What Should Be Taken in Consideration When Conducting Business in Pakistan?
Before undertaking business in Pakistan, it is important to understand the country’s laws and culture. For example, there are many restrictions regarding the transfer and holding of foreign exchange. This is an advantage for exporters, who need to be sure that their goods are legal for export. For those conducting business in Pakistan, there are no import/export restrictions on capital, profits, or dividends. In addition, there are no export/import taxes in the country.
Although the business climate in Pakistan has improved in recent years, it is still not completely free of corruption. According to the Global Competitiveness Report, about 40% of companies in Pakistan state that corruption is their greatest concern. In the same report, inefficient government bureaucracies and poor infrastructure were ranked the top two most problematic factors. The power sector, police, and tax authorities are among the most corrupt public bodies. They demand bribes and issue bogus fines to settle disputes.
If you are working with a Pakistani client, it is important to understand the culture and etiquette of the country. For example, you should avoid eye contact with employees who are more senior than you. You should not make eye contact with a Pakistani and make eye contact with them only if you are confident with their level of education. Similarly, you should never address someone higher than you.
The security situation in Pakistan has significantly improved. According to the annual survey conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI), foreign investors in Pakistan are more confident than ever before. The launch of commercial operations in Pakistan by international airlines has been a clear indicator of this. As an investor, you should also consider the attractive incentives that the government offers foreign businesses to invest in the country. In addition to tax breaks, the government allows companies to remit royalties, technology, and franchise fees.
In addition to the tax laws, you should also consider the government’s economic policies. In Pakistan, the government is focusing on implementing a Trade-Related Investment Policy Framework, which will direct investment into export-oriented production. The strategic location, natural resources, and human resource base of the country will allow you to make the most of the opportunities offered by the country. If you’re planning to invest in Pakistan, the government is a good place to start.
One of the major disadvantages of conducting business in Pakistan is the lack of property rights. There are few protections for property rights and disputes relating to foreign assets. Moreover, the legal system in Pakistan is not well-developed and may be subject to political interference. Therefore, it is important to avoid entering into any contract in the country if you can. Nevertheless, Pakistan has several advantages for doing business. The political stability in Pakistan is likely to continue to increase and the judicial system will be better equipped to protect your interests.
The legal system in Pakistan is ill-suited for international business. While the country’s judicial system has improved in terms of the protection of intellectual property, the economic climate is still not yet perfect. For example, book piracy and weak trademark enforcement remain substantial problems. Moreover, there are weak standards of privacy in Pakistan. While the legal system is developing in Pakistan, it is still not a good place to conduct your business.
The country is a fast-developing country. In fact, it is one of the “Next Eleven” countries that have a high potential to become the largest economy in the 21st century. There are several aspects of doing business in Pakistan that should be considered. However, these concerns must be balanced with the country’s economic growth. The country’s macroeconomic stability is the most significant issue.