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Karachi Export Processing Zone.

Karachi Export Processing Zone is located on the outskirts of the city, about 10 kilometers from the nearest rail station, 7 kilometers from Port Qasim and 32 kilometers from Karachi Port and container terminal. The total areas of the zone is about 200 acres with further 100 acres available for expansion. Almost 89 acres are given over to roads, service, green areas and administration building. About 105 acres is available for industrial, commercial and warehousing activities.

The zone is fully serviced at a cost of US $ 12 million provided by the Pakistan Government. Each entrepreneur constructs his own building on land leased by the Authority. Export Processing Zone Authority is an efficient organisation and has maintained an excellent physical environment in the zone. Major developments are as under:

Industrial Sector: 330 plots of 100 Sq.M.

Commercial Sector: 70 plots of 4000 Sq.M. to 1500 Sq.M. each.

Financial sector: 33 plots of 96 Sq.M. to 216 Sq.M. each.

Down payment for industrial plot is US $12/Sq.M. and for Commercial & Financial Sector plots is US$35/sq.M. Annual ground rent is US$2.5/Sq.M. and US$3.5/Sq.M. respectively. Infrastructure of the zone includes electricity: 10 M.V., at 11 K.V. (3 phase 50 HZ AC system). Gas: 600,000 cft per day and water with daily supply of 500,000 gallons per day and reservoirs of 1.30 million imperial gallons. No industry spreading environmental pollution is allowed to establish a unit in EPZA. Before getting sanction they have to give an undertaking that they would not create any environmental pollution.

The Role and

Objectives of KEPZ

The objective behind establishment of Zone is that foreign investors as well as overseas Pakistanis should make investment in the Zone with foreign currency producing goods for export. Ideally Zone investors should produce high-tech products, viz, electronics, precision engineering, computers, medical equipment, engineering goods etc.

The resident Pakistanis have now been allowed to put up projects fully sponsored by them, however, out of their foreign exchange resources. Generally the Zone investors are happy over the industrial environment of Zone due to following reasons: The atmosphere of the zone is peaceful.

1) Building costs in the zone are lower because of duty-free access to local raw material.

2) Infrastructure is good. Supplies of electricity, water and gas are reliable.

3) Security is not a problem.

4) Companies have been saved from interference of various government departments.

5) Customs procedures are quite reasonable: it takes three to four days for a container to reach zone.

6) The Authority is easy to approach and willing to accommodate all reasonable requests.

Incentives

A wide range of incentives are provided to KEPZ investors. One Window Service: A one-window facility has been established in order to simplify procedures to be undertaken by KEPZ units.

Fiscal Incentives

The following fiscal incentives are offered to investors.

i) Tax holiday upto 2000 year A.D. and thereafter 25 per cent in perpetuity.

ii) Income chargeable under the head "salary" of foreign personnel attached to enterprises operating in the zone is exempt from income tax for 5 years from the date of arrival in Pakistan.

iii) Any income accruing or arising outside Pakistan is free from tax.

iv) Any income chargeable under the head, "capital gain", is not taxable.

Customs Duties and Taxes

i) Total exemption from federal, provincial and local taxes is given on imports and exports.

ii) Furthermore, simplified procedure for import and export have been established.

Repatriation of Capital and Profit: The Government of Pakistan guarantees full repatriation of capital, profits and dividends.

Promotion of Joint Venture Investment: A very prominent feature of Zone's, industrial set-up is that in many cases the investments have flown into the Zone in the form of joint venture between foreign investors and non-resident Pakistanis. The investment has originated from UK, Middle East, USA etc.

The KEPZ units are producing a vide range of products consisting of readymade garments, electronics, leather garments, watches, etc. which are being exported to the markets of USA, UK, EEC, Gulf market and the Far East.
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Title Annotation:Pakistan
Publication:Economic Review
Date:Nov 1, 1995
Words:688
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