1. Manpower.
2. Social Facilities.
3. Raising Finance.
4. Exchange Control.
5. Insurance, Banking and Financial Sector Banking.
6. Transfer of Technology.
7. Taxes/Levies.
8. Miscellaneous.
FACILITATION

To improve working relations among the employers & employees and to increase the productivity, Labour Laws have been revised:-
1. Manpower:
Contract Labour.
In order to improve the productivity and efficiently in the country the contract labour system will be encouraged for the industries to improve our work force and to be competitive in the world market.

Right to Replace Unwilling Workers:
The right to replace unwilling workers by willing workers will be exercised under the provisions of relevant Law for violence, undisciplined, and loss of productivity.
Consolidation of Labour Laws:
The difficulties are being faced by the employers in the country due to numerous laws which are at present in vogue in matters conversing the labour field. The existing labour laws will therefore, be reduced to a few essential laws covering terms and working conditions of employment, wages and other benefits, safety and labour welfare. A Commission will be constituted for the purpose of consolidation, simplification and rationalization of labour laws.
Out Siders and Trader Union Activity:
Outside trade union activity under ILO - Agreement will be trade based but not factory based.
? Trave Unionism:
The mushroom growth of trade unions at the plant level has been a source of constant disruption in the pace of industrial relations foiling genuine efforts by the parties to promote mutual confidence. In order to check mushroom growth of trade unions, the unions receiving less than a minimum level of support (20% of the votes) in referendum will stand dissolved automatically and their registration be canceled.
National Productivity Council:
National Productivity Council will be set up to suggest measures to increase productivity and to also link wages with productivity.
? Minimum Wage Council:
A tripartite National Wage Council will be set up to systematically determine the minimum wage for different business activities, industries and occupations in different provinces by taking into account the typical realities and state of economic growth of the province.
Workers Profit Sharing:
In view of rise in cost of living, the law of Worker’s Profit Participation Fund will be amended so as to enhance the wage limit to a reasonable extent and to give benefit of profit share to a maximum number of workers. A Committee consisting of representatives from Ministry of Labour, FPCCI and National Trade Unions shall decide the limit for this purpose.
2. Social Facilities:
Foreign nationals (investors, executives, expatriate employees) having "CBR’s Pass-Booklet" will be allowed for duty-free import of food stuff and other consumable items equivalent to US$ 2000 per year per person in Pakistan. However, the imports exceeding the above duty free limit of $ 2000/- will be allowed on payment of normal import duties.
To facilitate the investors, executives and technical experts coming from Japan and Korea, import tariff & procedure for food items be reviewed and rationalized by CBR in consolation with BOI, Pak-Japan as well as Pak-Korea Investment Forum.

Different Communities of foreign investors and their employees will be allowed to establish their Exclusive Clubs having recreation facilities.

One Airport Entry Pass for Protocol purpose will be issued to designated person of foreign and local investors / companies, provided volume of equity investment is US$ 10 Million.

The BOI will extend courtesy service for deception, hotel booking accommodation, transport booking and drawing up itinerary, etc for foreign investors visiting Pakistan.
3. RAISING FINANCE
Rupee loans are granted to Pakistani nationals residing within or outside Pakistan and who are maintaining foreign currency accounts against security of the balance held in such accounts. Forwarded cover is also provided by State Bank of Pakistan in respect of despots received in foreign currency accounts in Deutsche Mark, Japanese yen, US dollar and Pound Sterling. Foreign currency accounts have been exempted from payment of income tax as well as wealth tax, and decoction of Zakat (Islamic Tax of 2.5 per cent on the total wealth). Credit card facility from the banks in Pakistan can be obtained against the balance in foreign currency accounts. Foreign currency account holders can also obtain credit card facility outside Pakistan against lien on such accounts.
4. EXCHANGE CONTROL
? The facility for contracting foreign private loans will be made available to all those foreign investors, who make investment in approved sectors (open to foreign investment), for financing the cost of imported plant and machinery required for setting up the project.

? Foreign controlled manufacturing concerns will be allowed for domestic borrowing according to their requirement of working capital (without any limit), irrespective of their exports.

? For foreign controlled Semi-Manufacturing concerns, the borrowing entitlement will be increased to 75% (of paid-up capital including reserves) and in case of foreign controlled non-manufacturing concerns (trade/services), it will be increased to 50%.
INSURANCE, BANKING AND FINANCIAL SECTOR BANKING
? There is already presence of foreign financial institutions both in the form of branches of commercial banks and through share holding in some Investment Banks and Leasing Companies. However, it is strongly felt that there is need to upgrade and strengthen banking institutions to increase their capability for long term financing. The role of Investment Banks needs to be made more effective and the Concept of Venture Capital be promoted. Foreign investment in such institutions will be encouraged with the objective of importing expertise in the areas.

? In view of the importance of SMIs as vehicles of development, there is need to ensure availability of adequate credit for such institutions. Small Business Finance Corporation (SBFC) will be re-organized/restructured with the purpose of making this an objective institution for financing SMIs. Possibility of converting this into a bank would be considered.

? Presently foreign investment in Insurance Sector is permitted upto 51%. Ministry of Commerce is reviewing the policy for this sector. It is noted that there are a number of areas in Insurance Sectors like: Corp Insurance., Flood Insurance and Health Insurance etc. The existing insurance companies could, therefore, enlarge the scope of their operations to cover the neglected sectors. Consideration will also be given to allow new companies who can, address areas like corp. flood and health insurance.
6. TRANSFER OF TECHNOLOGY
? The payments on account of royalties & technical service fees to foreign companies be taxed @ 15%. However, reduced rates under the treaties with different countries will remain applicable.

? The law will be introduced for the protection of Intellectual and Industrial Property Rights and a mechanism will be devised to enforce the law.
7. TAXES / LEVIES
? At the moment there are 24 different taxes which are levied by the Federal and Provincial Governments and the local authorities. These taxes has been rationalized and the number reduced as follows:-
Federal Government:
Three Taxes (Customs duty, Sales Tax/Excise Duty, Income Tax).
Provincial Governments:
One consolidated Tax.
Local Authorities:
One consolidated Tax.
? Land title transfer fee at present is as under:-
- Stamp Duty = 8.5%
- Capital Value Tax = 2.5%
- Local Govt. Tax = 5%
- Registration Fee = Rs. 50/- (per Document)
These levies are considered to be high. Provincial Governments will consider reduction upto 50% of these fees.
8. Miscellaneous
1- The discretion of Customs/CBR to increase the declared import C&F value removes transparency from the valuation process, and increases the effective rate of duties which encourages for smuggling. The valuation process will, therefore, be reviewed by CBR in consultation with BOI, FPCCI and OICCI, to make it more transparent.

2- Growth and capital formation in the organized industrial sector is painfully slow. Rather there is a flight of capital of whatever is saved. The encouragement of formation of Holding Companies will result:-
3- reduce sponsor share holding thereby increasing liquidity.
4- have a multiplier effect of increasing the capital was as well as the free float.
5- have a larger market capitalization which will attract foreign institutional interest and help in raising money through international instrument.
6- help industrial groups expand and maintain control with lower share holding.
7- free resources for new investments.
8- provide a macro outlook which will help in strategic planning.
9- promote easier fund raising from financial institutions due to broader capital base

plz pray,
Sardarzada