Updated: Friday March 29, 2013/AlJumaa
Jamada El Oula 18, 1434/Sukravara
Chaitra 08, 1935, at 08:24:22 AM
The Foreign Private Investment
(Promotion and Protection) Act, 1976
ACT XLII OF 1976
An Act to provide for the promotion
and protection of foreign private investment in
The
following Act of Parliament received the assent of the president on 4th June,
1976 and is hereby published for general information:---
Whereas, it is expedient to provide for the promotion and
protection of foreign private investment in
It
is hereby enacted as follows:---
1.
Short tile, commencement and application.
(1) This Act may be called the Foreign Private Investment (Promotion and
Protection ) Act, 1976.
(2)
It shall come into force at once.
(3) It shall apply to all industrial undertakings in Pakistan having foreign
private investment established with the approval of the Federal Government
after the first day of September, 1954:---
Provided
that nothing in this Act shall be in derogation of any facilities or protection
specifically sanctioned by the Federal Government to foreign private Investment
in the case of a particular industrial undertaking or a class of industrial
undertakings or such facilities or protection as may be available to foreign
private investment under a bilateral investment treaty.
2. Definition. (1) In this Act, unless there is anything repugnant in
the subject or context, ---
(a) 'foreign capital' means investment made by a foreigner in an industrial
undertaking in
(i) in the form of foreign exchange, imported machinery and equipment, or
(ii) in any other form which the Federal Government may approve for the
purpose;
(b) 'foreign private investment' means investment in foreign capital by a
person who is not a citizen of Pakistan or by a company incorporated outside
Pakistan, but does not include investment by a foreign Government or agency of
foreign Government.
(c) 'industry undertaking' means an industry, undertaking or establishment
engaged in the production, distribution or processing of any goods, the
providing of services specified in this behalf by the Federal Government or the
development and extraction of such-mineral resources and products as may be
specified in this behalf by the Federal Government.
(2) Words and expressions used but not defined in this Act shall have the same
meanings as in the Companies Act, 1913 (VII of 1913).
3. Field for foreign private investment. The Federal Government may
consistent with the national interest, for the promotion of foreign private
Investment, authorise such investment in any industrial undertaking,---
(a) which does not exist in
(b) which is not being carried on in
(c) which will contribute to,---
(i) the development of capital, technical and managerial resources of
(ii) the discovery, mobilization or better utilization of the national
resources;
(iv) increasing employment opportunities in
(v) the economic development of the country in any other manner.
4. Approval of foreign private investment. Where the Federal Government
sanctions an industrial undertaking having foreign private investment, it may
do so subject to such conditions as it may specify in this behalf.
5. Protection of agreements. (1) Where the Federal Government considers
it necessary in the public interest to take over the management of an industrial
undertaking having foreign private investment or to acquire the ownership of
the shares of citizens of Pakistan in the capital of such industrial
undertaking any agreement approved by the Federal Government relating to such
undertaking entered into between a foreign investor or creditor and any person
in Pakistan shall not be affected by such taking over or acquisition.
(2) Foreign capital or foreign private investment in an industrial undertaking
shall not be acquired except under due process of law which provides for
adequate compensation therefore to be settled in the currency of the country of
origin of the capital or investment and specifies the principles on and the
manner in which compensation is to be determined and given.
6. Repatriation facilities. Subject to the provisions of the Foreign
Exchange Regulation Act, 1947 (VII of 1947).
(a) a foreign investor in an industrial undertaking established after the 1st
day of September 1954, and approved by the Federal Government, may at any time
repatriate in the currency of the country from which the investment
originated,---
(i) foreign private investment to the extent of original investment;
(ii) profits earned on such investment; and
(iii) any additional amount resulting from the re-invested profits or
appreciation of capital investment; and
(b) a creditor of an industrial undertaking referred to in clause (a) may
repatriate foreign currency loans approved by the Federal Government and
interest thereon in accordance with the terms and conditions of the said
loan:---
Provided that nothing in this section shall effect the terms of the permission
to make such investment granted to a foreign investor before the commencement
of this Act.
7. Remittances by foreign employees. Foreign nationals employed with the
approval of the Federal Government in any industrial undertaking having foreign
private investment may make remittances for the maintenance of their dependents
in accordance with the rules, regulations or orders issued by the Federal
Government or the State Bank of Pakistan.
8. Tax concession and avoidance of double taxation. (1) The Federal
Government may allow such concessions to industrial undertaking having foreign
private investment as may be admissible under any law for the time being in
force.
(2) Foreign private investment shall not be subject to other or more burdensome
taxes on income than those applicable to investment made in similar
circumstances by citizens of
(3) Foreign private investment shall be allowed all the tax concessions such
may be admissible on the basis of any agreement for avoidance of double
taxation which the Government of Pakistan may have entered into with the
Government of the country of origin of such investment.
9. Equal treatment. Industrial undertakings having foreign private
investment shall be accorded the same treatment as is accorded to similar
industrial undertakings having no such investment in the application of laws,
rules and regulations relating to importation and exportation of goods.
10. Removal of difficulties. If any difficulty arises in giving effect
to any provisions of this Act, the Federal Government may make such order, not
inconsistent with the provisions of this Act, as may appear to it to be
necessary for the purpose of removing the difficulty:---
Provided that no such power shall be exercised after the expiry of one year
from the commencement of this Act.
11. Power to make rules. The Federal Government may, by notification in
the official Gazette, make rules for carrying out the purposes of this Act and
such rules may, among other matters, provide for the employment of Pakistani
and foreign nationals in industrial undertakings having foreign private
investment.
12. Repeal. The Foreign Private Investment (Promotion and Protection)
Ordinance, 1976 (XIV of 1976), is hereby repealed.
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