ISLAMABAD  - Chairman Board of Investment (BoI) Saleem H Mandviwala on Saturday said that the approval of Special Economic Zone (SEZ) Bill 2012 by the Parliament would help attract foreign direct investment and encourage local investors by providing legal cover to their investments.

Addressing a press conference here, he said that the National Assembly had approved the SEZ Bill 2012. It took more than three years to draft the bill as all the provinces and other stakeholders were taken on board.

The incentive package was approved in 2008 by the Economic Coordination Committee of Cabinet but it remained under discussion, he added.

He said that the Cabinet had accorded approval in principle for the legislation in 2010. However, the bill was also considered by the Council of Common Interests (CCI) after the passage of the 18th Constitutional Amendment.

“The SEZ Bill has been enacted to meet the global challenge of competitiveness to attract foreign direct investment (FDI) and will help create an industrial cluster with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction”, he remarked.

He further said that the law envisaged to reduce processes through SEZ, ensure consistency and transparency in economic policies and restore investor confidence.

The BoI Chairman said that the bill would guarantee that incentive once granted would not be withdrawn due to conflict of interests.

He said that all SEZs, whether public, public-private or private-private, would be regulated as per this Act and the Board of Approval (BOA) headed by the Prime Minister would meet as required.

The board will take decisions with majority of the members present in the meeting, he added.

Saleem Mandviwala said that the SEZs would have exemption from custom duties and taxes for all capital goods imported into country for the development, operations and maintenance of a zone.

The exemption from all taxes on income accruable in relation to the development and operations of the SEZ for a period of ten years will start from the date of signing of the development agreement, he added.

He further said that zone enterprises have exemption from custom duties on imports of capital goods and exemption from taxes on income for a period of 10 years form the date of its certified development.

With the approval of the BOA and after consultations with the provincial governments and concerned SEZ authorities, the BoI shall frame rules and regulations necessary for implementation of this act with in next two months,he added.

He said that the provincial governments would also be requested to start the process as soon as rules were framed to promote foreign investment as well as to encourage the local business.

The Chairman said that some of the investor countries like Korea, China  and Japan were expecting to benefit from the scheme as soon as it became operational.