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  "title": "FOREIGN PRIVATE INVESTMENT (PROMOTION & PROTECTION) ACT 1976",
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  "text": "FOREIGN PRIVATE INVESTMENT (PROMOTION & \r\nPROTECTION) ACT 1976 \r\n(XLII of 1976) \r\nCONTENTS \r\n1. Short title commencement and application \r\n2. Definitions \r\n3. Field for Foreign Private Investment \r\n4. Approval of Foreign Private Investment \r\n5. Protection of Agreements \r\n6. Repatriation Facilities \r\n7. Remittances by Foreign Employees \r\n8. Tax Concession and Avoidance of Double Taxation \r\n9. Equal Treatment \r\n10. Removal of Difficulties \r\n11. Power to Make Rules. \r\n12. Repeal \r\nTEXT \r\nFOREIGN PRIVATE INVESTMENT (PROMOTION & PROTECTION) ACT \r\n1976 \r\n(XLII of 1976) \r\n[4th June, 1976] \r\nAn \r\nAct \r\nto provide for the promotion and protection of foreign private investment in Pakistan. \r\nWHEREAS it is expedient to provide for the promotion and protection of \r\nforeign private investment in Pakistan, and for matters ancillary thereto; \r\nIt is hereby enacted as follows:– \r\n1. Short title, commencement and application.– (1) This Act may be called \r\nthe Foreign Private Investment (Promotion and Protection) Act, 1976. \r\n(2) It shall come into force at once. \r\n(3) It shall apply to al l industrial undertakings in Pakistan having foreign \r\nprivate investment established with the approval of the Federal Government after t he \r\nfirst day of September, 1954: \r\nProvided that nothing in this Act shall be in derogation of any facilities or \r\nprotection specifically sanctioned by the Federal Government to foreign private \r\ninvestment in the case of particular industrial undertaking or a class of industrial \r\nundertakings or such facilities or protection as may be available to foreign private \r\ninvestment under a bilateral investment treaty. \r\n2. Definitions.– (1) In this Act, unless there is anything repug nant in the subject \r\nor context,– \r\n(a) “foreign capital\" means investment made by a foreigner \r\n1\r\n[or by a \r\nperson who, being a citizen of Pakistan, is also the citiz en of any other \r\ncountry] in an industrial undertaking in Pakistan– \r\n(i) in the form of foreign exchange, imported machinery and \r\nequipment, or \r\n(ii) in any other form which the Federal Governme nt may approve \r\nfor the purpose; \r\n(b) “Foreign private investment\" m eans investment in foreign capital by a \r\nperson who is not a citizen of Pakistan \r\n2\r\n[or who, being a citizen of \r\nPakistan, is also the citizen of any other country] or by a company \r\nincorporated outside Pakistan, but does not include investment by a \r\nforeign Government or agency of foreign Government;  \r\n                                                           \r\n1Ins. by the Foreign Private Investment (Promotion and Protection) (Amdt.) Act, 1993 (4 of 1993), s. 2. \r\n2Added Ibid. \r\n(c) “industrial undertaking” means an industry, undertaking or \r\nestablishment engaged in the production, distribution or processing of \r\nany goods, the providing of services specified in this behalf by the \r\nFederal Gov ernment or the development and extraction of such \r\nmineral resources and products as may be specified in this behalf by \r\nthe Federal Government \r\n3\r\n[but, for the purpose of investment by a \r\nperson who being a citizen of Pakistan, is also the citizen of any other  \r\ncountry, does not include an undertaking or establishment engaged in \r\nproviding banking or insurance services]. \r\n(2) Words and expressions used but not defined in this Act shall have the \r\nsame meanings as in the Companies Act, 1913 (VI of 1913). \r\n3. Field for  foreign private i nvestment.– (1) The Federal Government may \r\nconsistent with the national interest, for the promotion of foreign private investment, \r\nauthorize such investment in any industrial undertaking:– \r\n(a) Which does not exist in Pakista n and the esta blishment whereof in the \r\nopinion of the Federal Government, is desirable; or  \r\n(b) Which is not being carried on in Pakistan on a scale adequate to the \r\neconomic and social needs of the country; or  \r\n(c) Which will contribute to– \r\n(i) the development of capita l, technical and managerial resources \r\nof Pakistan;  \r\n(ii) the discovery, mobilization or better utilization of the national \r\nresources;  \r\n(iii) the strengthening of the balance of payments of Pakistan;  \r\n(iv) increasing employment opportunities in Pakistan; or  \r\n(v) the economic development of the country in any other manner. \r\n4\r\n4. Approval of Foreign Private Investment .– Any sanction granted by the \r\nFederal Government for investment in an industrial undertaking shall be subject to \r\nthe following conditions and to s uch other conditions as the Federal Government \r\nmay specify, namely:– \r\nWhen the foreign private investment is by a person who being a citizen of \r\nPakistan, is also the citizen of any other country, he shall deposit the entire amount \r\nof repatriable foreign inv estment in a foreign exchange account in Pakistan for its \r\nsubsequent use for the purchase of machinery and other fixed assets of the \r\nundertaking. \r\n5. Protection of Agreements.– (1) Where the Federal Government considers it \r\nnecessary in the public interest t o take over the management of an industrial \r\nundertaking having foreign private investment or to acquire the ownership of the \r\nshares of citizen s of Pakistan in the capital of such industrial undertaking, any \r\n                                                           \r\n3Added Ibid. \r\n4Subs. by the Foreign Private Investment (Promotion and Protection) (Amdt.) Act, 1993 (4 of 1993), s.3, for section 4. \r\nagreement approved by the Federal Government rela ting to such undertakings \r\nentered into between a foreign investor or creditor and any person in Pakistan shall \r\nnot be affected by such taking over or acquisition. \r\n(2) Foreign capital or foreign private investment in an industrial \r\nundertaking shall not be a cquired except under due process of law which provides \r\nfor adequate compensation therefore to be settled in the currency of the country of \r\norigin of the capital or investment and specifies the principles on and the manner in \r\nwhich compensation is to be determined and given. \r\n6. Repatriation Facilities.– Subject to the provision s of the Foreign Exchange \r\nRegulation Act, 1947: \r\n(a) a foreign investor in an industrial undertaking established after the 1st \r\nday of September, 1954, and approved by the Federal Govern ment, \r\nmay at any time repatriate in the currency of the country from which the \r\ninvestment originated– \r\n(i) foreign private investment to the extent of original investment;  \r\n(ii) profits earned on such investment; and  \r\n(iii) any additional amount resulting f rom the reinvested profits or \r\nappreciation of capital investment; and \r\n(b) A creditor of an industrial undertaking referred to in clause (a) may \r\nrepatriate foreign currency loans approved by the Federal Government \r\nand interest thereon in accordance with the terms and conditions of the \r\nsaid loan: \r\nProvided that nothing in this section shall affect the terms of the permission to \r\nmake such investment granted to a foreign investor before the commencement of \r\nthis Act. \r\n7. Remittances by foreign e mployees.– Foreign nationals employed with the \r\napproval of the Federal Government in any industrial undertaking having foreign \r\nprivate investment may make remittances for the maintenance of their dependents in \r\naccordance with the rules, regulations or orders issued by the Fe deral Government \r\nor the State Bank of Pakistan. \r\n8. Tax concession and avoidance of double t axation.– (1) The Federal \r\nGovernment may allow such concessions to industrial undertaking s having foreign \r\nprivate investment as may be admissible under any law for the time being in force. \r\n(2) Foreign private investment shall not be subject to other or more \r\nburdensome taxes on income than those applicable to investment made in similar \r\ncircumstances by the citizens of Pakistan. \r\n(3) Foreign private investment shall be a llowed all the tax concessions \r\nwhich may be admissible on the basis of any agreement for avoidance of double \r\ntaxation which the Government of Pakistan may have entered into with the \r\nGovernment of the country of origin of such investment. \r\n9. Equal treatment.– Industrial undertakings having foreign private investment \r\nshall be accorded the same treatment as is accorded to similar industrial \r\nundertakings having no such investment in the application of laws, rules and \r\nregulations relating to importation and exportation of goods. \r\n10. Removal of d ifficulties.– If any difficulty arises in giving effect to any \r\nprovision of this Act, the Federal Government may make such order, not inconsistent \r\nwith provisions of this Act, as may appear to it to be necessary for the pu rpose of \r\nremoving the difficulty: \r\nProvided that no such power shall be exercised after the expiry of one year \r\nfrom the commencement of this Act. \r\n11. Power to make r ules.– The Federal Government may, by notification in the \r\nofficial Gazette, make rules for c arrying out the purposes of this Act, and such rules \r\nmay, among other matters, provide for the employment of Pakistani and foreign \r\nnationals in industrial undertakings having foreign private investment. \r\n12. [Repeal].– Omitted by the Federal Laws (Revision and Declaration) \r\nOrdinance, 1981 (XXVII of 1981), s. 3 and sch., II",
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