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Old Thursday, April 27, 2006
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Post Facilitation

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
__________________
God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers? The holiest and the mightiest that the world has hitherto possessed, has bled to death under our knife....
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  #12  
Old Thursday, April 27, 2006
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Post Incorporating Companies In Pakistan

1. Methods of Conducting Business
a) Sole Proprietorship
b) Partnership
c) Company

2. Name of the Company
3. Registratrion of Company
4. Documents for Registration
5. Opening of Liaison Offices of Foreign Firms
INCORPORATING COMPANIES IN PAKISTAN
Incorporation of Companies
In accordance with the recommendation of Corporate Law Commission. Section: 4(a) of Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance, 1970 shall be deleted/repealed. There will be no ceiling of total value of assets of an undertaking / company for retaining 100% ownership by the investors.
1. METHODS OF CONDUCTING BUSINESS
There are three main forms of business:-
a) Sole Proprietorship
b) Partnership
c) Company
a) SOLE PROPRIETORSHIP
In sole proprietorship, a business or a profession is carried out by an individual on his own account. No formal procedure or formality is required to be followed for setting up a sole proprietary concern.
b) PARTNERSHIP
A partnership is a business relationship entered into by a formal agreement between two or more persons or corporations carrying on a business in common. The capital for a partnership is provided by the partners who are liable for the total debts of the firms and share profit and loss of a business concern according to the terms of the partnership agreement.
Partnerships (other than banking companies) are generally limited in size to twenty partners. The interest of a partner is transferable only with the prior consent of the other partner(s). However, a partner’s right to a share of the partnership income may be received on trust for another person.
For taxation purposes, partnerships are classified into:
(I) Registered; and
(II) Unregistered Firms:
The income of the registered firm is subject to Super Tax, before distribution to the partners. Also the individual income of the partners is subject to income tax at the usual rates.
For unregistered firms, income tax is levied on the income and the partners are not liable to pay tax on the share of profit received from the unregistered firm(s).
c) COMPANY
A company is legal entity be formed under the Companies Ordinance, 1984, it can have share capital or can be formed without share capital. A company having share capital may be formed as:
(I) Company limited by share.
(II) Company limited by guarantee.
(III) Unlimited company.
I) Company Limited by Share
Liability of its members is limited upto the extent of their share to paid upto capital of the company. These companies may further be classified as public limited and private limited companies.
Public Limited Companies can be formed by at least seven persons by subscribing their names to the ‘Memorandum & Articles of Association’ of the company. The word ‘Limited’ must be used as the last work of its name.
Private Limited Companies may be formed by at least two persons by subscribing their names to the ‘Memorandum and Articles of Association’ of the company. A private limited company, by its Article of Association’ is restricted to:-
(I) the right to transfer shares
(II) the number of its members is limited to fifty and
(III) any invitation to the public to subscribe for share is prohibited. Private Limited Company is required to use the words "(Private) Limited" as the last words of its name.
(II) Company Limited by Guarantee
Means a company having the liability of its members limited by memorandum to such amount as the members may respectively undertake to contribute to the share capital of the company in the event to its winding up. The company limited by guarantee is usually formed on a ‘no profit basis’. Guarantee limited companies must use the words "(Guarantee) Limited" as the last words of their name.
(III) Unlimited Company
Means a company having the liability of its members unlimited.
2. NAME OF THE COMPANY
The promoters of any proposed company have to obtain confirmation from the Company Registration Office that the proposed name of the company intended to be set up is available and is not identical with the name of any existing company or the proposed name is not deceptive, inappropriate etc.
3. REGISTRATION OF A COMPANY
Seven or more persons associated for any lawful purpose may subscribe their names to a memorandum and articles of association of the company and complying with the requirements of the Companies Ordinance, 1984, in respect of the registration, from a public company, and any two or more persons, so associated may in like manner, form a private company.
The promoters of the following types of companies having special business are required to obtain the letter of intent permission from ministries departments indicated below against each category:
A banking company Ministry of Finance (Investment Wing)/State Bank of Pakistan
An insurance company Ministry of Commerce
A provident society Corporate Law Authority
Incorporated as a company
An investment company Ministry of Finance/Corporate Law Authority.
A leasing company Corporate Law Authority.
4. DOCUMENTS FOR REGISTRATION
The following documents are required to be submitted with the concerned Registrar:
4.1 Private Limited Company
1. Memorandum and Article of Association:

2. Declaration on form I regarding compliance with the requirements of the Companies Ordinance, 1984, signed by one of the directs/officers of the company or an Advocate or Chartered Accountant or Cost and Management Accountant;

3. Address of the registered office of the company on Form 21; and
4. Particulars of Directors and Officers, including the Chief Executive, Secretary, Chief Accountant, Auditor, and legal Advisor on Form 29.
4.2 Public Limited Company
In addition to the documents required for a private limited company, the following documents are to be filed:-
1. List of persons consenting to act as Directs/chief Executive on Form 27; and

2. Consents to act as Directors or Chief Executive on Form 29.
No formal approval from any government agency is required for setting up any industry or business, except for the following:
a) Arms and ammunition;
b) High explosives;
c) Radio-active substances; and
d) Security printing, currency and mint.
e) Manufacture of alcohol (except industrial alcohol) is banned.
For setting up an industry, not falling under the above categories, the sponsors can directly apply to any commercial bank or development finance institution for loan, if they so desire.
Provincial governments have already notified negative areas where industries cannot be established for security, defense and environmental reasons. If any entrepreneur is interested to establish an industry in these areas, he would have to obtain location clearance from the concerned provincial government.
After purchase of the land and completion of other formalities, the sponsoring body should apply for necessary access to utilities to the concerned authorities:
Power WAPDA or KESC
Gas Sui Southern Gas Companies
Telephone & Fax Pakistan Telecommunication Corporation
Water Local Government
All manufacturing concerns, employing more than 10 persons, and required to register with the respective Provincial Chief Inspector of Industries under the Factories Act, 19984.
Companies are required to register with the concerned income tax department and obtain a National Tax Number (NTM).
No import license is required for importing plant/machinery/raw material instead the company may open a Letter of Credit (LC) for the importation of plant/ machinery/raw material with any commercial bank or authorized foreign exchange dealers.
5. OPENING OF LIAISON OFFICES OF FOREIGN FIRMS
? Foreign companies which intend to undertake export activities in Pakistan will be allowed to be registered without any formality.

? Permission to companies engaged in contractual obligations of contracts will be granted on production of valid documents without circulating to government department.

? The activities of the foreign airline companies, Pakistani General sales agents and courier companies do not come under the industrial category and therefore to monitor their operation, the government may continue to grant permission for their liaison office in consultation with the concerned agencies.
Permission for opening a liaison office will be granted by the Board of Investment in consolation with the concerned agencies.


plz pray,
Sardarzada
__________________
God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers? The holiest and the mightiest that the world has hitherto possessed, has bled to death under our knife....
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  #13  
Old Thursday, April 27, 2006
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Post Physical & Social Infrastructure

1. Road
2. Ports
3. Shipping
4. Air Transport
5. Railways

PHYSICAL & SOCIAL INFRASTRUCTURE
1. ROADS
The total length of roads in Pakistan is approximately 205,304 kilometers including 6,600 kilometers of eight inter-provincial roads, called the National Highways.
An investment of about Rs. 100 billion is being earmarked for improvement of the existing road and construction of new highways and motorways. Two major projects of rehabilitating, upgrading and modernizing the highways are already under execution. The work on the 1,200 kilometers long Indus Highway Project has started with OECF assistance. Five contracts have already been awarded to international construction companies and the work is in progress. It is expected to be completed in the next two years. The Indus Highway, an alternate North-South route on the west bank of river Indus, links Karachi and Peshawar through some less developed areas of the country.
The work on the dualization of 1,762 kilometers long N-5, historical highway linking Karachi through Peshawar is in progress. The 300 kilometers long section has already been dualized whereas work is in progress on another 600 kilometers. The contracts for the remaining length of the roads have either been awarded or are being processed.
The construction of Pakistan Motorway connecting northern and southern parts of the country with a link at Gawardar has been initiated. In the first phase of the project, Lahore-Islamabad Motorway (length of 339 kilometers) has been constructed with the assistance of a South Korean firm at a cost of US$ one billion. Along this motorway, industrial estates of 800 to 1,000 hectors at or near the interchanges are proposed to be developed. A dual carriageway is being constructed from Peshawar to Afghanistan border which would allow safe and fast flow of traffic from the sea-ports of Karachi and
Gawader to the Central Asia.
2. PORTS
Pakistan has four ports viz, Karachi, Port Mohammad Bin Qasim, Gawadar and Pasni. Karachi and Port Qasim are the major ports with cargo handling capacities of 16.1 and 6.2 million tones respectively, while the other two ports are being developed fast.
Karachi Port Modernization Project is being implemented to expand and further improve the facilities. The container and bulk fertilizer terminals are being expanded and the container terminal is being equipped with rail mounted ship-to-shore third generation gantry cranes, backed up with Mobil equipment and other infrastructure. Moreover, an LPG terminal, at a cost of US$ 30 Million, is to be completed through foreign investment. computerization and reconstruction of berth numbers 5 to 8 have already been completed. The development of Port Qasim, beside the extension of other facilities, includes construction of a bulk oil terminal at a cost of US$ 80 million in collaboration with a Japanese firm. Construction of a fertilizer terminal, grain terminal and LPG terminal are to be offered to the private sector. The operations at both the ports are being privatized.
Gawadar Port is being developed as the third major port which would serve as the gateway to the central Asian republics. The port is being linked with the motorway passing through the entire region.
3. SHIPPING
In 1971 the government nationalized the shipping industry, and merged all the shipping lines under the Pakistan National Shipping Corporation (PNSC). Later, PNSC went to the public sector also, with 90.2% government - owned enterprises ownership and 4.9% private sector ownership. PNSC has fleet of 22 vessels audits subsidiary the National Tanker Company, owns only one tanker.
The Government has issued 35 licenses to private sector companies, but so far only two companies, the Tristar Shipping and the Milwalla shipping have been set-up. Tristar Shipping Company has only one tanker, while Milwalla shipping Company has only one small vessel. Although there are only two companies under the Pakistan national flag in the private sector, a number of companies are operating under a flag of their own convenience.
The Pakistani shipping industry is dominated by the foreign shipping lines. Due to smaller size and inadequate capacity, the national fleet is presently lifting approximately 10 percent of the dry cargo and 25 percent of the liquid bulk cargo. Consequently, Pakistan is loosing approximately US$ 700 million as freight charges being paid to the foreign shipping companies.
4. AIR TRANSPORT
Pakistan is linked to almost all the countries of the world through the five international airports: Karachi; Islamabad, Lahore, Peshawar and Quetta. Karachi which is known as the gateway to Asia, has the world’s newest and the most modern airport. The national airline, the Pakistan International Airlines (PIA), now services 90 cities in 46 countries in the four continents. It also sevens over 36 cities within Pakistan. Until 1992, the airline industry was a monopoly of PIA. However, with deregulation of air traffic, domestic airlines in the private sector namely Aero Asia, Bhoja Airline and Shaheen Airline are in operation.
Karachi airport now has the best duty-free shop, Aer Rianta, east of Dubai, with "Display Center" spread over a 17,000 square feet area. The owner of the shop, Mel Sextion, is determined to make it as one of the best and the cheapest duty free shop.
5. RAILWAY
Pakistan has an elaborate network of railway track covering almost the entire country. Pakistan Railways comprises of 8,775 kilometers of track length, 907 railway stations, 78 train halts, 768 locomotives, 2,311 passenger/coaching vehicles and 35,237 freight wagons.
The following projects in railway sector in Pakistan are proposed for private partnership:-
1- Establishment of Railway Equipment Leasing Company (RECO) leasing locomotives and weapons to Pakistan Railway.

2- Provision of Rail link to Central Asian Republics.

3- Introduction of a Bullet Train between Karachi and Hyderabad.


plz pray,
Sardarzada
__________________
God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers? The holiest and the mightiest that the world has hitherto possessed, has bled to death under our knife....

Last edited by sardarzada11; Thursday, April 27, 2006 at 09:52 PM.
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Post National Environmental Policy

1. Response to Global Responsibility
2. Sustainable Development
3. National environmental Quality Standards

NATIONAL ENVIRONMENTAL POLICY
RESPONSE TO GLOBAL RESPONSIBILITY
The need for regulating and tackling multi-dimensional environmental problems has become the need of the hour. Unchecked use of hazardous chemicals, plastics and other toxic materials has polluted our land, water and air. Due to unplanned developmental activities it is imperative to check environmental degradation and degeneration through effective laws and regulatory provisions. Pakistan has been more than prompt in responding to this challenge of change.
2. SUSTAINABLE DEVELOPMENT
In order to Blanca economic growth with environmental preservation and promotion initiatives, it is important to undertake sustainable development and to create awareness, among individuals and organizations alike, for their roles and responsibilities in this regards.
3. NATIONAL ENVIRONMENTAL QUALITY STANDARDS (NEQS).
An effective legal cover, prescribing the use and checking the abuse of environmental resources, acts as a catalyst in this process. Accordingly, after extensive research and analysis, the environmental protection agencies of the Government of Pakistan have laid down the National Environmental Quality Standards (NEQS), for municipal and liquid industrial effluent and industrial gaseous emissions, motor vehicle exhaust and noise. The NEQS were enforced, in respect of municipal wastes and vehicular emissions, from 24th August, 1993 throughout Pakistan, under the Pakistan Environmental Protection Ordinance 1983. The NEQS in respect of the industrial units stand enforced with effect from 1st July 1996. Environmental protection laws and regulations are a manifestation that we are indeed poised for progress, both on investment and environment fronts.


plz pray,
Sardarzada
__________________
God is dead! God remains dead! And we have killed him! How shall we console ourselves, the most murderous of all murderers? The holiest and the mightiest that the world has hitherto possessed, has bled to death under our knife....
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