Tax Overview and Recommendations

Special tax regimes for specific industries or sectors Related Business Factors Special tax regimes apply in the following industries: Insurance sector - Fourth Schedule to the Income Tax Ordinance, 2001 Exploration and production / extraction of Petroleum / Mineral Deposits - Fifth Schedule to the Income Tax Ordinance, 2001 Banking Seventh Schedule to the Income Tax Ordinance, 2001 - The forms of legal entities commonly used for conducting business in Pakistan are a body corporate and a company. The minimum capital requirement for a Private limited company is Rs.20, for a Public unlisted limited company is Rs.30 and for a Public listed limited company is Rs.70 There are no other significant local requirements for establishing a legal entity - even 100 percent foreign equity is allowed. Foreign exchange dealings are regulated under the Foreign Exchange Regulation Act, 1947. Foreign currencies are made available to persons/companies doing business in Pakistan for all purposes under rules which have been clearly defined by the Central Bank i.e. State Bank of Pakistan (SBP). There are no restrictions on the availability of foreign currency for imports (except for import of banned items or for imports from Israel). Business houses can buy foreign currencies for all other commercial transactions like payments for export claims, commission payment to foreign agents on exports, royalties, franchise / technical fees and dividends software licenses/ maintenance / support fees, advertisement abroad in newspapers and magazines, business travel etc. under the rules laid down by SBP. Foreign investment in Pakistan enjoys full protection and repatriation facilities. The Foreign Private Investment (Promotion and Protection) Act, 1976 provides guarantees for repatriation of foreign investment to the extent of original investment, profits earned on such investment, and appreciation of capital. KPMG © 2016 KPMG International Cooperative ("KPMG International"). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. All rights reserved.

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