Pakistan, with a population of over 240 million (5th largest globally) and a GDP growth rate of 0.29 percent in FY23, offers significant opportunities for U.K. businesses willing to invest the time needed to develop a strategic market presence. Pakistan is strategically located to become Asia’s premier trade, energy and transport corridor. It is also the gateway to the energy-rich Central Asian States, the financially liquid Gulf States and the economically advanced Far Eastern tigers. This strategic advantage alone makes Pakistan a marketplace teeming with possibilities. From setting up or expanding your business to takeovers, technology partnerships and portfolio investments, UPTIB helps you make decisions and offers support throughout your project, calling not only upon UPTIB investment consultants but also its network of regional partners. Your success is ours, too.
We can help you understand all that Pakistan has to offer, choose the best technical and regional options for your business plan, receive the most
appropriate support and forge winning partnerships. And locally, we can continue to work with your UK personnel on a long-term basis.
The technology sector is an oasis of opportunity where revenue flows in foreign currency, while input costs remain in the local currency.
As the local Pakistani rupee depreciates, revenue for the Technology sector actually increases due to their costs remaining in PKR but their earnings increasing in value.
The HEC mandated all Higher Education Institutes (HEI) establish Offices of Research, Innovation, and Commercialization (ORICs), which led to the establishment of the Business Incubation Centers (BICs). Pakistan’s HEC supports and encourages HEIs to establish BICs to strengthen the link between academia and industry.
Pakistan’s market for computer software has seen steady growth for the past several years. According to local industry sources, the total size of the software sector is approximately $3.2 billion, which is expected to grow despite challenges posed by the business environment and macroeconomic challenges.
The local software market offers substantial business opportunities for UK companies who offer products for the corporate sector including financial management and business forecasting, online IT training portals, e-commerce, e-payment, embedded tools, and other web-based applications. Industry experts have expressed optimism about growth prospects in the e-commerce sector, projecting $1.6 billion in revenue by 2023. Increased use of mobile wallets, coupled with cheaper and more accessible smartphones, has helped increase the user base for Pakistan’s e-commerce industry.
Due to the global pandemic and prevailing domestic macroeconomic challenges, Pakistan’s market for computers and peripherals has seen a nominal growth trajectory during the last fiscal year. With virtually no domestic production, the country relies heavily on imports.
Sub-Sectors:
The most promising sub-sectors within Computers and Peripherals for FY 2024 are:
Pakistan’s market for cybersecurity equipment and services is at a developing stage and needs investment and technical expertise. With more than 100 million internet subscribers in both public and private sectors, the local market offers substantial business opportunities for the UK & European companies, as there exists a marginal presence of local and foreign companies having expertise in offering reliable service packages for the domestic cybersecurity requirements. Like other markets, the cybersecurity threats in Pakistan include hacking, identity theft, cyber-bullying, cyberstalking, spoofing, financial frauds, digital piracy, viruses and worms, malicious software, IPR violations, money laundering, denial of service attacks, electronic terrorism, vandalism and pornography.
Pakistan’s telecommunications industry has seen some growth lately, owing to the growing demand for reasonable telecom services. The country has witnessed an extensive expansion of mobile and broadband networks, and the government has taken significant steps to improve infrastructure and encourage competition.
Telecom Infrastructure
Pakistan’s telecommunications infrastructure includes Microwave radio relay, coaxial cable, fiber-optic cable, cellular, and satellite networks. There are ten international submarine cable systems connecting Pakistan, including SMW3, SMW4, SMW5, IMEWE, AAE-1, TW1, PEACE, 2AFRICA, and AFRICA1 that provide links to Asia, the Middle East, Europe and Africa.
Telecommunication Equipment
The present market size for the import of telecommunication equipment (including handsets) is estimated at approximately $700 million. Chinese telecom infrastructure providers like ZTE and Huawei have established branches in Pakistan and are engaged in the design, development, installation, configuration, and maintenance of telecom installations. Other vendors of telecom equipment and services in Pakistan include Advance Digital, Inc., GD Satcom, iDirect, Comtech EF Data Corp., NEC Corporation, Conexant Systems, Agere Systems and Emerson Process.
The energy sector in Pakistan poses a challenge to its economic development. According to National Electric Power Regulatory Authority’s (NEPRA) 2022 yearly report, Pakistan’s total installed power generation capacity is 43,775 MW, of which 59% of energy comes from thermal (fossil fuels), 25% from hydro, 7% from renewable (wind, solar and biomass), and 9% from nuclear.
Pakistan has considerable potential for using wind energy in the coastal belt of Sindh and Baluchistan (in southern Pakistan). The GoP has developed a wind power energy corridor along the southern coastal regions of Sindh and Baluchistan. As per wind data, it measures Pakistan’s coastal belt 180km long, with an exploitable potential of 50,000MW of electricity generation through wind turbines. Currently, 36 private wind projects are operating, producing approximately 1845MW. The Government of Pakistan renewable energy (RE) policy envisages generating 60 percent of the country’s energy from renewable resources by 2030. The ambitious target provides several opportunities for the wind energy market in Pakistan.
In addition to large hydro, there are prospects for the development of small-mini-micro hydropower with a revised RE policy. The GoP considers small hydropower projects as a clean and inexpensive source of energy. Small hydropower projects are mainly located in remote areas of Pakistan particularly the North of the country. Recently, the GoP has identified new generation requirements by capacity, fuel technology, and utilizing indigenous resources for power generation and through this plan aims to add 13,000 MW of hydropower capacity to the current 9000 MW capacity by 2030.
Pakistan has an average of 9.5 hours of sunlight daily. The GoP introduced a set of support policies to foster renewable energy development. According to the Private Power & Infrastructure Board (PPIB) of the Ministry of Energy, seven solar projects of 530 MW are operational and supplying electricity to the national grid.
With the rising costs of electricity in Pakistan and an unreliable grid supply, more industries and commercial organizations are turning to captive solar solutions. There has been a strong surge in domestic installation of rooftop photovoltaic panels in larger cities. The current state of the energy sector is promising for growth in solar power in the future given rising fossil fuel prices.
Opportunities
There are untapped potential opportunities for UK & European companies, products, modern technology, and equipment to explore this industry. Pakistan generates approximately 49.6 million tons of solid waste a year, which has been increasing more than 2.4 percent annually. According to government estimates, around 87,000 tons of solid waste are produced every week, with a majority coming from key cities. Karachi, the largest city in Pakistan with an estimated population of 20 million people, generates over 16,500 tons of municipal waste daily.
Existing Solid Waste Management System in Pakistan
Local and municipal governments are responsible for collecting waste throughout most of Pakistan’s major cities. In cities, about 60–70% of solid garbage is collected.
Pakistan is rich in mineral resources mainly Baluchistan and KPK are rich in natural resources and this huge mineral potential which is yet to be fully explored. During last year 2023 at the ‘Pakistan Minerals Summit’ aimed at exploring investment opportunities into Pakistan’s $6 trillion estimated worth of mineral deposits. With abundant mining opportunities foreign investors are invited to contribute to realizing the potential of Pakistan’s estimated $6 trillion worth of natural deposits. Pakistan boasts vital minerals, crucial for global energy transition, attracting investments across complete mining cycle. Enhanced exploration potential promises lucrative returns, making the sector a prime investment opportunity.
Predominant Mineral Resources
The wheels of the oil and gas sector are set in motion, gaining momentum from the anticipated settlement of the gas circular debt. An impressive PKR 414 billion is poised to be reclaimed from the colossal PKR 1.27 trillion debt, revitalizing the sector’s fiscal vigor. Moreover, as gas tariffs are expected to rise, they pave the way for debt reduction, but also for greater liquidity in gas companies. The refinery sector is headed towards upgradation as the government has recently approved the brownfield refinery policy, igniting a spark of optimism. With this policy, local oil refineries are gearing up for improvement, with enhanced production capacities and amplified fuel output, coupled with a welcome reduction in furnace oil production. But that’s not all! The greenfield refinery policy is heralding approximately USD 10 billion in investments to erect brand-new refineries – a supply answer to the escalating demand for oil.
Pakistan’s agriculture sector is the mainstay of the economy and a primary source of livelihood and sustainability for locals. During FY 2022-23, the agriculture sector contributed 24 percent to the country’s GDP and employed 37.4 percent of the total workforce. During the 2022-23 fiscal year. According to local industry sources, the total land area under cultivation is approximately 48 million hectares.
Leading Sub-Sectors
To better develop the agriculture sector, the Government of Pakistan, both at the federal and provincial levels, has launched several programs and incentives to modernize and expand existing capacity. These initiatives include easy and long-term credit facilities, farmer education programs, and subsidized inputs. In addition, the government through budgetary support programs offers low taxation programs on agricultural machinery to boost agricultural modernization.
For an option for high-return investment in Pakistan, real estate is one of the most popular and widely-used opportunities. People buy property, especially land, and leave it unattended for some time. Over the years, the price of real estate has increased. It can then be resold when it commands a much higher price. Keep track of the market prices and sell the property when the prices are at their peak. There are many real estate blogs and real estate books out there that can update you about real estate trends, construction costs, tips and tricks, plot size conversion, and much more. The most significant advantage of real estate investment in Pakistan is that it is a safe investment option. You get total ownership of the property, and, most importantly, the land is an asset where the price always increases. If you want business ideas in Pakistan, consider investing in houses, flats, plots, or shops. All these assets will provide great yields in the form of resale value and rents. There are also many construction companies developing real estate projects in Pakistan in which you can invest.
The Ministry of Health in Pakistan used to oversee healthcare in the public sector. However, the responsibility for providing healthcare to the general population has now been shifted to the provinces.
The private sector plays a vital role in the delivery of healthcare services in Pakistan. Most private hospitals, clinics, and health-related facilities are in urban areas and are well-equipped with modern diagnostic facilities. The Government of Pakistan spent about $785 million on healthcare in the fiscal year ending June 2021. According to a respected research study, the medical devices market in Pakistan is estimated at $500 – $600 million with an estimated growth rate of 15 percent CAGR over the next five years (2019-2023). UK, Europe & USA healthcare services and medical equipment are generally well-received in Pakistan and are known for their high quality.
Pakistan is the fifth largest population in the world with a total of approximately 240 million people in 2022. About 37 percent of the population lives in urban areas and about 55 percent of the population is under 24 years of age.
Secondary/Higher Secondary Education System
Pakistan’s national education system comprises twelve years of education spread across four levels: primary (grades 1-5), middle school (grades 6-8), matriculation (grades 9 and 10) and intermediate (grades 11 and 12). Many of the private schools offer the Cambridge education system in conjunction with the nationally mandated curriculum.
Franchising has a well-established presence in Pakistan, particularly in the hospitality and food service industries. Foreign companies hold the majority share of the franchise market in Pakistan, owing to their pioneering status and robust marketing campaigns. A significant number of major foreign restaurants, ride-sharing services, shipping and logistics, hotel chains, and car rental companies have expanded their operations in Pakistan through franchise partnerships.
By franchising, UK companies can easily enter the market without making a significant capital commitment. This strategy allows firms to operate through local franchisees, who offer valuable local expertise and help mitigate the challenges of adapting to a new business environment.
Until recently, direct marketing in Pakistan was limited to direct mail advertising, with leading pharmaceutical firms, banks, and large publishing groups as major users. Pharmaceutical companies employed direct mail to reach out to doctors, hospitals, and medical professionals. Publishers used direct mail to reach out to their existing subscribers of magazines and publications for repeat business and banks used this tool to market their consumer banking products. However, the inception of telemarketing and the increased usage of courier services along with Internet and mobile phones have recently broadened the scope of direct marketing.
The three principal routes to entering the Pakistan market are:
(1) Formation of a wholly-owned private company;
(2) Formation of a public limited company (foreign firm retains majority control, but seek public participation through stock flotation);
(3) Establishment of a company in cooperation with joint venture partners who supply local expertise, management and capital.
Joint ventures may be either private or public companies. Joint ventures are an attractive option because many local entrepreneurs have built a substantial market base and seek to combine their knowledge of local markets with foreign capital and technological know-how. The foreign joint venture partner limits its initial country exposure while enjoying the support of a local partner in a new market. Prominent joint ventures have been established in the automobile, fertilizer, electronics and home appliances, financial services, food and consumer products, and energy sectors.
The traditional approach to selling in Pakistan has been through personal contact with a major wholesaler that serves a network of retailers throughout the country. However, this trend is changing. Advertising is now a growing industry and some of the large consumer manufacturers extensively promote their products through print and electronic media as well as the internet. Many banks regularly contact their potential customers through direct marketing. Nonetheless, personal relationships are very important, especially when selling non-consumer items to the government or large corporations. Since personal relationships take time to nurture, UK firms are advised to invest time in the market, preferably with a local presence or at least frequent trips to the area.
UK products and services enjoy an excellent reputation in the local market, especially for their quality and durability. However, UK companies face tough competition from Chinese, Japanese, and Korean companies, which generally have a larger presence in the country and are able to offer their products and services at competitive prices. Providing after-sales services is also essential and UK firms are advised to establish this service either through a local/agent distributor or through their presence in the market.
A business in Pakistan may be organized as a sole proprietorship, a partnership, or a public or private limited company. Foreign investors generally establish limited companies as required under the Pakistan Companies Ordinance, 1984. They must register with the Securities and Exchange Commission of Pakistan (SECP).
Within 30 days of establishment, foreign companies must file the following documents with the Registrar of Joint Stock Companies, Ministry of Finance, Islamabad:
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