A Comprehensive Guide to Gwadar Free Zone

A comprehensive guide to Gwadar Free zone

Gwadar Port, the main construction project under the China Pakistan Economic Corridor (CPEC) framework, holds immense importance in China’s Belt Road Initiative.

This port is located on the shores of the Arabian Sea, just outside the straits of Hormuz, which is one of the major shipping routes for oil. Apart from the construction of the deep-sea port, Pakistan and China have developed a Gwadar Free Zone to unlock the full potential of Gwadar Port. 

The establishment of this free economic zone will not only increase the country’s exports but will also help in establishing ties with all the major players in the region. 

Gwadar Free Zone is located near the port and covers a total area of 2,281 acres. It is connected to all the major cities of the country via road and air. This economic zone is also an integral part of tapping the full potential of the port that will become a future hub for trade in the region. 

To highlight the importance of this zone, Graana.com, Pakistan’s smartest property portal, shares a comprehensive guide to Gwadar Free Zone. 

 

Gwadar Free Zone: Phase 1

 

Gwadar Free Zone Timeline

 

Construction of the first phase of the Gwadar Free Zone started in 2015 and was inaugurated in 2018. The construction work on over 60 acres of land started with the focus on developing business centres, cold storage, warehouses, and fishery processing centres.

In phase 1, there are a total of 47 enterprises that have been registered in the free zone for investment.

Additionally, there are six factories that have been constructed, with three of them fully operational. Besides these, there are six more factories that are still under construction. 

 

Gwadar Free Zone: Phase 2

Last year, former Prime Minister Imran Khan inaugurated phase 2 of the project, which is spread over 2,221 acres of land. According to China Port Holding Company, there is a $3 billion direct investment lined up that will create around 30,000 jobs.

This phase will focus on the manufacturing, trading and service industries. The development work on phase 2 is underway and it is expected to be completed in a year or two. 

 

Benefits of Gwadar Free Zone

 

Special Gwadar Special Economic Zone

 

Gwadar seaport is one of the flagship projects of the China Pakistan Economic Corridor CPEC that will provide greater connectivity to Western China, South Asian, and Central Asian states.

In order to become a major player in regional trade, the Government of Pakistan decided to develop a free zone in collaboration with China. To promote the economic activities, the CPEC authority has made the China Overseas Ports Holding Company (COPHC) in charge of the free zone.

This emerging company from Hong Kong has an agreement of 40 years with the Government of Pakistan. 

The main objective is to develop this port into a major trade hub. So far, the company has developed a modern industrial park over an area of 25 acres.

The industrial facility has all the facilities like roads, electricity, communications, etc. There are also plans to build an international airport and a power plant for Gwadar. 

The main purpose of establishing this economic zone is to attract foreign investors to set up new businesses in the industries of manufacturing, logistics, and services. These will have an immense impact on the country’s economy and will help in creating jobs for locals.

Moreover, these free zones will also help build strong ties with China and other countries in the region. 

 

Incentives for Foreign Investors

 

Gwadar Free Zone

 

In order to attract foreign investments to increase business activity in the area, the Government of Pakistan has introduced several incentives for foreign investors:

  • 100 % ownership for foreign investors 
  • 23 years tax holiday for investors
  • 100% tax exemption on customs duties for construction and operation 
  • 99 years lease for plots
  • Flexibility in visa regulations 
  • Developed offices, light industrial units, warehouses 
  • World-class infrastructure and security arrangement 
  • A one-stop shop, one-window facility for clearances
  • Easy licensing procedure

 

All these incentives can attract foreign investment in different industries. Businesses that can be set up in the free zone have been mentioned in a list published by COPHC.

  •  Bonded warehousing
  •  Container yards
  •  International purchasing, transit & distribution
  •  Packaging/labeling
  •  Ambient/temperature-controlled/refrigerated storage facilities
  •  Stuffing & de-stuffing
  •  Trans-shipment
  •  Light end-assembly 
  •  Imports & exports
  •  Value-added exports
  •  Value addition to imports

 

Registering a New Company

 

Development work in Gwadar

 

COPHC has made the registration procedure quite simple for investors. In order to register a new company in the free zone, you need to follow the steps given below.

  • Investors have to submit required documents to the Gwadar Free Zone Company (GFCZ) with payment of processing fees.
  • They also have to open a bank account in the free zone with a deposit of minimum capital of US $500,000. 
  • Gwadar Free Zone Company will take around 10 days to scrutinize the documents and will issue the registration certificate and lease deed.
  • Once a company receives the registration certificate, it has to apply for its staff’s visas. 
  • Finally, the investor and staff have to go through medical checkups before getting a residence stamp on the visa. 

 

Required Documents to Get a Licence for Business

In order to get a licence for setting up a business in Gwadar, companies have to submit the following documents. 

  • Business plan or a feasibility study
  • Passport photocopies
  • Coloured photographs of all partners
  • Bank statement showing the balance of US$ 500,000 in any bank in the Gwadar Free Zone 
  • Partnership agreement
  • In the case of private limited companies, investors have to submit a Certificate of Incorporation and Memorandum of Association of the Company. They also have to appoint a representative with power of attorney for all the dealings in the free zone.

 

The companies in the free zone can apply for the following licences.

  • General trading
  • Industrial licence
  • Logistics licence
  • Services licence
  • International transport (Trans-shipment) licence

These special economic zones in Gwadar promise prosperity and the development of infrastructure in the country.

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