Foreign Private Investment (Promotion and Protection) Act, 1976

This Act sets out the legal protections available to foreign investors putting private capital into industrial undertakings in Pakistan, applying to investments approved by the Federal Government after 1 September 1954. It defines "foreign private investment" as investment by a non-citizen (or dual national) or a foreign-incorporated company, excluding investment by foreign governments themselves.

Section 3 lets the Federal Government approve foreign investment in industries that do not yet exist in Pakistan, are underdeveloped relative to national needs, or would help build capital and technical resources, boost the balance of payments, or create jobs. Section 4 sets conditions on approved investment, including a requirement that dual-national investors deposit repatriable investment in a foreign exchange account for buying machinery and fixed assets.

Section 5 is a key protection: if the government ever takes over management or acquires shares in an industrial undertaking with foreign investment, existing agreements with foreign investors or creditors remain unaffected, and any acquisition of foreign capital must follow due process with adequate compensation in the currency of the investment's country of origin.

Section 6 allows foreign investors and creditors to repatriate their original investment, profits, and any reinvested gains in the currency the investment originally came in, subject to the Foreign Exchange Regulation Act, 1947. Section 7 lets foreign employees remit money abroad to support their dependents. Section 8 promises foreign investment the same tax treatment as domestic investment and the benefit of any double-taxation treaties, and Section 9 guarantees equal treatment in import/export rules compared to domestic-only undertakings.

This is an older law from 1976, last amended in 1993, and its repeal clause (Section 12) was itself omitted by a 1981 ordinance. Given Pakistan has since entered numerous bilateral investment treaties and updated investment policy, current investors should check whether more recent legislation or treaties supersede specific provisions here.