Special

Economic
Zones
TABLE OF CONTENTS
Introduction 3-4
History Of SEZs 5-6
Types Of SEZs 7-8
Key Characteristics 9-10
SEZ Journey Of Pakistan till 2021 11
SEZs Created In Pakistan 12-13
Korangi Creek Industrial Park SEZ 14-15
Naushahro Feroze Industrial Park (NFIP
) 16-17
National Science And Technology Park (
NSTP) Islamabad
18-19
International SEZs
20-21
SEZ Act 2012
22-23
Criteria Of Special Economic Zones
According To Rules 2013
24-26
Conclusion
27
References
28-29
 Introduction
• A special economic zone is an area in a
country that is subject to different
economic regulations than
other regions within the same country.

• The economic rules in special

economic zones (SEZs) are designed to
encourage and attract foreign direct
investment.

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 Introduction
• Special economic zones are typically
created in order to facilitate rapid
economic growth by leveraging tax
incentives to attract foreign investment
and spark technological advancement.

• While many countries have set up special

economic zones. China has been the most
successful in using SEZs to attract foreign
capital.

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HISTORY OF SEZs
• The first SEZs appeared in the late 1950s in
industrialized countries. They were designed
to attract foreign investment from
multinational corporations. The first was at
Shannon Airport in Clare, Ireland.

• In the 1970s, SEZs were also established in

Latin American and East Asian countries.
The most successful SEZs to date have
been in China.

• There were more than 7,000 SEZs as of

2022, according to the United Nations
Conference on Trade and Development.

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HISTORY OF SEZs

• They are found in every part of the world—

notably in developing and transitional
economies that use them as a tool for
industrialization.

• BU Global Development Policy Center. "The

Political Economy of Special Economic
Zones: The Cases of Ethiopia and Vietnam."

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 Types of SEZs
• Free-Trade Zone: Free-trade
zones are specially secured areas that
are designated for the processing of
imported and exported goods. These
areas involve special customs
procedures and duty-free treatment.

• Export Processing
Zone: These zones are generally
meant for commercial and industrial
exports. The goal is to encourage
economic growth through foreign
investment.
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 Types of SEZs
• Industrial Park: As the name
suggests, industrial areas or parks
are designed to be used for industrial
instead of commercial or residential
purposes. Tax-related incentives are
common benefits for these special
zones.

• Specialized Zone: Some of the

most common uses for these areas
include technology hubs, airport-
based zones, and logistics parks.

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 Key
Characterstics
• Special economic zones are
designed to create and
boost economic growth.

• One of their main goals is to

capitalize on foreign direct
investment.

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 Key
Characterstics
• SEZs are specially
designated areas that are
clearly defined with physical
barriers and management is
done by a single authority.

• Users and investors within

SEZs can take advantage of
certain benefits, including
favorable regulations and
taxation.
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 SEZ Journey Of Pakistan till 2021
Provision of utilities by
Federal Government
6 new SEZ approved
Amendments in the SEZ
including Rashakai SEZ the SEZ Zone Enterprise
Act made to bring SEZs in the
first CPEC SEZ Admission and Sale , lease
customs territory of Pakitan
Reconstitution of SEZ and sub lease of Plot
4 SEZ established
Committees to accelerate Regulations 2021
9 CPEC SEZs agreed under
SEX Act 2012 passed colonization SEZ MIS Module launched
Phase II of CPEC

SEZ Ordinance 2015 Service sector included in 8 new SEZs approved

3 SEZs estabished the scope of SEZ Act 2012 Revision of SEZ Incentive
Package
Development Agreement
of Rashakai SEZ signed
Sole Enterprise SEZ
Regulations 2020
2 Sole Enterprise SEZs
established
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 SPECIAL ECONOMC ZONE CREATED ACROSS PAKISTAN
YEAR NAME OF SPECIAL ECONOMIC ZONE DEVELOPER AREA
FY 2014 Bin Qasim industrial park (BQIP), Karachi, Sindh NIPSs 930
Khairpur Special Economic Zoe(KSEZ), Khairpur, Sindh SEZMC 140
Korangi Creek Industrial Park (KCIP), Karachi, Sindh NIP 220
FY 2016 Hattar special economic zone (HSEZ), Haripur, KP KPEZDMC 440
M3 Industrial City (M3IC), Faisalabad, Punjab FIEDMC 4356
Value Addition City (VAC), Faisalabad, Punjab FIEDMC 214
FY 2019 Oil Village SEZ (OVSEZ), Rawalpindi, Punjab FOC-1 105
Rachna Industrial Park (RIP),Sheikhupura, Punjab NIP 210
Rahimyar Khan Industrial Estate (RIE), Rahim Yar PIEDMC 456
Khan, Punjab
Rashakai Special Economic Zone (RSEZ), Nowshera, KPEZDMC 1000
KP
Vehari Industrial Estate (VIE), Vehari, Punjab PIEDMC 277
Bhalwal Industrial Estate (BIE), Sarghoda, Punjab PIEDMC 427
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 SPECIAL ECONOMC ZONE CREATED ACROSS PAKISTAN

YEAR NAME OF SPECIAL ECONOMIC ZONE DEVELOPER AREA

Bhalwal Industrial Estate (BIE), Sarghoda, Punjab PIEDMC 427

Bostan Special Economic Zone (BSEZ), Pishin, Balochistan Industries Depart. Bal. 200

Hub Special Economic Zone (HUBSEZ), Lasbela, Balochistan LIEDA 406

Naushahro Feroz Industrial Park (NFIP), Naushahro Feroze, Sindh NIP 80

FY 2021 Alllama Iqbal Industrial City (AIIC), Faisalabad, Punjab FIEDMC 2800

National Science and Technology Park (NSTP), Islamabad, ICT NUST 58

JW-SEZ China-Pakistan SEZ (JWSEZ), Lahore, Punjab JWSEZ Group 231

Quaid-e-Azam, Business Park (QABP), Sheikhupura, Punjab PIEDMC 1536

Service Long March Tyres SESEZ, Jamshoro, Sindh SLM 50

Siddiqsons Tinplate SESEZ, Lasbela, Balochistan STPL 71

TOTAL 21 14212

Source: Board of Investment

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 Korangi Creek Industrial Park-
Special Economic Zone (SEZ)
• Korangi Creek Industrial Park (KCIP) is a
Developed & Operational SEZ
established over an area of 250 Acres
in District Korangi, Karachi
• KCIP was given the SEZ Status in 2015
and is among the very first SEZs in
Pakistan
• It has a homogenous representation of
Small to Medium Enterprises from
several industrial segments, incl.
Pharma, Textile, Packaged Food,
Confectionery, Light Engineering,
Packaging etc.
• Eligible Zone Enterprise can avail 10
Year Income Tax Holiday & One-time
Import Duty Exemption as envisaged in
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 Korangi Creek Industrial Park-
Special Economic Zone (SEZ)
Industrial Clusters:
• Low Density Zone: Light Engineering,
Food Processing, Consumer Food &
Pharmaceutical Products, Garments /
Value added Textiles, Packaging &
Printing & Warehousing/Logistics
• High Density Zone: Commercial and
Business Centers, Information
Technology, Gems & Jewelry

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 Naushahro Feroze Industrial
Park (NFIP)
• Naushahro Feroze Industrial Park (NFIP)
is one of the projects of NIP which has
the status of a Special Economic Zone
under SEZ Act 2012.
• The purpose of the development of
NFIP is to provide a platform for
organized and systematic industrial
growth in the area and to excel the
agro-based industrialization in the
province of Sindh.
• The proposed project shall generate
employment opportunities for the
youth and benefit the area in the value
addition of agricultural production.

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 Naushahro Feroze Industrial
Park (NFIP)
• The Nausharo Feroz Indsutrial Park
(NFIP) is located on N-5 National
Highway between Moro City &
Naushahro Feroze city in Naushahro
Feroze District, NFIP is spread over 80
Acres of land.
• The proposed project area activities will
be carried out proposed project site
which is located in Deh Wagan, Taluka
and District Naushahro Feroze.
• The proposed land is affected from
salinity & fertile land, interspersed with
interlunar flats "pat", are the dominant
topographic feature of the project area.

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 National Science and
Technology Park (NSTP),
Islamabad, ICT
• Inaugurated in December 2019, NSTP is
Pakistan’s first Science and Technology Park,
located in the heart of Islamabad in close
proximity to universities, research
institutions, four major industrial hubs,
business centres, and airport.
• Approximately 35% national research work is
conducted within a 30-mile radius of the
park’s premises.
• With over 110,000 square feet of office
space, state-of-the-art IT services, highly
qualified faculty members, talented students
and graduates, access to 330+ labs and
international partners, NSTP is a supportive
location for hi-tech startupsand other
businesses to flourish and gain competitive
advantage.
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 National Science and
Technology Park (NSTP),
Islamabad, ICT
• National Science & Technology Park (NSTP) is
the first fully integrated science and
technology park (STP) and the first STP of the
country; the initiative is meticulously aimed
at kindling the knowledge economy of
Pakistan by stimulating and nurturing
innovation-led growth of hi-tech entities.
• With over PKR 8 Billion being invested into
the master plan, NSTP will emerge as an
innovation powerhouse for businesses.
• NSTP is the new national tech-pad where
entrepreneurs and multinationals come
together to discover, ideate, create,
collaborate and break new ground.

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 International Examples
of SEZs
• While many countries have set up
SEZs, China has been the most
successful in using SEZs to attract
foreign capital. The first four SEZs in
China were created in 1979 in the
Southeastern coastal region: Shenzhen,
Zhuhai, and Shantou in Guangdong
province, and Xiamen in Fujian
province.

• China added Hainan Island to its list of

SEZs in 1983.The success of the
original SEZs prompted the
government to create 14 open coastal
cities in 1984.

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 International Examples
of SEZs
• Within China, the SEZs essentially act
as liberal economic environments that
promote innovation and advancement.
The Chinese government continues to
allow these areas to offer tax incentives
to foreign investors as a way of further
developing the infrastructure of these
regions.

• Without the SEZs, China may not have

been able to successfully implement
the same level of national reform.

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 SEZs Act 2012
The Government of Pakistan adopted
the concept of SEZ with the Special
Economic Zones Act 2012 , to meet
the challenges of global
competitiveness and to create
industrial clusters in the economy.

The Act envisages SEZs to

encourage domestic and
international investors for promotion
and establishment of industrial
infrastructures focusing on export
promotion, import substitution,
transfer of technology, and
employment generation.

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 SEZs Act 2012
Section 4 of the Act allows the
Federal Government and Provincial
Governments to establish SEZs on
their own or in collaboration with
private parties under various modes
of collaboration including Public-
Private Partnership or exclusively
through private parties.

Whereas to incentivize such

investment in the SEZs, the said Act
provides certain fiscal and allied
benefits to the SEZ investors, i.e.,
developers and zone enterprises.

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 Criteria of Special Economic Zones
According to Rules 2013

1. SEZ shall have a minimum size of at least fifty

acres;
2. The SEZ, upon development, shall generate
economic activity in terms of exports, employment
and other performance indicators at least equal or
more than total overall capital cost incurred over a
period of 15 years.
3. SEZ will provide import substitution and generate
direct and indirect exports.
4. SEZ will not target any industry or product which
is being banned in the world.
5. SEZ will not target any industry material/input of
which is being protected by other countries in the
larger national interest
6. The respective Federal and Provincial
Governments have committed corresponding
resource on the time line to materialize the SEZ
under consideration.
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 Criteria of Special Economic Zones
According to Rules 2013

7. Zone Application shall be in conformity with the

provisions of the Act, any applicable regulations
issued under the Act and other applicable provisions
of law.
8. 70% of the SEZ land area will be used for
purpose of operations of zone enterprises.
9. Developer will be obliged to undertake to comply
with all the environmental, labor and other
applicable legislation in force in Pakistan.
10. Developer will be obliged to undertake to take
all necessary approvals to start construction
activities within six months of signing of
development agreement.
11. Developer to be engaged for the particular SEZ
shall be a body incorporated under the laws of
Pakistan.
12. Articles of Association of the developer shall be
approved by the Provincial/Capital SEZ Authority
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 Criteria of Special Economic Zones
According to Rules 2013

13. Developer shall ensure that the zone

enterprises start construction of facilities within six
months and assume regular production within
twenty four months after receipt of all required
licenses and permits.
14. Developer will be obliged to undertake that title
of land shall only be registered in the name of zone
enterprises after they have performed business
operations in the SEZ concerned for at least six
months;
15. There shall be no real estate activities in the
zone.

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 Conclusion
Special Economic Zones (SEZs) play a pivotal role in driving economic
growth and development globally by providing favorable business
environments with reduced regulations and tax incentives. These
zones attract foreign investment, boost employment, and promote
industrial diversification, which can significantly enhance a nation's
economic landscape. For instance, China's implementation of SEZs in
cities like Shenzhen has transformed these regions into economic
powerhouses, facilitating innovation and manufacturing growth while
contributing significantly to the national economy. SEZs thus represent
strategic tools for countries aiming to stimulate economic reform,
enhance global trade connections, and foster sustainable development​
.

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 Refrences
1. "Special Economic Zone (SEZ)." Investopedia:
https://www.investopedia.com/terms/s/sez.asp

2. "Special Economic Zones in China." MS Advisory:

https://msadvisory.com/special-economic-zones-china

3. Finance Department, Government of Pakistan. "Special Economic Zones.”:

https://www.finance.gov.pk/survey/chapters_21/Annex%20III%20SEZones.pdf

4. Pakistan Industrial Development Corporation. "Korangi Creek Industrial Park." PIDC.

https://pidc.com.pk/korangi-creek-industrial-park/.

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 Refrences
5. Sindh Economic Zones Management Company. "Korangi Creek Industrial Park." SEZMC.
https://sezmc.gos.pk/korangi-creek-industrial-park/.

6. Sindh Environmental Protection Agency. "Environmental Impact Assessment - NFIP." Government

of Sindh, December 19, 2022.
https://epa.sindh.gov.pk/files/EPA-Sindh/EIA-IEE/EIA-%20NFIP%2019-12-22.pdf.
Here are the references for the requested websites:

7. International Association of Science Parks and Areas of Innovation (IASP). "National Science and
Technology Park (NSTP)."
https://www.iasp.ws/our-members/directory/@6166/national-science-and-technology-park--nstp-

8. LinkedIn. "National Science and Technology Park (NSTP) - About."

https://www.linkedin.com/company/nstpofficial/about/

9. Board of Investment, Government of Pakistan. "Special Economic Zones Rules." January 2019.
https://invest.gov.pk/sites/default/files/2019-01/SEZ_RULES.pdf.

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