Legal Briefing

An investment overview of Pakistan

The In-House Lawyer Logo

Doing Business in Asia | 05 July 2019

pdf-download-button

Ever since the Chinese investment under the One Belt One Road initiative, Pakistan has emerged as a great potential market for foreign investors. This has been followed by keen interest by the world and commitments by Saudi Arabia and Qatar. With a growing economy and a change in government policy towards foreign investments, a wide range of possibilities have opened up for foreign companies to invest in various sectors in Pakistan. Foreign investors therefore need to make themselves aware of sectoral concessions/incentives and protections afforded under the law.

A recent step by the Federal Government of Pakistan to attract domestic and foreign private investment is the establishment of the Public Private Partnership Authority, which would serve as a conduit between the Government and the investor regarding public projects. Moreover, enactment of the new Companies Act 2017 and several ancillary laws, rules and policies have improved the ease of doing business in the country and these efforts have also been recognised by the World Bank in its recent ‘Doing Business 2019: Training for Reform’ report. Recent enactments have resulted in reducing the processes and cost for doing business and the creation of special economic zones throughout the country, which allow investors to avail tax concessions and easily remit capital, profits and dividends. The registration process for incorporation of companies, including foreign companies, has been streamlined and can simply be done through the online registration portal formulated by the Board of Investment and the Securities Exchange Commission of Pakistan. Similarly, requirements for approvals of branch and liaison offices of foreign companies have been expedited.

Investment safeguards include domestic laws as well as international commitments ie bilateral investment treaties with almost 47 countries. Pakistan has also signed double taxation treaties with 52 countries, which enable foreign investors to claim tax credits.

Owing to a substantial increase in development of the power and energy sector, government bodies have, in order to incentivise investors, developed security packages which provide a guarantee from the Government of Pakistan backstopping the payment obligations of the power purchaser. Additionally, recognising the role of foreign investment in innovation, the Intellectual Property Organization has established a window for the facilitation of foreign investors, which would assist foreign companies in obtaining patents, trade marks and copyright, and also ensure expeditious enforcement of infringements. Pakistan is also a signatory to the TRIPS Agreement as per the terms of which it extends the same protection to foreign nationals that it extends to its own citizens claiming intellectual property rights.

For every foreign investor, the above incentives are an appealing factor to invest in Pakistan, however, it is important to realise that identifying the risks and pitfalls of carrying out business in Pakistan requires the assistance of specialists. What is essential is engaging a law firm that has substantial practical expertise in this sector.

Who we are and what we do

With over 30 years of experience and a team of 45 lawyers spread over three cities, Ahmer Bilal Soofi & Co (ABS & Co) is one of the largest and most trusted law firms in the country. We recruit and develop exceptional talent. Our people make our firm and our focus is on innovation, efficiency and exceptional client service. We understand our clients’ current and future needs. We aim to add value in everything we do.

Our firm handles both contentious and non-contentious matters. Our practice areas are divided into separate divisions which consist of specialised teams led by our partners. Briefly, our practice areas include corporate and commercial, projects and energy, real estate, dispute resolution, public international law, competition and antitrust, labour and employment, and intellectual property.

Corporate and commercial

We work with public and private companies, financial institutions and the government. Our corporate division advises clients on cross-border contracts, mergers and acquisitions, project finance, corporate financing, foreign direct investment, procurement laws, etc. We have had the honour of representing the Government of Pakistan in greenfield and brownfield projects and have led multiple government-level negotiations for G2G contracts. Our corporate division has formulated policies for several foreign and local companies and these policies encapsulate each and every applicable requirement of the domestic laws. The corporate division is led by Sarjeel Mowahid, partner at ABS & Co.

Dispute resolution

We settle disputes in the most effective manner, whether by mediation, conciliation, adjudication or expert determination. Our dispute resolution division is led by the senior and managing partner, Ahmer Bilal Soofi. The dispute resolution team has contested several investor-state disputes before the International Court of Justice (ICJ) and international commercial arbitrations in the LCIA and ICSID. One of the notable achievements of the team is representing the Islamic Republic of Pakistan before ICC/ICSID in the $11.43bn arbitration claim and before ICJ in the Marshall Islands case.

Foreign investors ought to be mindful that Pakistan brings huge potential and gains, however, the legal framework of Pakistan demands the requisite practical experience and understanding of the relevant sector. ABS & Co has unparalleled experience in its practice areas and the legal team is focused on extending the finest legal services and assisting entities in development of their business. We look forward to hearing from you and about your interest in Pakistan.

Authors

Sarjeel Mowahid

Sarjeel Mowahid is a partner at ABS & Co and High Court advocate. He practises from the Lahore office of ABS & Co. He holds an LLB (Hons) from University of London and was enrolled as an advocate in 2005. His area of expertise is corporate advisory.

Samar Masood

Samar Masood is an associate at the Lahore office. She graduated with honours from the School of Oriental and African Studies (SOAS), University of London and completed her LLM from the University of Chicago in 2017. Samar’s area of interest is intellectual property law where she has worked on various issues related to international intellectual property law and its domestic application.

 

Bakhtawar Bilal Soofi

Bakhtawar Bilal Soofi is an associate at the firm’s office in Lahore where he works as part of the dispute resolution practice. He has over four years of experience as a litigator and handles contentious matters related to constitutional, employment and tax issues in the High Courts.

 

Ahmed Reza Mirza

Ahmed Reza Mirza is an associate at the Lahore office who works as part of the corporate and commercial practice. He graduated from the University of London in 2016 and soon after joined ABS & Co. His areas of focus include company law, corporate compliance, contractual, legislative and opinion drafting, procurement law and labour law.