.
How can foreign investors repatriate profits and capital from Pakistan?
Under the policy, foreign investors have full repatriation rights for all profits, dividends, royalties, and capital gains. Section 5 specifies that these transfers can be made in foreign exchange through authorized banks at the prevailing exchange rate without seeking additional approvals.
Does this policy apply to all types of IT and technology companies?
The policy covers the IT sector broadly, including software development, IT services, call centers, data processing, and digital services. Companies should verify specific sub-sector classifications with the Board of Investment (BOI) to confirm eligibility.
What registration requirements must a foreign-owned IT company fulfill?
Foreign-owned IT companies must register with the Securities and Exchange Commission of Pakistan (SECP), obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR), and register with the Pakistan Software Export Board (PSEB) to access available incentives.
Are there any restrictions on hiring foreign nationals in IT companies?
The policy generally permits employment of foreign nationals in IT companies, subject to standard work permit requirements from the Ministry of Interior. IT companies may also apply for special fast-track visa facilities for technical staff through the Board of Investment.
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