Special Economic Zones Act, 2012

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THE SPECIAL ECONOMIC ZONES ACT, 2012 
 
 
 
 
 
CONTENTS 
 
1. Short title, extent and commencement 
2. Act to override other laws 
3. Definitions 
4. Establishment of special economic zones 
5. Board of Approvals 
6. Functions and responsibilities of the BOA 
7. Approvals Committee 
8. Functions of BOI 
9. Responsibilities of Provincial investment promotion authorities 
10. SEZ Authority 
11. Requirements for all zone applications 
12. Approval of zone applications 
13. Approval of development agreements 
14. Simultaneous approval of zone application and development agreement 
15. Approval of existing zones 
16. Zone approval criteria 
17. Functions and powers of SEZ Authorities 
18. Suspension and removal of members of SEZ Authorities 
19. Eligibility as developer 
20. Responsibilities of developers 
21. Development agreements 
22. Sanctions against developers 
23. SEZ committees 
24. Admission of zone enterprises 
25. Sanctions against zone enterprises 

 
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26. Land regime 
27. Public utilities and transportation links 
28. Applicable operating administrative procedures 
29. Assistance by the BOI and SEZ Authorities 
30. Labour laws 
31. Employment of key persons 
32. Security 
33. Omitted 
34. Incentives for SEZs 
35. Protection of benefits 
36. Benefits for developers 
37. Benefits for zone enterprises 
38. Establishment of Special Economic Zone Appellate Tribunal 
39. Alternative dispute resolution procedures 
40. Rules and regulations for implementation of this Act
 
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THE SPECIAL ECONOMIC ZONES ACT, 2012 
ACT No. XX OF 2012 
 
[12th August, 2012] 
 
An Act to provide for setting up and operation of special economic zones in Pakistan 
 
WHEREAS it is necessary and expedient to promulgate a law for the creation, development and  
efficient operation of special economic zones through provision of a legal and regulatory frame work             
to encourage domestic and international investors for promotion and establishment of industrial  
infrastructure and for other matters connected or ancillary thereto; 
 
It is hereby enacted as follows:― 
 
1. Short title, extent and commencement.—(1) This Act may be called the Special Economic 
Zones Act, 2012. 
 
(2) It extends to the whole of Pakistan. 
 
(3) It shall come into force on such date as the Federal Government may, by notification in the 
official Gazette, appoint and different dates may be appointed for coming into effect of different  
provisions of this Act and any reference to commencement shall generally refer to the commencement 
of this Act but commencement of any provision that comes i nto force subsequent to the general  
commencement shall be treated from the date of coming into force of the respective provision and not 
the general commencement. 
2. Act to override other laws.― The provisions of this Act shall have force notwithstanding 
anything to the contrary contained in any other law for the time being in force. 
3. Definitions.―In this Act, unless there is anything repugnant in the subject or context,— 
 
(a) “Approvals Committee” means the committee constituted under section 7; 
(b) “arbitration” shall include arbitration under the applicable laws of Pakistan as  
well as arbitration under any applicable international regime, whether selected  
contractually through an agreement in writing or available to a party or parties  
as a result of an international agreement accorded or ratified; 
(c) “BOA” means the Board of Approvals constituted under section 5; 
(d) “BOI” means the Board of Investment established under the Board of 
Investment Ordinance, 2001 (XV of 2001) ; 
(e) “capital equipment” means plant, machinery or equipment, accessories, and  
component part of machinery and equipment identifiable for use in or with  
machinery required for economic activities and machinery includes machinery  
and equipment of any description, such  as is used in industrial process, 
manufacture, production or processing of other goods  and rendering services,  
except the goods that are consumed in the manufacturing, production of 
processing of goods or provision of services; 
 
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(f) “developer” means an enterprise which has entered into a development 
agreement with a SEZ Authority; 
 
(g) “development agreement” means a duly approved agreement between SEZ  
authorities and agreed  to and endorsed by the BOA and a developer that 
authorises a developer to develop, establish and operate a SEZ; 
 
(h) “economic zone” means a geographically defined and delimited area which has 
been notified and approved for economic, industrial and commercial activities; 
 
(i) “existing zones” means the export processing zones, industrial zones and other 
similar entities in existence at the time of the commencement of this Act and  
includes but not limited to the following, namely:― 
 
(i) “export processing zones” means and economic zone which is 
established under the Export Processing Zones Authority Ordinance,  
1980 (IV of 1980); 
 
(ii) “extra­territorial zone” means an economic zone of a type that is to be  
deemed to be outside the customs territory of Pakistan; 
(iii) “free trade zone” means an economic zone that shall be deemed to be  
outside the customs territory of Pakistan with respect to which the BOA 
shall approve special facilities for trade, transshipment and re -export 
operations in accordance with applicable legislation as for the time being 
in force in Pakistan; 
(iv) “hybrid export processing zone” means an economic zone that shall be  
deemed to be outside the customs territory of Pakistan in which goods  
are manufactured and from which services are provided, both for 
exportation to countries other than Pakistan as well for export into  
Pakistan; 
(v) “multilateral economic zone” means an economic zone in which all zone 
enterprises are required to be beneficially owned by national, residents  
or corporate entities of one or more particular countries; 
 
(vi) “reconstruction opportunity zone” means an economic zone from which 
the exports of goods and services has been recognized by any country  
or jurisdiction other than Pakistan as being eligible for reduced tariff  
duties and other benefits; 
(vii) “regional development zone” means an economic zone wherein 
economic activates are promoted so as to develop particular regions and 
industries; and 
(viii) “sector development zone” means a regional development zone in 
which permissible economic activity shall be limited to one or more  
sectors as notified by the BOA; 
 
(j) “misconduct” means any conduct of a member or Chairperson of the Provincial 
 
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SEZ Authority that is prejudicial to the good order and management of the SEZ 
Authority or a SEZ and includes but not limited to the following, namely :― 
 
(i) a failure to disclose an interest of the member or Chairperson in a transaction 
related to a SEZ or an interest of the member’s parent, spouse, brother, sister, 
child, or spouse of a parent, brother, sister or child; 
 
(ii) any act or omission which is ultra vires of this Act; 
 
(iii) any act or omission which lacks good faith; or 
 
(iv) any act or omission which is inconsistent with the fiduciary duties of such  
member or Chairperson; 
 
(k) “Provincial investment promotion authority” means an investment promotion 
agency, by whatever name called, formed by a Province to work as focal authority  
to promote domestic and foreign investment in that Province such as Sindh Board  
of Investment established in Sindh and Punjab Board of Investment and Trade or  
any other similar entity; 
 
1[(l)  SEZ Authori ty means the Federal or, as  the case may be , a Provincial SEZ  
Authority established under section l0;] 
 
(m) “SEZ Committee” means the authority chartered by the BOA at each SEZ under  
Section 23; 
 
2[(n) “Special Economic Zone” or “(SEZ)” means a geographically defined and delimited 
area which has been approved and notified by the BOA;] 
 
(o) “zone admission criteria” means the criteria under this Act and to be applied by  
developers in deciding whether or not to admit an enterprise into a particular SEZ  
including thereof zone approval criteria that means the criteria to be applied by the  
SEZ Authority  and the BOA in  deciding whet her to allow or  not to allow a  
particular area to be developed as a SEZ; 
 
(p) “zone application” means an application submitted in accordance with the 
provisions of this Act by an SEZ Authority seeking the notification of an area as a  
special economic zone; 
 
(q) “zone development plan” means a business plan for developing a SEZ; 
 
(r) “zone enterprise” means an enterprise admitted into a SEZ by a developer; and 
 
(s) “zone regulations” mean regulations made under this Act. 
 
 
 
 
1Subs. by Act No. XXXIV of 2026, s. 2. 
2Subs. by Act No. XLV of 2016, s. 2. 
 
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4. Establishment of special economic zones .― The Federal Government and Provincial  
Governments may establish special economic zones by themselves or in collaboration with private  
parties under various mode s of  collaboration including public -private partnership or exclusively  
through the private parties as provided under this Act. 
 
5. Board of Approvals .—(1) There shall be a Board of Approvals, hereinafter called BOA,  
consisting of— 
 
(i) the Prime Minister of Pakistan who shall be the Chairperson of the BOA; 
 
(ii) the Minister for Finance who shall be the Vice Chairperson of BOA; 
 
(iii) the Minister for Industries; 
 
(iv) the Minister for Production; 
 
(v) the Minister for Commerce; 
 
(vi) the Minister for States and Frontier Regions Division; 
 
(vii) two members of Majlis -e-Shoora (Parliament) to be nominated by the Prime  
Minister (one from each House); 
 
(viii) the Chairman of the BOI; 
 
(ix) the Deputy Chairman Planning Commission; 
 
(x) the Chief Minister of each Province; 
 
(xi) the Chairman of the Federal Board of Revenue; 
 
(xii) Governor, State Bank of Pakistan; 
 
(xiii) Secretary BOI; 
 
(xiv) executive heads of the Provincial investment boards by whatever names known 
or if no  such board is  established a nominee of the  Government of such  
Province, having adequate relevant professional experience, the tenure of such 
nominees shall be three years; 
 
(xv) the President of the Federation of the Pakistan Chambers of Commerce and  
Industry; 
 
(xvi) the President of the Pakistan Business Council; 
 
(xvii) the President of the Overseas Chamber of Commerce and Industry; and 
 
(xviii) a professional having relevant adequate experience to be nominated by the  
Prime Minister of Pakistan. 
 
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(2) The meeting of the BOA shall be convened on the orders of the Chairman BOA or on the 
recommendations of BOI or 1[a] SEZ Authority. 
(3) The BOA shall meet as frequently as required but not less than twice a year. 
(4) Fifty percent of the members shall constitute quorum of the BOA. 
(5) Where the Chairperson is not present, the Vice-chairperson shall chair the BOA’s meeting 
and if both are not available, a member designated by the Chairperson shall preside. 
(6) The decisions of the BOA shall be taken by majority of the total membership present and 
voting. 
(7) The BOA shall adopt its own rules of procedure. 
(8) Secretary BOI shall also act as Secretary of the BOA. 
6. Functions and responsibilities of the BOA.― The BOA may— 
(a) approve such regulations for the implementation of this Act as are applicable to 
all SEZs or to a particular group of SEZ or a particular SEZ; 
(b) approve or reject zone applications; 
(c) approve or reject development agreements; 
(d) examine and decide upon policy issues submitted to it by SEZ Authorities or by 
developers; 
(e) co-opt on the members of the Approvals Committee as necessary; 
(f) notify with approval of relevant authorities additional benefits under sub-
section (2) of section 34; 
(g) cancel development agreement; 
(h) review and direct actions on annual reports submitted by SEZ Authorities; 
(i) annually review the implementation of this Act with a view to improving  
policies relating to SEZs; and 
(j) take any other steps it deems appropriate in order to advance the objectives of  
this Act. 
7. Approvals Committee.—(1) There shall be an Approvals Committee that shall be chaired by the 
Chairman of the BOI and shall consist of the following, namely:― 
(i) executive heads of the Provincial investment boards or companies or agencies,  
and where these do not exist a representative equivalent to a Provincial 
Secretary designated by the concerned Province; 
 
 
___________________________________________________________________________________ 
1Subs. by Act No. XXXIV of 2026, s. 3. 
 
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(ii) representatives of the Ministries of Finance, Commerce, Industries, Production 
and States and Frontier Regions Division not below the level of an Additional  
Secretary to the Government; 
 
(iii) private sector representatives representing different sectors and regions to be  
notified and two co-opted members by special invitation with a three-year term 
extendable at the discretion of the BOA; and 
 
(iv) with approval of BOA, co-opted members from concerned Federal and 
Provincial Governments for specific cases. 
 
(2) The Approvals Committee shall exercise all such powers and responsibilities as are 
delegated to it by the BOA, subject to such conditions as it may deem fit. 
 
(3) The BOA may delegate all or any of its remaining powers and responsibilities to the 
Approvals Committee. 
 
(4) A decision taken by the Approvals Committee shall be submitted to BOA at its meetings or 
by circulation for approval. 
 
(5) The BOA may, at any time, exercise any responsibility or any power which it has delegated 
to the Approvals Committee. 
 
 
shall— 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8. Functions of BOI.—(1) The BOI as the Secretariat of BOA and Approvals Committee 
 
(a) be responsible for the co-ordination of all activities pertaining to SEZs, 
developers and zone enterprises, including the preparation of all documentation 
for consideration by the BOA and  for ensuring the  implementation of all  
decisions of the BOA; 
 
(b) process all zone applications submitted by SEZ Authorities for consideration of 
BOA; 
 
(c) process all applications for additional incentives in accordance with sub section 
(2) of section 34; 
 
(d) review all development agreements proposed by SEZ Authorities; 
 
(e) be responsible for the international and domestic promotion of investments into 
SEZs; and 
(f) facilitate the interaction of developers and zone enterprises  with all other 
Federal, Provincial and other governmental authorities as well as with 
international financial and developmental institutions. 
 
(2) 1[ *  *  *  *  *  *  *] 
(3) BOI shall support and facilitate the SEZ Authorities, if requested. 
 
1Omitted by Act No. XXXIV of 2026, s. 4. 
 
 
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9. Responsibilities of Provincial investment promotion authorities .— 1[*] A Provincial  
investment promotion authority shall be responsible within its Province of jurisdiction for the  
following, namely:― 
(a) to assist in the operation of the 1[*] SEZ Authorities; 
(b) to be the focal entity responsible for the investment promotion; 
(c) may assist the SEZ Authorities and the developers in acquisition and other land 
related matters including but not limited to necessary easement issues; 
(d) to ensure infrastructure development linkages between authorities within the  
SEZ; and outside the SEZ; 
(e) to facilitate the developers and zone enterprises in dealing with all Provincial  
governmental authorities for smooth and systematic resolution of issues as and 
when they arise; and 
(f) to facilitate the developers and enterprises in complying with environmental  
regimes and social development. 
10. SEZ Authority.—(1) There shall be established for each Province, an authority to be 
known as the SEZ Authority of that Province. 1[The Federal Government shall, by notification in the 
official Gazette, establish a Federal SEZ Authority for the Islamabad Capital Territory and SEZs 
established by the Federal Government. The Federal SEZ Authority shall only oversee the relevant 
SEZ to be established by the Federal Government on land held in the name of the Government of 
Pakistan or established on provincial land after consent of the respective provincial government.] 
(2) Every SEZ Authority shall be a body corporate by the name aforesaid, having perpetual  
succession and a common seal, with a power, subject to the provisions of this Act and any regulations, 
to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by  
the said name, be entitled to sue and to be sued. 
(3) Each 1[Provincial] SEZ Authority shall consist of— 
(a) a Chairperson, who shall be the Chief Minister of the concerned Province or a  
person appointed by the Chief Minister; 
(b) a Vice-Chairperson, who may be the Minister or the Advisor in charge of the  
investment department and where no such department exists, any member of  
the Provincial cabinet nominated by the Chief Minister of the concerned 
Province; 
(c) a Chief Executive Officer who may be appointed by the Chief Minister of the  
Province concerned and may be the Secretary of the SEZ Authority; 
(d) Secretary of the Provincial investment department and where no such 
department exists, the executive head of the Provincial investment promotion  
authority by whatever name it exists; 
 
1Omitted, added and ins. by Act No. XXXIV of 2026, ss.5 and 6. 
 
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(e) Secretaries of the Provincial industries, finance, commerce, investment, works  
and services, livestock, agriculture and planning and development departments; 
(f) two members to be appointed by the Chief Minister of the Province concerned  
and two other members to be appointed by the BOA; and 
(g) a member to be appointed  by the concerned Chamber of Commerce and 
Industry where the SEZ is proposed. If there is no Chamber of Commerce then 
a member of the Chamber of Commerce of  that respective  area to be 
appointed. 
1[(3A) The Federal SEZ Authority shall consist of,__ 
(a)  A Chairperson, who may be the M inister in char ge Chairman of the  Board of 
Investment; 
(b)  Secretary, Board of Investment, (who shall chair the Federal SEZ Authority in 
absence of the Chairperson), act as Vice President; 
(c)  A Chief Executive Officer who ma y be appo inted by the Prime  Minister and 
shall be the Secretary of the Federal SEZ Authority; 
(d)  Federal Secretaries of Industries & Production, Planning Development and 
Special Initiatives, Commerce, Finance (Ma in), Inter Provincial  Coordination, 
Power, Energy or their nominee not below BPS-21; 
(e)  Two (2) private member s to be appointed by the Federal  Government on such 
terms and condition s as it may dete rmine. The member s shall be of kno wn 
integrity and competence with at least ten year of experience in the field of law, 
economics, technology or finance , coupled with experience of the indu strial 
section; 
(f)  President of the Federation of Pakistan Chambers of Comme rce and  Industry 
(FPCCI); and 
(g)  Member of each Province appoin ted by the Ch ief Mini ster of the  respective 
province, wh ich member shall be of kno wn integrity and  competence with at 
least ten years of exper ience in the f ield of law,  economics, technolo gy or 
finance, coupled with experience of the industrial section.] 
(4) Each SEZ Authority may acquire land 1[* * *]  in accordance with the  Land Acquisition 
Act, 1894 (I of 1894). 
(5) Each SEZ Authority shall, subject to the approval of BOA, establish its rules and procedures. 
(6) Where the Chairperson is not present, the Vice Chairperson shall chair the SEZ 
Authority’s meeting. 
 
1Ins. and omitted by Act No. XXXIV of 2026, s.6. 
 
 
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11. Requirements for all zone applications. —(1) Every zone application submitted for  
approval to the BOA shall identify the type of SEZ proposed and include— 
(a) a basic business concept or model for the proposed SEZ to be submitted; 
(b) parameters for zone admission criteria; and 
(c) a preliminary zone development plan which shall— 
(i) define the geographic boundaries of the proposed SEZ; 
(ii) set out the basic infrastructure development requirements, both 
inside and outside the proposed SEZ, necessary for the proper 
functioning of the proposed SEZ; 
(iii) set out the land requirements of the proposed SEZ; 
(iv) set out the manner in which land required shall be procure d, including 
specifically whether land will  need to be acquired under the Land  
Acquisition Act, 1894 (I of 1894); and 
(v) set out what criteria shall be applicable to the admission of zone 
enterprises into that SEZ. 
(2) The zone application shall be submitted along with a proposed development agreement  
under section 14 and the criteria on which a developer shall be selected for that SEZ. 
12. Approval of zone applications.—1[(1) Where a SEZ is proposed to be e stablished by a 
Province, the zone application shall be submitted to the BOA by the SEZ Authority of that Province. Where 
a SEZ is proposed to be established by the Federal Government, the zone application shall be submitted to 
the BOA by the Federal SEZ Authority.] 
(2) The BOA shall review every zone application submitted to it by the SEZ Authority to ensure 
that the proposal is in conformity with the provisions of this Act, any applicable regulations made  
under this Act and other applicable provisions of law. 
13. Approval of development agreements. —(1) If a zone application is approved by the  
BOA, the concerned SEZ Authority shall select 1[one or more  developers] in accordance with any 
applicable zone regulations except as provided in s ection 4. Such zone regulations shall req uire that 
envisaged development agreements be notified for competitive bidding 1[:] 
1[Provided that more than one developer may only be selected where the area of the zone is 
more than one thousand acres and each developer is allotted not less than five hundred acres.] 
 
(2) After negotiating a development agreement, the concerned SEZ Authority shall submit a  
final agreement for approval to the BOA. 
 
 
 
 
1Subs. and added by Act No. XXXIV of 2026, ss.7 and 8. 
 
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(3) There shall be a provisional approval by the concerned SEZ Authority subject to fulfillment 
of all such conditions necessary for final approval according to laid down criteria. 
 
(4) The BOA may condition its approval of a development agreement on the fulfillment of such 
conditions as it deems fit and according to the laid down criteria. 
 
(5) After final approval, the development agreement shall be signed 1[*] by the Secretary of  
the BOA on behalf of the Federation of Pakistan and by the chief executive officer of the concerned 
SEZ Authority 1[and the authorized representative of the Developer]. 
 
(6) If the BOA does not approve a development agreement submitted to it, the concerned SEZ 
Authority, that submitted the development agreement, may resubmit the development agreement after 
either renegotiating the terms of the proposed development agreement with the developer concerned  
or after reaching agreement with a different developer selected in accordance with the applicable zone 
regulations. 
 
(7) In case of an y grievances, a developer may approach BOA directly or through the SEZ  
Authority and BOA shall have the authority to consider, modify or set aside any decision. 
14. Simultaneous approval of zone application and development agreement.― The SEZ 
Authority may simultaneously submit both a zone application and a development agreement to the  
BOA for provisional approval, provided that— 
 
(a) the developer in question either owns all immovable property in the proposed 
SEZ or holds leasehold rights; and 
 
(b) no additional incentives shall be granted by the SEZ Authority under      sub-
section (2) of section 34. 
15. Approval of existing zones. —(1) Any existing zone may apply to the SEZ Auth ority 
1[of the territory or Province] in which it is located for submission of a zone application on its behalf. 
 
2[(2) From the commencement of the Special Economic Zones (Amendment) Ordinance, 2015 
(XVIII of 2015), only new entrants and new industries that are setup after the establishment of the SEZ 
may avail SEZ enterprise benefits under this Act.] 
   (3) 2[* * * * * * *] 
(4) 2[* * * * * * *] 
       (5) 2[* * * * * * *] 
 
16 Zone approval criteria.― (1) 2[* * * * * * *] 
 
2[(1)] unless otherwise decided by the BOA, the following provisions shall form part of the 
zone approval criteria, namely:― 
(a) a SEZ shall have a minimum size of at least fifty acres: 
 
 
1Omitted, subs. and ins. by Act No. XXXIV of 2026, ss.8-9. 
2Subs. omitted and renumbered by Act No. XLV of 2016, s.3 and 4. 
 
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(b) not more than thirty percent of the entire area of a SEZ shall be used for  
amenities (including commercial areas), infrastructure and residential or labour 
colonies; 
 
(c) public-owned land, if used for SEZs shall be leased for a period of 1[up to]  
fifty  years extendable for further period as laid down by the competent forum; 
 
(d) Developers must undertake to comply with all environmental, labour and other 
applicable legislation in force in Pakistan; 
 
(e) zone enterprises must begin construction of facilities within six months and  
assume regular business operations within twenty-four months of their 
approval as zone enterprises and after receipt of all required licences and 
permits; 
 
(f) within six months the developer is bound to take all necessary approvals to start 
construction activities failing which that title will be withdrawn and agreement 
will be terminated and land will be returned; 
 
(g) title to land may be registered in the name of zone enterprises only after they  
have performed business operations in the  SEZ concerned for at  least six 
months; 
(h) there shall be no real estate activities in the zone as this would result in  
withdrawl of the title of land and termination of the agreement; and 
(i) articles of association of the zone developer shall be approved by the 
1[concerned] SEZ Authority in accordance with the regulatory framework 
prescribed by the BOA. 
2[(2)] In case the SEZ Authority is satisfied with the justification put forward for delay in  
performance of a responsibility by an enterprise in a SEZ, it may give reasonable relaxation in time  
frame for performance of the particular responsibility. 
 
 
to,— 
17. Functions and powers of SEZ Authorities.― The SEZ Authority shall be responsible 
 
(a) prepare zone applications in accordance with this Act and applicable zone 
regulations; 
 
(b) select developers in accordance with the provisions of this Act and the 
applicable zone regulations; 
 
(c) negotiate development agreements in accordance with the provisions of this Act 
and applicable zone regulations; 
 
(d) assist developers upon award of a development in acquiring land and accessing 
public utilities in accordance with the zone development plan; 
 
(e) prepare zone regulations for particular SEZ; 
 
 
1Subs. by Act No. XXXIV of 2026, s.10. 
2Renumbered by Act No. XLV of 2016, s.4. 
 
Page 14 of 22 
 
(f) co-ordinate with Federal and Provincial authorities and ensure the building of 
infrastructure outside the boundaries of SEZ; 
 
(g) serve as liaisons and facilitating agencies in accordance with the provisions of 
section 29; 
 
(h) facilitate the availability of public utilities to zone enterprises in accordance 
with the zone development plan; 
 
(i) liaise with all relevant Federal and Provincial authorities to ensure the security  of 
SEZs; 
 
(j) monitor the proper implementation of streamlined administrative procedures in 
SEZs under section 28; 
 
(k) monitor the compliance of developers with zone regulations as well as the  
compliance of developers with their obligations under development agreements  
and suspend development agreements, in case of violation of terms of 
development agreement by the developer, pending final decision by BOA. 
 
(l) monitor the compliance of zone enterprises with their obligations under zone  
regulations; 
 
(m) review of the activities of the developers and zone enterprises  regularly but not 
less than once a year; and 
 
(n) report bi-annually to the BOA with respect to SEZs in the Provinces 1[or territories] 
concerned. 
 
18. Suspension and removal of members of SEZ Authorities.—(1) The Chief Minister may 
order removal of either the Chairperson, if so appointed by him, or any member of the Provincial SEZ 
Authority. 
 
(2) If either the Chairperson or any member of a Provincial SEZ Authority is removed, their  
replacement shall be appointed by the Chief Minister. 
 
19. Eligibility as developer .― Unless otherwise decided by the BOA with respect to a  
particular SEZ or type of SEZ, any entity shall be eligible as a developer which is incorporated under   the 
laws of Pakistan. 
 
20. Responsibilities of developers.—(1) With the exception of existing zones which have been 
approved as SEZs, all SEZs shall be developed and operated by developers within a specified time period 
as mentioned in the development agreement. 
 
(2) All developers shall— 
 
(i) implement their zone development plans in accordance with the terms of their  
development agreement; 
 
(ii) approve zone enterprises and allot land to such enterprises in accordance with  
the applicable zone admission criteria, zone regulations and the terms of the 
____________________________________________________________________________________ 
1Ins. by Act No. XXXIV of 2026, s.11. 
 
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development agreement 1[:] 
1[Provided that notwithstanding anything contained to the contrary, in the case 
of public -private partnerships and Private sector Special Economic Zones, the 
Authority shall examine and approve zone entry applications, allot land to such 
enterprises, and determine the price of the land so allotted in accordance with the terms 
of the concession agreement or, as the case may be, the development agreement.] 
(iii) monitor and ensure the compliance of zone enterprises with all applicable zone 
regulations. 
(3) Subject to default on the foregoing unless otherwise, the agreement shall stand terminated. 
21. Development agreements.—(1) Each development agreement shall include― 
(a) all undertakings of the developer regarding the development and operation of  the 
SEZ concerned, with the zone development plan or business concept of  proposed 
SEZ model as an integral part of the development agreements; and 
(b) all authorities conferred on the developer with respect to the SEZ concerned,  
including specifically any provisions pertaining to the developer’s authority to— 
(i) admit enterprises into the SEZ  in accordance with the zone admission 
criteria and allot land to them in accordance with agreed eligibility  criteria 
and procedures; 
(ii) act as a liaison and facilitating agency between the relevant SEZ  authority 
and zone enterprise; 
(iii) all financial obligations of the developer, including any obligation to  make 
payment for the allocation of land and provision of services by  public 
authorities; and 
(iv) clear provisions regarding the responsibility of maintenance of 
infrastructure and utility services. 
(2) A development agreement shall also include— 
(i) rights, protections and entitlements of the developer with respect to the   SEZ 
concerned, established or allowed under this Act or any other applicable law; 
(ii) rights, protections and entitlements of zone enterprises in the SEZ concerned 
established or allowed under this Act or any other applicable law, together 
with a prescribed procedure for the invocation of such  rights, protections and 
entitlements by the developers; 
(iii) provision for the settlement of disp utes, including disputes on behalf of   zone 
enterprises through arbitrations; and 
(iv) rights or titles and other legal authority of the 1[*] SEZ Authorities superior 
to it in terms of the provisions of this Act. 
1[(3) ln the case of public-private partnerships and private sector Special Economic Zones, the terms of 
the concession agreement executed between the relevant Provincial Author ity or comp any and the Developer 
shall prevail over the terms of the development agreement.] 
_________________________________________________________________________________ 
1Subs., ins. and omitted by Act No. XXXIV of 2026, ss.12 and 13. 
 
Page 16 of 22 
 
22. Sanctions against developers.—(1) The SEZ Authority may, if it is satisfied after notice 
and a hearing that a developer is not acting in accordance with the terms of its development agreement or 
is acting in violation of applicable zone regulations or applicable legislation and has failed to rectify 
such violation despite notice to this effect, suspend the development agreement of that  developer and 
move for cancellation of such agreement to the BOA or impose such other penalty as  may be provided 
under the applicable zone regulations or the development agreement. 
(2) Upon receipt of an application from the 1[concerned] SEZ Authority seeking cancellation 
of a development agreement, the BOA shall give notice to the developer concerned, asking it to show  
cause why its development agreement should not be cancelled or why such lesser penalty as may be  
provided under applicable zone regulations should not be imposed. 
(3) Pending the final decision of the BOA on a proposal for cancellation of a particular  
development agreement, the SEZ Authority may appoint an  interim administrator or take such interim 
measures as it is necessary to do so— 
(a) in the public interest; or 
 
(b) to prevent any of the affairs of any SEZ being conducted in a manner detrimental 
to the interests of stakeholders, zone enterprises or other persons  whose interest 
are likely to be affected or in a manner prejudicial to the interests           of the SEZ. 
(4) Pending the final decision of the BOA, on a proposal for cancellation of a particular  
development agreement, the SEZ Authority may, if it is satisfied that it is necessary to secure the  proper 
management of any zone, issue directions to developers generally or to any developer in  particular to 
carry out such changes as are necessary to rectify the situation and the developers shall  be bound to 
comply with such directions. 
 
(5) Following a hearing in person, in which the developer may be represented by counsel, the  
BOA may impose such penalty as is provided by the applicable zone regulations or the development  
agreement, which may include cancellation of a development agreement or cancellation of any benefits 
allowed to a developer, provided that any cancellation of benefits to a developer shall be without  
prejudice to the rights and privileges of zone enterprises. 
(6) The BOA may only cancel a development agreement if it finds that— 
(i)  the developer has violated its development agreement; and 
(ii) that the developer has failed to rectify such violation despite notice. 
     (7)1[ * * * * * * *] 
 
23. SEZ committees.—(1) The BOA shall charter an SEZ Committee for each SEZ as per the 
applicable zone regulations. 
 
(2) The membership of a SEZ committee shall consist of representatives from the developer, BOI, 
Provincial investment promotion agency, SEZ Authority and concerned district Government. The  
developer shall appoint the chairperson of the committee. 
 
(3) Each SEZ committee shall have responsibilities to administer and enforce SEZ benefits and  rules 
as well as provide  facilitation between the  SEZ, its enterprises  and the government with responsibilities 
including to— 
 
1Subs. and omitted by Act No. XXXIV of 2026, s.14. 
 
Page 17 of 22 
 
(a) 1[* * * * * * *] 
 
(b) provide for certification of zone enterprises; 
 
(c) conduct oversight of enterprises; 
 
(d) enforce the building code of the SEZ; 
 
(e) coordinate between the developer and government entities and utility providers 
during construction; 
 
(f) assist Zone enterprises in obtaining approvals and registrations; 
 
(g) serve as the point of contact between the zone enterprise and utility providers; and 
 
(h) facilitate between enterprises and government regulators and tax authorities. 
 
 (4) SEZ Committees shall execute their responsibilities according to their standard 
operating procedure in accordance with zone regulations. 
 
24. Admission of zone enterprises. —(1) Enterprise shall be admitted into a SEZ by the  
developer in accordance with applicable zone admission criteria, the zone regulations and the terms  
of the development agreement. 
 
(2) Any enterprise which is refused admission into a SEZ  by a developer may appeal to the  
1[relevant SEZ Authority], which shall have the power to direct the relevant developer to allow 
admission to the enterprise in question in accordance with the applicable zone regulations and  
development agreement. 
 
25. Sanctions against zone enterprises. —(1) The BOA shall issue zone regulations which  
provide for sanctions against zone enterprises and the manner in which such sanctions may be imposed. 
 
(2) The BOA may, with respect to particular SEZs, delegate its authority under sub-section (1) 
to SEZ Authorities. 
 
(3) The SEZ Authority may if it is satisfied that it is necessary to do so to secure the proper  
management of any zone enterprise, issue directions to zone enterprises generally or to any zone  
enterprise in particular to carry out such changes as are necessary to rectify the situation and the zone 
enterprise shall be bound to comply with such directions. 
 
(4) The SEZ Authority may only expel a zone enterprise from a SEZ if it finds that— 
 
(i) the zone enterprise is in violation of its obligations; and 
 
(ii) the zone enterprise has failed to rectify such violation despite notice. 
 
(5) The SEZ Authority may appoint an interim administrator or take such interim measures for 
 
1Omitted and subs. by Act No. XXXIV of 2026, ss.15 and 16.
 
Page 18 of 22 
 
a period of not more than one month if it is satisfied that it is necessary to do so― 
 
(i) in the public interest; or 
 
(ii) to prevent any of the affairs of any SEZ being conducted in a manner, 
detrimental to the interests of stakeholders, developers, zone enterprises or  
persons whose interests are likely to be affected or in a manner prejudicial to  
the interests of the SEZ. 
 
(6) The action taken by the SEZ Authority in accordance with sub-section (5) shall be referred 
to BOA within seven days for ratification by BOA, The BOA shall decide the matter and issue the  
guidelines and instructions about operations of zone enterprise within fifteen days. 
 
26. Land regime.—(1) The Provincial  Government of each  Province or any  concerned 
authority shall nominate, for each SEZ, a sub-registrar who shall be the exclusive authority with which 
all documents relating to that SEZ shall be liable to be registered under this Act, zone regulations and 
any other applicable law. 
 
(2) Notwithstanding any other law in force , a developer may not sell, sub -lease or otherwise 
transfer any rights with respect to any immovable property within a SEZ except through a duly  
registered instrument. 
 
27. Public utilities and transportation links.—(1) Unless provided otherwise in a particular 
development agreement, it shall be the responsibility of— 
 
1[(i) the Federal and Provincial Government s to en sure, at government expense in 
the ca se of SEZs established on Public land or by Public sector en tities, the 
provision of r oad acce ss, all utilitie s including electrici ty, gas, 
telecommunication services, and other essential facilities up to the  designated 
zero point within one year o f the notification of the SEZ. The BOA may, on a  
case by case bas is, also allow such provision at government  expense for SEZs 
established by private parties; as per criteria approved by it; and] 
 
(ii) 1[* * * * * * *] 
 
(iii) each developer to ensure, within a particular SEZ, the supply of gas and electricity to 
all zone enterprises as well as the availability of all other public utilities required for 
such areas as envisaged in the development agreement. 
(2) Unless provided otherwise in a particular development agreement and notwithstanding  
anything to the contrary contained in the Regulation of Generation. Transmission and Distribution of  
Electric Power Act, 1997 (XL of 1997), each developer shall have the right to set up a captive electric 
power generation plant or install a hydel power generator of sufficient size to cater to the expected  
demand for electricity within a particular SEZ and to sell and distribute only the excess electricity so  
generated within and outside that particular SEZ in accordance with the applicable regulations. 
28. Applicable operating administrative procedures.—(1) The BOA, the BOI and the SEZ 
Authorities shall promote the adoption of simplified administrative procedures for SEZs and zone  
enterprises with the relevant Federal and Provincial authorities and agencies. Such procedures shall in 
particular facilitate the— 
__________________________________________________________________________________ 
1Subs. and omitted by Act No. XXXIV of 2026, s.17. 
 
Page 19 of 22 
 
(i) issuance of licences, permits and other approvals to zone 
enterprises required for their business activities; 
(ii) satisfaction of customs and other export or import requirements by 
zone enterprises; 
(iii) fulfillment of tax obligations by zone enterprises; and 
(iv) authorization of electronic communications and Modes of e-governance. 
(2) Procedures under sub-section (1) shall endeavour to— 
(i) substitute notifications and registrations for licence, permit and other  
approval requirements; and 
(ii) authorize approvals on a no objection basis within a specified period. 
29. Assistance by the BOI and SEZ Authorities. —(1) The BOI shall act as a liaison and  
facilitating agency between,— 
(i) all Federal Ministries, authorities and agencies; and 
(ii) SEZ Authorities, developers and zone enterprises. 
(2) The BOI shall act as a one stop shop in its responsibilities under sub-section (1). 
(3) The SEZ Authorities shall act as a liaison and facilitating agency between— 
(i) all departments, authorities and agencies of the relevant Province 1[or 
territory], including all local government and municipal authorities and 
agencies; and 
(ii) developers and zone enterprises. 
(4) To the extent practicable, SEZ Authorities in the Provinces or in any other area shall seek  to 
enter into administrative arrangements with tax, customs, labour and other authorities u nder which SEZ 
authorities may exercise certain administrative functions on behalf of such authorities, which  
arrangements may include a secondment of officials with decision-making power from such authorities to 
SEZ Authorities. 
(5) All Federal and Provincial Ministries and departments, authorities and other agencies shall 
fully co-operate with the BOI and SEZ Authorities in facilitating the activities of developers and zone 
enterprises and carry out the requisite functions within the time frame stipulated under the regulatory  
framework prescribed by BOA for the implementation of this Act. 
30. Labour laws.― All labour and employment laws of Pakistan shall be applicable to SEZ  in 
the same manner as they are applicable to all territories within Pakistan. 
31. Employment of key persons.―Notwithstanding anything contained in any other law,  the 
BOA may issue special rules for the employment by zone enterprises of key managerial and technical 
persons who are not citizens of Pakistan, relating to the terms and conditions of their contracts as well as 
with respect to the issuance of visas, temporary residence permits and temporary work permits for  such 
key persons and their dependents provided further that such rules shall only be issued after  consultation 
with— 
 
1Ins. by Act No. XXXIV of 2026, s.18. 
 
Page 20 of 22 
 
(i) the Ministry of Interior; 
 
(ii) the Ministry of Foreign Affairs; and 
 
(iii) such other Ministry or Department as the BOA may direct. 
 
32. Security.—(1) Each Province or any concerned authority shall be responsible for providing 
security for the protection of SEZs. 
 
(2) Pending the creation of a special police force, each Province or any concerned authority  
shall designate special police units responsible for the protection of SEZs within that area. 
 
33. 1[* * * * * * *] 
 
34. Incentives for SEZs.—(1) On execution of development agreements, the developer of the 
particular SEZ as well as all zone enterprises in that SEZ shall be entitled to benefits set out in sections 
36 and 37 respectively. 
 
(2) With the objective of promoting hi -tech industries or particular regions, the BOA may  
grant additional benefits to a particular category of SEZs, zone enterprise, regions or sectors 
provided  that— 
 
(i) such additional benefits may only be grant ed if the BOA finds them to be  
justified on the basis of an economic impact assessment; 
(ii) such additional benefits, if granted conditionally, may be liable to be forfeited  
with retroactive  effect if it  is finally determined that  a developer or zone  
enterprise has failed to comply with the conditions prescribed for the additional 
benefits in question; and 
(iii) the BOA shall make the economic impact assessment of a SEZ within five years 
from the date the agreement is signed and within the first year of the operation 
of an enterprise. 
 
2[(iv) such additional benefits g ranted by BOA to the relevant h i-tech indu stry or  
particular region shall be available to any other SEZs established or to be  
established with the relevant hi -tech industry or established or to be e stablished 
in the particular region.] 
(3) Any additional benefits granted by the BOA— 
(i) shall be deemed to be included in the relevant 2[developer] agreement; and 
(ii) shall become effective on such conditions as the BOA may stipulate. 
 
(4) Nothing in this Act shall be construed to limit the authority of any Federal, Provincial or  
Local Government authority to grant such additional benefits to developers and zone enterprises as 
are  within the scope of their respective statutory powers. 
 
 
 
 
1Omitted by Act No. XLV of 2016, s.5. 
2Added and subs. by Act No. XXXIV of 2026, s.19.
 
Page 21 of 22 
 
35. Protection of benefits. —(1) All incentives under this Act  shall be  additional to  all 
incentives, benefits and protections which may be applicable to developers  and zone enterprises 
under      generally applicable legislation and international agreements of Pakistan. 
 
(2) These benefits shall not be withdrawn prematurely and any change therein shall be to the  
advantage of the developer of the SEZ or the enterprise. 
 
36. Benefits for developers.―Unless otherwise provided in a development agreement, 
developers shall be entitled to the following benefits, namely:― 
 
1[(a)  one time exemption from all custom -duties and taxes on plant and machinery 
imported into Pakistan except the items listed under Chapter 87 of the Pakistan 
Customs Tariff, for the setting up of an SEZ subject to verification by the BOI;]  
 
  (b)  1[exemption] from all taxes on income accruable in relation to the development 
and operation of the SEZ for a period of 1[five] years, starting from the date of 
signing of the development agreement. 
 
37. Benefits for zone enterprises.― All zone enterprises shall be entitled to the following  
benefits, namely:— 
 
1[(a)  one time exemption from customs-duties and taxes on import of plant, 
machinery into SEZ except items listed under Chapter 87 of the Pakistan  
Customs Tariff, for installation in that zone enterprise subject to verification by 
the BOI;]  
2[(b)  exemption from all taxes on inco me for enterprise s commencing commercial 
production for the next ten years or until the th irtieth day of June 2035,  
whichever is earlier.] 
2[38.  Establishment of Special Economic Zone Appellate Tribunal .__ (1) A Special 
Economic Zone Appellate Tribunal shall be established , and no court shall take cognizance of any 
legal dispute under this Act or the rules or regulations made thereunder to which t he jurisdiction of the 
Special Economic Zone Appellate Tribunal extends. 
(2) Notwithstanding anything contained therein, the Federal Government may, by notification 
in the official Gazette, designate an existing tribunal established under any other law to exercise the 
powers and perform the functions of the Special Economic Zone Appellate Tribunal under this Act. 
(3) The Tribunal constituted under sub -section (1) shall have exclusive jurisdiction to 
determine all matters pertaining to this Act, any rules  or regulations made pursuant to this Act and the 
operation and implementation of this Act or such rules or regulations by any person or body 
empowered by, under or by virtue of this Act or such rule or regulation, including without limiting  the 
generality of the foregoing, the exercise of powers and functions by BOA, Approval Committee, BOI, 
SEZ Authority, SEZ Committee or an interim administrator appointed by an SEZ Authority: 
Provided that the foregoing shall not include service matters pertaining to civ il servants as 
defined in the Civil Servants Act, 1973 (LXXI of 1973). 
__________________________________________________________________________________________ 
1Subs. by Act No. XLV of 2016, ss. 6 and 7. 
2Subs. by Act No. XXXIV of 2026, ss. 19-20.
 
Page 22 of 22 
 
(4) T he Tribunal shall consist of a chairman and two other members. The chairman and 
members shall be appointed by the Federal Government on such terms and conditions as it may 
determine. 
(5) The Chairman of the Tribunal shall be an advocate of known integrity and competence with 
at least twenty years  experience in commercial matters and the m embers of the tribunal  shall be 
persons of known integrity and having professional experience of at least ten years in the field  of law, 
economics, technology or finance, coupled with experience in the industrial section. 
(6) The Chairman and m embers of the Tribunal constituted under sub -section (1) shall hold 
office for a period of three years and shall be eligible for reappointm ent for a similar term or terms or 
until attaining the age of sixty -eight years in the case of the c hairman and si xty-two years in the case 
of a member, whichever is earlier. 
(7) The Tribunal shall decide a matter expeditiously but not later than three months of its filing 
before the tribunal. 
Explanation.— It is clarified that the timeframe for rendering a decision within three months is 
mandatory and not directory. 
(8) The Tribunal for the purpose of deciding an appeal be deem ed to be a civil c ourt and shall 
have all the powers vested in such a c ourt under the Code of Civil P rocedure, 1908 (Act V of 1908) 
and judgments of such t ribunal shall be deemed to be decree of a civil c ourt issued under  Act V of 
1908. 
(9) Any person aggr ieved by an order, judgment or decree of the Tribunal under this section 
may prefer an appeal to the Supreme Court of Pakistan within sixty days.] 
39. Alternative dispute resolution procedures. — (1) Development agreements may provide 
for the resolution of disputes through arbitration between developers and any Federal, Provincial or 
Local      Governmental authority or agency arising out of, or relating to, such development agreement. 
 
(2) Development agreements may authorize developers to pursue and defend the rights of zone  
enterprises within a particular special economic zone through arbitration. 
 
(3) Zone regulations may provide for the resolution of disputes between zone enterprises in the  
same SEZ or between zone enterprises and developers through arbitration and mediation in accordance 
with procedures approved by the BOA for this purpose. 
 
 40. Rules and regulations for implementation of this Act.― 1[(1)] The BOI, in consultation 
with SEZ Authorities and with approval of the BOA, may make rules and regulations as deemed 
necessary for implementation and to carry out purposes of this Act. 
1[(2) In case of any conflict between this Act and any rules and re gulations made under this 
Act, the provisions of this Act shall prevail.] 
 
 
1Designated as, added by Act No. XXXIV of 2026, s. 21. 
          RGN Dated: 11-06-2026