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FOREIGN PRIVATE
INVESTMENT (PROMOTION AND PROTECTION) ACT, 1976
ACT XLII OF 1976
An Act to provide for promotion and protection of foreign private investment in
Pakistan
[Gazette of Pakistan, Extraordinary, Part I, I5th dune, 1976]
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 Pakistan and for matters ancillary. thereto.
It is hereby enacted as follows:
1. Short title, 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 Pakistan--
(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 Pakistan and the establishment whereof, in the opinion of the
Federal Government is desirable; or
(b) Which is not being carried on in Pakistan on a scale adequate to the economic and
social needs of country; or
(c) which will contribute to--
(i) the development Of capital, technical and managerial resources of Pakistan;
(ii) the discovery, mobilisation or better utilization of the national resources;
(iv) increasing employment opportunities in Pakistan; or
(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 undertakings 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 provide for adequate compensation
therefor to be settled in the currency of the country Or origin of the capital or
investment and specifies the principles on and the manner in which compensation is to be
determined and given.
6. Reparation 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 Ist day of
September 1951. 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 or 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 undertakings 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
Pakistan.
(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 appeal to it to be necessary. for
tire purpose of removing the difficulty:
Provided that no such power shall be exercised after the expire 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 Pakistan and foreign nationals in
industrial undertaking having foreign private investment.
12. Repeal.--- The Foreign Private Investment (Promotion and Protection)
Ordinance, 1976 (XIV of 1976), is hereby repealed.
