Govt to Give Free Land to Developers for Special Economic Zones

Pakistan’s National Assembly Standing Committee on Finance has approved a key amendment bill allowing the government to lease state land free of cost to private developers for setting up Special Economic Zones (SEZs), in a move aimed at boosting investment and industrial activity.

The committee, chaired by Syed Naveed Qamar, approved the Special Economic Zones Amendment Bill 2026 without detailed clause-by-clause discussion.

Following the meeting, Investment Minister Qaiser Sheikh said the government plans to allocate 6,000 acres of land in Karachi for SEZ development, which will be leased to developers without any upfront cost.

He added that each developer can be allotted up to 1,000 acres, although final lease terms are yet to be decided. Under the new framework, if multiple developers are selected, each must receive at least 500 acres, while the total zone size must be at least 1,000 acres.

Pakistan had earlier committed under its International Monetary Fund programme to phase out tax exemptions and incentives for SEZs, which had raised concerns about the future attractiveness of such zones.

Officials told the committee that the condition to remove tax incentives by 2035 applies to SEZs, Special Technology Zones, and Export Processing Zones.

However, the committee approved that new projects starting commercial production within the next 10 years or before June 30, 2035 will still be eligible for full income tax exemption, providing a window of relief for investors.

To address investor concerns over delays, the bill also proposes the creation of a Special Economic Zones Appellate Tribunal, which will handle disputes exclusively.

The tribunal will be required to decide cases within three months, and appeals against its decisions can only be filed in the Supreme Court of Pakistan within 60 days, bypassing high courts to speed up the process.

The new law also shifts approval powers for SEZ applications from the Board of Investment Pakistan to the Federal SEZ Authority, while private developers will be responsible for building the zones. Basic infrastructure such as roads, electricity, gas, and telecommunications will be provided by federal and provincial governments.