By Irfan Ahmed ISLAMABAD, Feb. 08 (INP-WealthPK): The Senate of Pakistan has finally passed the Special Technology Zones Authority Bill 2021 to fast-track the expansion of export-oriented IT companies at a time when Pakistan’s technology exports have already increased by more than 80% over the past year. Pakistan has a few IT companies that have revenues exceeding $1 million. The Government of Pakistan has committed to developing the technology sector in Pakistan. The Special Technology Zones Authority (STZA) has been mandated to provide legislative and institutional support to encourage investments and high-tech business in the technology zones across Pakistan. The STZA has started working on its flagship and the country’s very first Special Technology Zone (STZ) in Islamabad, known as “Islamabad Technopolis.” In order to create a state-of-the-art infrastructure that can facilitate the business environment, an MoU has been signed between the STZA and iENGINEERING Corporation. According to the Memorandum of Understanding, both the organizations will work together to achieve high-tech industrial growth, create jobs, upskill the youth, and attract foreign direct investment through development of a knowledge ecosystem driven by innovation and collaboration. iENGINEERING Tech Park will develop a business in Islamabad with an initial investment of $2 million which will create more than 2,500 highly skilled jobs and generate over $100 million investment in the next five years. The park will accommodate local and foreign technology companies with Pakistani descent owners, startups, and tech-hubs which will initially materialize up to $50 million of zone enterprise cumulative annual revenue for Islamabad STZ. Source: Special Technology Zones Authority Mr. Aamer Saleemi, Chief Executive Officer of Islamabad STZ, assured his full support for an early execution of the project. He said the Islamabad STZ will act as a catalyst for enhancing the IT exports of Pakistan and was expected to attract more than U$350 million foreign direct investment in the technology sector which will provide jobs to more than 200,000 youths. Islamabad STZ will be the first place of choice in the region for the global tech companies and expatriates due to its state-of-the-art technology supportive infrastructure, lucrative tax incentives and one-window services. Source: Special Technology Zones Authority According to the Federal Board of Revenue (FBR), Zones Enterprises will enjoy a tax holiday for 10 years with exemption from income tax, sales tax, customs duty and property tax, and will be governed by a relaxed foreign exchange regime. Though that means lost revenues in shape of income tax and customs duty on the import of machinery, the STZs can act as a “miracle pill” for attracting foreign investment from big companies such as Microsoft and Google, as there is no shortage of good local talent up for hiring – with around 18 IT universities in Islamabad. A better legal environment and an efficient regulatory system inside the zones is the key, and the STZ authority should try to establish field offices of the Securities and Exchange Commission of Pakistan (SECP), Federal Board of Revenue (FBR), Customs and Capital Development Authority (CDA) as well as sub-campuses of top three IT universities of Pakistan inside the zone. However, if the will of the government is there to ensure more liberal laws in the zone, then the emerging ecosystem will leverage Pakistan’s unique position to make it a regional IT hub. iENGINEERING Technology Park plans to facilitate the acquisition of foreign Pakistani-descent businesses by providing a mechanism for zone enterprises to invest their profits and acquire new customers and generate new revenue streams. Pakistan, placed 2^nd in South Asia for ease of doing business, has made unprecedented improvements in ease of doing business according to the World Bank report 2020 due to introduction and integration of e-services at the national and provincial level. The strategy is designed to create an enabling environment for attracting higher investment, both foreign as well as domestic, to help boost the country’s growth prospects. In a nutshell, Pakistan is going to be the IT hub in near future with its tremendous IT strategies and this would help in creating jobs in the technology sector. Creation of the Authority will also build an environment, which would attract foreign direct investment, apart from improved quality of domestic technology products and services and fostering innovation. It will also help reduce unemployment in the country. The government should provide more facilities to the IT industry, especially the foreign companies, to encourage foreign direct investment.