Pakistan Export Processing Zone Incentives

Program Overview

Pakistan's Export Processing Zones Authority (EPZA), established under the Export Processing Zones Authority Ordinance 1980, administers special economic zones offering comprehensive tax and customs incentives for export-oriented manufacturers. Zone enterprises receive 10-year income tax exemption from license issuance, complete customs duty and sales tax exemption on all imports and exports, duty-free machinery and equipment imports, and developed land on competitive 30-year terms. EPZs provide streamlined customs procedures and dedicated infrastructure for manufacturing operations.

Tax and Customs Benefits

Zone enterprises enjoy complete income tax exemption for ten years from EPZA license issuance, significantly reducing operational costs during establishment and growth phases. All goods imported into EPZs are exempt from customs duties and sales tax, enabling cost-effective sourcing of machinery, equipment, raw materials, and components. Exports from EPZs similarly face no customs duties or sales tax, maximizing competitiveness in international markets. These combined exemptions create substantial cost advantages for manufacturers producing for export markets.

Land and Infrastructure

EPZA provides developed land plots with ready infrastructure on competitive lease rates for 30-year terms, eliminating land development costs and timeline delays. Zones offer reliable utilities including electricity, water, telecommunications, and waste management. Streamlined customs and administrative procedures reduce regulatory burden. Dedicated zone management handles permits, inspections, and compliance, allowing enterprises to focus on manufacturing operations. This comprehensive infrastructure package accelerates business establishment and operational efficiency.

Eligibility Requirements

EPZ incentives apply to manufacturing enterprises committed to export-oriented production. Businesses must establish operations within designated EPZ locations and obtain EPZA licenses. While primarily focused on exports, EPZs allow limited domestic market sales of defective goods or waste (maximum 3% of total value) after payment of applicable duties and taxes. Obsolete or old machinery can be sold domestically after duty payment, providing flexibility for equipment upgrades. Both domestic and foreign investors qualify for EPZ establishment.

Application Process

Contact EPZA at epza.gov.pk to explore available zones and plots. Submit project proposals including manufacturing plans, investment amounts, export projections, employment creation, and infrastructure requirements. EPZA evaluates proposals based on export potential, investment size, job creation, and technology transfer. Approved enterprises receive licenses enabling access to all zone benefits. EPZA assists throughout establishment with land allocation, construction approvals, customs clearances, and operational support. The authority maintains ongoing coordination with zone enterprises to ensure smooth operations.