Loading...
STZA, software technology parks, IT park incentives & zone benefits
| Zone Name | City/Province | Developer | Status | Key Benefits | Reference |
|---|---|---|---|---|---|
| Islamabad Technopolis | Islamabad | STZA | Active | 10-year tax holiday, full FX repatriation | |
| Lahore Technology Park | Lahore, Punjab | PITB/STZA | Active | R&D incentives, duty-free imports | |
| Karachi IT Corridor | Karachi, Sindh | STZA | Planning | Proximity to port, 5G infrastructure | |
| Peshawar Tech Zone | Peshawar, KP | STZA | Planning | Youth-focused, subsidized power | |
| Quetta Digital Hub | Quetta, Balochistan | STZA | Planning | Border trade integration | |
| 250+ Tech Parks/Incubators | Nationwide | Various | Active | PSEB, PITB, NIC network |
| Incentive | Federal Benefit | Provincial Benefit | Duration | Notes | Reference |
|---|---|---|---|---|---|
| Income Tax Holiday | 100% exemption | Matching provincial exemption | 10 years | From date of commercial production | |
| Customs Duty | Exempt on import of plant & machinery | No additional duty | One-time | Capital goods only | |
| Sales Tax | Exempt on imports into SEZ | Exempt within zone | Ongoing | Inter-zone transfers exempt | |
| Withholding Tax | Reduced rates | Province may reduce | 10 years | Varies by transaction type | |
| Capital Gains Tax | Exempt on SEZ business assets | Matching exemption | 10 years | Subject to conditions | |
| Stamp Duty | Reduced rates | Provincial rates apply | Varies | Depends on province | |
| Foreign Exchange | 100% repatriation allowed | N/A | Ongoing | SBP regulations apply | |
| Employment Laws | Federal labor laws apply | Provincial laws apply | Ongoing | Provincial amendments possible |
| Benefit | SEZ Enterprise | STZA Zone | Non-SEZ IT Company | Reference |
|---|---|---|---|---|
| Income Tax | 0% for 10 years | 0% for 10 years | 29% corporate / 0.25% PSEB WHT on exports | |
| Import Duty | One-time exemption on capital goods | Duty-free import | 0-5% on PME | |
| WHT on Exports | 0.25% PSEB / 1% non-PSEB | 0.25% PSEB | 0.25% PSEB / 1% non-PSEB | |
| FX/Repatriation | 100% repatriation + 35% FCY retention | 100% repatriation | 100% repatriation | |
| Domestic Sales | 20% of production allowed | Per STZA policy | 100% | — |
| Startup Tax Holiday | 0% for 3 years (s.65F) | 0% for 3 years | 0% for 3 years if PSEB startup | — |
| FED on Bandwidth | Exempt for PSEB | Exempt | Exempt for PSEB; 19.5% otherwise | — |
| Provision | Details | IT Company Impact | Reference |
|---|---|---|---|
| Section 2(l) — Zone Enterprise | Enterprise established in SEZ with valid development agreement | IT companies must register as zone enterprise to qualify | |
| Section 3 — SEZ Declaration | Federal Government declares areas as SEZ on BOI recommendation | IT parks can be declared as SEZ | |
| Section 5 — Development Agreement | Developer signs agreement with SEZ Authority specifying zone parameters | Enterprise must sign sub-agreement with developer | |
| Section 10 — Tax Holiday (10 Years) | Income tax exemption for 10 years from date of commercial operation certification | Zero income tax = massive savings vs 29% corporate rate or 0.25% PSEB WHT | |
| Section 10 — Tax Holiday (Developer) | 10 years from date of signing development agreement | SEZ developer also gets 10-year tax holiday | — |
| Customs Duty Exemption | One-time exemption on all capital goods imported (PCT 9917(2)) | Duty-free import of IT server racks, networking gear, and equipment | — |
| Section 13 — SEZ Authority | Each SEZ governed by Authority (provincial or federal) | Interact with Authority for approvals and certifications | — |
| Section 17 — Environment | SEZ enterprises must comply with environmental laws | Data center power/cooling must meet green standards | — |
| Section 22 — Offenses | Penalties for misrepresentation, fraud in SEZ applications | Ensure accurate investment and employment commitments | — |
| Co-Developer Rights | Co-developer gets same incentives as developer if developer relinquishes rights | IT park operators can qualify as co-developers | — |
| SEZMIS Registration | Online registration via SEZ Management Information System on BOI portal | Apply digitally — track application status on BOI website | — |
| Domestic Market Access (EPZ) | Up to 20% of production can be sold in domestic market from Export Processing Zones | IT services can partially serve domestic market while in EPZ | — |
| FX Relaxation (SEZ/EPZ) | Exemption from foreign exchange regulations inside Export Processing Zones | IT exporters can freely manage foreign currency inside EPZ | — |
| Land Lease | SEZ land available on 99-year lease or outright purchase (varies by zone) | Check specific zone — IT parks may offer shorter flexible leases | — |
| One-Window Operation | All government approvals through single SEZ Authority interface | Fast-track: SECP, NTN, PSEB, bank, municipality — all through SEZ one-window | — |
| Incentive | Details |
|---|---|
| Tax Exemption | 100% income tax exemption for 10 years (extendable) |
| Customs Duty | Exemption on import of capital goods |
| Sales Tax | Exemption on goods and services within zone |
| Capital Gains | Tax exemption on disposal of zone assets |
| Foreign Exchange | Full repatriation of capital and profits |
| Regulatory Ease | One-window operations, simplified procedures |
PSEB operates 43 Software Technology Parks nationwide:
| Benefit | Details |
|---|---|
| Reduced Utility Rates | Subsidized electricity and internet |
| 24/7 Power | Uninterrupted power supply guaranteed |
| Infrastructure | Ready-to-use office space with connectivity |
| Networking | Community of IT companies, events, mentorship |
| Government Access | Easier access to government tenders and programs |
Application: Through PSEB portal (techdestination.com)
| Feature | STZA Zone | Software Technology Park | Export Processing Zone |
|---|---|---|---|
| Tax Holiday | 10 years | Per PSEB benefits (1% tax) | 5-10 years |
| Customs Exemption | Yes | PSEB-certified companies | Yes |
| Sales Tax Exemption | Within zone | On IT exports | Within zone |
| Infrastructure | Purpose-built | Shared IT parks | Multi-sector |
| Regulatory Ease | One-window | Standard + PSEB | One-window |
| Application | stza.gov.pk | techdestination.com | EPZA / provincial |
| Benefit | Details | Source |
|---|---|---|
| Income Tax Holiday | 10 years — 0% income tax for SEZ enterprises | SEZ Act 2012 (amended 2015), SEZ Act §13 |
| Duty Exemption | One-time customs duty exemption on all imported capital goods, plant, and machinery | SEZ Incentive Package |
| Presumptive Tax (EPZ) | 1% presumptive income tax in Export Processing Zones | SEZ Rules 2013 |
| FX Exemption | Exemption from foreign exchange regulations in EPZs | SEZ Act 2012 (amended 2015) |
| Domestic Sales | Up to 20% of production can be sold in domestic market from EPZs | SEZ Rules 2013 |
| No Repatriation Restrictions | 100% repatriation of profits/dividends in original currency | Investment Policy 2023 |
| SEZ | Province | Status | IT Relevant? |
|---|---|---|---|
| Rashakai SEZ | KP | Under Development | Yes — CPEC priority |
| Hub SEZ | Balochistan | Under Development | Yes |
| Bostan SEZ | Balochistan | Under Development | Adjacent |
| Hattar SEZ | KP | Under Development | Industrial |
| Korangi Creek SEZ | Sindh | Notified | Yes — Karachi IT hub |
| M3 Industrial City | Punjab | Under Development | Mixed |
| Allama Iqbal Industrial City | Punjab | Under Development | Mixed |
| Value Addition City | Punjab | Notified | Mixed |
Per the Board of Investment Investment Policy 2023:
The Special Technology Zones Authority (STZA) manages technology-specific economic zones offering 10-year tax holidays and duty-free import of plant and machinery. Companies must register with STZA and meet technology-sector criteria.
Combine SEZ benefits with PSEB registration for maximum advantage: 1% income tax (PSEB) + tax holiday (SEZ) creates significant savings during the initial 10 years of operations.
| Section | Provision | IT Relevance |
|---|---|---|
| Section 2(n) | Definition of "Special Economic Zone" — geographically defined and delimited area notified by BOA | All IT parks and tech zones must be formally notified |
| Section 4 | SEZs can be established by Federal or Provincial Governments, with private parties, or via PPP | Private IT parks can apply for SEZ status |
| Section 5 | Board of Approvals (BOA) chaired by Prime Minister — approves/rejects zone applications and development agreements | IT zones need BOA approval |
| Section 10 | Provincial SEZ Authorities — each province has its own authority with Chief Minister as Chairperson | IT zones apply to provincial SEZ Authorities |
| Section 23 | SEZ Committee at each zone — examination/approval of enterprise applications, oversight, certification | IT companies apply to zone SEZ Committee for admission |
| Section 34(2) | BOA may grant additional benefits to hi-tech industries or particular regions | IT/ITeS qualifies as hi-tech — eligible for additional incentives |
| Section 36(a) | Developers: One-time customs duty exemption on all imported plant and machinery (except Chapter 87 — motor vehicles) | IT infrastructure (servers, networking, generators) — duty free |
| Section 36(b) | Developers: Income tax exemption for 5 years from date of signing development agreement | SEZ developers get 5-year tax holiday |
| Section 37(a) | Zone Enterprises: One-time customs duty exemption on all imported plant and machinery for installation in the zone (except Chapter 87) | IT companies in SEZs: duty-free import of servers, computers, equipment |
| Section 37(b) | Zone Enterprises: Income tax exemption for 10 years from commencement of commercial operations (if commence before 30 June 2020); 5 years if commencing after | Critical: New entrants after 30 June 2020 get 5-year holiday (amended), but IT/ITeS priority sectors may get extensions — verify with BOI |
| Section 38(1) | All SEZ benefits are additional to benefits under generally applicable legislation and international agreements | SEZ benefits stack with PSEB 0.25% WHT and other IT incentives |
| Section 38(2) | SEZ benefits shall not be withdrawn prematurely; changes must be to the advantage of developers/enterprises | Grandfathered protection — SEZ benefits cannot be reduced after commitment |
Source: SEZ Act 2012 (amended 2015) — Board of Investment (Federal)
Income derived by a zone enterprise as defined in the SEZ Act 2012 is exempt from income tax for 10 years starting from the date the developer certifies that the zone enterprise has commenced commercial operation. For co-developers, the 10-year period starts from the date of signing the development agreement.
Source: BOI SEZ Incentive Package — Clause 126E (Federal)
Capital goods (as defined in the preamble of Part-I of the Fifth Schedule to the Customs Act) and firefighting equipment, except items under Chapter 87 (motor vehicles), imported for setting up an SEZ by zone developers and for installation by zone enterprises — one-time exemption from all custom-duties and taxes. Co-developers (as defined in SEZ Rules 2013) are also entitled, provided the developer relinquishes its rights in favor of the co-developer.
Source: BOI SEZ Incentive Package — PCT 9917(2) (Federal — Customs)
| Provision | Detail | Legal Basis |
|---|---|---|
| 100% Foreign Ownership | IT & ITeS companies: 100% foreign equity allowed, no government permission required | PIP 2023, Section 10.1.1 (Federal) |
| Profit Repatriation | Foreign investors may repatriate capital, profits, dividends in currency of investment or any freely usable currency, subject to SBP FX regulations | PIP 2023, Section 13.6 (Federal) |
| Royalty/Fee Remittance | Remittance of royalties, technical assistance fees, franchise fees, BPO-related payments allowed per SBP Foreign Exchange Manual | PIP 2023, Section 13.6 (Federal) |
| Most Favoured Nation | Foreign investors receive MFN and national treatment — no less favorable than domestic investors | PIP 2023, Section 13.3 (Federal) |
| Protection from Expropriation | No expropriation except for public purpose, non-discriminatory, with due process and adequate compensation at market prices in freely usable currency | PIP 2023, Section 13.4 (Federal) |
| Investment Grievance Redressal | Investment Ombudsman established for dispute resolution with government agencies | PIP 2023, Section 13.10 (Federal) |
| IPR Protection | Three specialized IP Tribunals; IPO window for foreign investors | PIP 2023, Sections 13.11-13.12 (Federal) |
| Land Acquisition | Foreign companies can acquire land on leasehold rights; no limitation on onward transfer unless contractually specified | PIP 2023, Section 13.8 (Federal) |
| Incentive Stackability | SEZ benefits are additive to PSEB and other IT-sector incentives | SEZ Act, Section 38 (Federal) |
Source: Pakistan Investment Policy 2023 — Board of Investment (Federal)
| Province: | Khyber Pakhtunkhwa |
| Total Area: | 1,000 acres |
| Industrial Area: | 702 acres |
| Remaining: | 778 acres |
| Price/Acre: | USD 150,000 |
| Type: | Public |
| Province: | Sindh |
| Total Area: | 220 acres |
| Industrial Area: | 118 acres |
| Plots Remaining: | 1 (of 203) |
| Price/Acre: | PKR 60 million |
| Type: | Public |
| Province: | Punjab |
| Total Area: | 4,356 acres |
| Industrial Area: | 3,049 acres |
| Plots Remaining: | 6 (of 613) |
| Price/Acre: | PKR 7.30 million |
| Type: | Public |
| Province: | Punjab |
| Total Area: | 2,800 acres |
| Industrial Area: | 1,969 acres |
| Location: | Sahianwala Interchange, Faisalabad |
| Type: | Public |
| Province: | Balochistan |
| Total Area: | 406 acres |
| Industrial Area: | 284 acres |
| Remaining: | 284 acres |
| Price/Acre: | PKR 10 million |
| Type: | Public |
| Province: | Khyber Pakhtunkhwa |
| Total Area: | 440 acres |
| Industrial Plots: | 345 (44 remaining) |
| Price/Acre: | PKR 7.4 million |
| Type: | Public |
| Area: | 200 acres (140 industrial) |
| Price/Acre: | PKR 2.5 million |
| Businesses: | Fruit processing, Agriculture machinery, Minerals/gems, Ceramics, Cold storage, Electrical appliances, Motorbike assembly, Pharma, Halal food |
| Developer: | Industries Dept, Govt of Balochistan — (+92-81) 9201 881 |
| Area: | 215 acres (157 industrial) |
| Plots Remaining: | 0 (all 128 plots allocated) |
| Price/Acre: | PKR 7.3 million |
| Businesses: | Textiles, Engineering, E&E, Chemical, Food Processing, Pharma, Automobiles, Packaging, Building Material |
| Developer: | FIEDMC — (+92-41) 9230231-34 |
Sources: SEZ Act 2012 | SEZ Rules 2013 | SEZ Incentive Package — Board of Investment (Federal)
Per the STZA Annual Book 2022-2023, the Authority has made significant progress:
| Initiative | Status | IT Company Impact |
|---|---|---|
| 3-Year Strategic Plan | Submitted to Finance Division — KPIs connected to budget | Transparent performance accountability; zone KPIs tied to IT sector growth |
| Legal & Regulatory Framework | 5 regulations drafted: Authority Rules, Fee Structure, Licensing Framework, 2 Development Agreement types | Clarity on zone licensing, fee predictability, and developer obligations |
| Provincial Framework | Draft finalized with provincial consultation — pending Board approval | Standardized licensing evaluation across all provinces; local zone access |
| Better Regulations Unit (BRU) | Operational — collaborating with SECP for API integration | Unified IT/ITeS registration on SECP e-services portal via STZA collaboration |
| National Rollout Plan | Multiple STZs being notified across Pakistan | Increased availability of tech zones with tax holidays nationwide |
| Customs SRO 744(I)/2023 | Duty-free import for STZA zone enterprises | Servers, networking, and IT equipment can be imported duty-free into STZs |
Source: STZA Annual Book 2022-2023 (PDF) | STZA Act 2021 (PDF) | SRO 744(I)/2023 (PDF) (Federal)
The Special Technology Zones Authority (STZA) governs Special Technology Zones (STZs). New ZE Application Guidelines (Feb 2025) detail the process:
| Category | Sub-Sectors |
|---|---|
| AI & ML | Artificial Intelligence, Machine Learning, Data Science, NLP |
| Big Data & Analytics | Big Data Analytics, Quantum Computing |
| Cloud & IoT | Cloud Computing, Internet of Things, Distributed Ledger |
| Fintech & Blockchain | Mobile Payment, Fintech, Blockchain |
| AR/VR & Robotics | Augmented/Virtual Reality, Robotics, Wearables |
| Health & EdTech | HealthTech, Biotech, Genomics, EdTech, Telemedicine |
| Semiconductors & Electronics | Semiconductors, 3D-Printing, Electronics, Smart Devices |
| Green & AgriTech | Green Energy, Agri-Tech, Sustainable Energy |
| ICTS & IT/ITeS | IT and ITeS, Converging Technologies, E-commerce, Creative Industries |
| Fee Type | ZD/Co-ZD Application Fee | ZD/Co-ZD License Fee | ZE Application Fee | ZE Annual Fee |
|---|---|---|---|---|
| Application Fee (one-time) | PKR 2,200,000 | — | Per STZA notification | — |
| License Fee (one-time) | — | Per schedule | As notified | — |
| Annual Fee | — | PKR 0.28/sq.ft/month of allocatable area (revised) | As notified | Due within 120 days of FY end |
| Amendment Fee | Per STZA notification | |||
| Late Payment | 2% per month on overdue balance | |||
| Zone | Location | Status | Note |
|---|---|---|---|
| NASTP Silicon | Near PAF Base Faisal, Main Shahra-e-Faisal, Karachi | Notified | Previously "NASTP Sierra" — name changed Dec 16, 2024 |
| Maritime Tech Park | TBA | Expansion notification issued | New zone under development |
Zone Enterprises in STZA zones enjoy significant tax incentives: