SPECIAL TECHNOLOGY ZONES AUTHORITY ACT, 2021

 

The Special Technology Zones Authority Act, 2021, is a significant piece of legislation in Pakistan that establishes the Special Technology Zones Authority (STZA) and provides the legal framework for the development and regulation of special technology zones. This act is designed to promote technology-based industries, innovation, and economic growth within the country by creating specialized zones for technology-related businesses and activities.

1. Short title, extent and commencement.
2. Definitions.
3. Establishment of the Authority.
4. Powers of the Authority.
5. Functions of the Authority.
6. Board.
7. Budget, finance and audit.
8. Grants.
9. Funds.
10. Bank accounts.
11. Approvals Committee.
12. Functions and Responsibilities of the Approvals Committee.
13. Criteria for approval of zones.

I4. Licensing of zone enterprises and zone developers.

15. Sanctions against zone enterprises and zone developers.

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16. Land regime.

I7. Public utilities and other facilities.

18. Incentives for zones.
19. Protection of incentives.
20. Exemptions and Incentives for the Authority and for the zone developers.
21. Exemptions and Incentives for zone enterprises.
22. Alternate dispute resolution mechanism.
23. Cognizance of legal disputes.
24. Appeals to Special Technology Zones Appellate Tribunals.
25. Appeal to Supreme Court.
26. Appointment and Powers of Administrator.
27. Powers to make rules.
28. Powers to make regulations.
29. Annual report.
30. Delegation of powers.
31. Recruitment.
32. Employee of the Authority to be public servants.
33. Assistance from agencies.
34. Public Sector and State-Owned Enterprises Investments in zones.
35. Employment of Key Persons.
36. Indemnity.
37. Sums payable to the Authority to be recoverable as land revenue.
38. Act to override other laws.

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39. Jurisdiction Barred.
40. Removal of difficulties.
41. Repeal and savings.

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SPECIAL TECHNOLOGY ZONES AUTHORITY ACT, 2021

ACT NO. XVII OF 2021

[4th October, 2021]

An Act to ensure the development of scientific and technological eco-system through development of

zones to accelerate technology development in the country

WHEREAS it is expedient to provide institutional and legislative support for the technology sector

with internationally competitive and export oriented structures and eco-systems, to attract foreign direct

investment, develop collaboration eco-system connecting academia, research and technology industry, to

initiate innovation in production system and products, to increase the standards and quality of technology

goods and services, to increase productivity and decrease the costs of production through high-tech

interventions, intensive innovation and futuristic entrepreneurship, to enable job creation, to

commercialise technological knowledge and to provide for matters connected therewith or incidental

thereto;

It is hereby enacted as follows:___

1. Short title, extent and commencement.___(1) This Act shall be called the Special Technology

Zones Authority Act, 2021.

(2) it extends to the whole of Pakistan.

(3) It shall come into force at once.

2. Definitions.—In this Act, unless the context otherwise requires,___

(a) “Administrator” means the Administrator as described under section 26;

(b) “Authority” means the Special Technology Zones Authority established under

section 3;

(c) “Board” means the Board of Governors constituted under section 6;

(d) “Chairperson” means the Chairperson of the Authority appointed by the Prime

Minister, pursuant to the provisions of this Act, who is entrusted with whole or

substantially whole of the powers of the management of affairs of the Authority in

accordance with the Act;

(e) “Capital Goods” means the goods including but not limited to materials, plant,

machinery, hardware, equipment and software, devices, instruments, accessories,

attachments, building materials, materials and any other equipment required to

perform functions of the Authority, zones, zone developers and zone enterprises,

whether or not manufactured locally, for use in the zones, set up under the Special

Technology Zones Authority Act, 202l;

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(f) “co-zone developer” means a Partner of the zone developer for the establishment,

development, operation or management of zone;

(g) “Division Concerned” means the Cabinet Division;

(h) “Development Agreement” means a duly approved agreement between Authority

and a zone developer, agreed to and endorsed by the Approvals Committee that

authorizes zone developer to develop and establish a zone or a part thereof;

(i) “Master Plan” means an overarching planning document providing conceptual,

spatial, landscape, infrastructure, facilities etc. plan, which is used to structure the

land and development of infrastructure and facilities for facilitating the smooth

functioning of the zones;

(j) “Member” means Member of the Authority;

(k) “One Window Facility” means a physical or an information and communication

technology (ICT) facility, comprising of relevant entities of Federal, Provincial or

Local Governments for facilitation of the zone developer and zone enterprises to

lodge standardized information and documents with a single-entry point to fulfill

the requirements under the Act, rules or regulations including the establishment,

development, execution, operations, functioning and management of zones;

(l) “Person” includes any registered association of persons, consortium, a body

corporate formed or incorporated by or under any law in force, company,

corporation, society, modaraba, Real Estate Investment Trust (REIT), Government,

trust, partnership, or any juridical personality and includes the zone developer and

zone enterprise;

(m) “Prescribed” means prescribed by rules or regulations made and notified under this

Act;

(n) “Regulations” means regulations prescribed under this Act;

(o) “Research and Development” includes regular activities carried out with the

purpose of obtaining new knowledge that shall enable the development of science

and technology or creating new equipment, systems, products, services, processes,

applications, and tools etc., using the available information and resources, including

training and development, software production or improving those that are

available;

(p) “Rules” means rules prescribed under this Act;

(q) “Special Technology Zones Appellate Tribunal” means the Special Technology

Zones Appellate Tribunal constituted under this Act;

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(r) “Technology Sector” includes one or more technology sectors prescribed by the

Authority under the rules;

(s) “zone developer” means s public, private or a public-private Person responsible for

development, operation or management of the whole, or a part of the whole special

technology zone, and licensed by the Authority as such, and includes a co-zone

developer;

(t) “zone enterprise” means any public, private, or public-private Person developing,

operating and managing a technological enterprise within the zone and licensed as

such by the Authority;

(u) “zone” means a particular type or class of zone, which may be geographical or

virtual, new or existing or expansion of an existing zone, as approved and notified

by the Authority under the riles, including, but not limited to special technology

zones, information technology parks, high-tech industrial areas, software

technology parks, hardware technology parks, technology export zones, free

technology zones, science and technology parks, information technology zones,

science and technology zones, R&D zones, opportunity zones, innovation zones,

technology development zones, knowledge parks, smart cities, knowledge cities,

technology incubation zones or any sector zones, which are developed for the

development, promotion and proliferation of technology, particularly all the latest

cutting edge technologies and may require technological intervention such as

biotech, chemical technologies, agritech, fintech, robotics, nanotech, edtech, etc.

and other zones with any combination or combinations of the aforesaid fields,

3. Establishment of the Authority.___(1) On the commencement of this Act, there shall stand

established an Authority to be called the Special Technology Zones Authority in accordance with the

provisions of this Act.

(2) The Authority shall comprise of the Chairperson and up to eight (8) Members to be appointed

in accordance with the provisions of this Act:

Provided that the Chairperson with the consent of the Board may increase or decrease the number

of Members, from time to tire, as may be considered appropriate.

(3) The Chairperson shall be appointed by the Prime Minister of Pakistan for a period of three

years and shall be eligible for re-appointment for one or more similar terms.

(4) The Members shall be appointed and removed in accordance with the regulations.

(5) The Chairperson shall preferably be from the private sector and shall be eligible for such

remunerations and benefits as determined by the Prime Minister,

(6) The Chairperson of the Authority may resign from his office by writing in his hand addressed

to the Prime Minister, or may be removed from his office if, on an inquiry by the Prime Minister, he is

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found unable to perform the functions of his office because of mental or physical disability or he is found

guilty by a court of any serious crime of moral turpitude.

(7) The Authority may create, sanction and approve posts, from time to time as per regulations,

and prescribe by regulations the qualifications, experience and terms and conditions for appointment of

the Chairperson, Members, Executive Directors and other officers and staff of the Authority.

(8) The Authority shall meet at such time and place and in such manner, as may be prescribed by

regulations.

(i) Three Members shall constitute a quorum for meetings of the Authority requiring

a decision by the Authority:

Provided that until regulations are made in this behalf, such meetings shall be convened by the

Chairperson

(9) No act or proceeding of the Authority shall be invalid by reason only of the existence of a

vacancy in, or defect in, the constitution of the Authority.

(10) The powers and functions of the Authority as provided in the Act shall be exercised in the

name of the Authority by the Authority, comprising of Chairperson and the Members, which shall act

through the Chairperson who shalt be the chief executive of the Authority. In performance of his functions

under the Act, the Chairperson may act either directly or through the Members.

(11) The principal office of the Authority shall be in Islamabad and it may set up offices at such

place or places within or outside Pakistan as may be required.

(12) The Authority shall be a body corporate having perpetual succession and a common seal, with

power, to purchase, acquire, sell, lease, sub-lease, sub-let, license and hold moveable and immovable

property, and shall by said name sue and be sued.

(13) The Authority shall have the power to constitute as many committees, councils and

associations and establish companies, nationally and internationally, to achieve its goals, as it may deem

fit.

4. Powers of the Authority.___(1) Subject to the provisions of this Act, the Authority may take

such measures and exercise such powers as may be required for performance of its functions.

(2) Without prejudice to the generality of the powers conferred by sub-section (1), the Authority

shall have exclusive power and authority—

(a) for planning, policy formulation, execution, monitoring and evaluation of zones

which may be assigned to it, approved by it, notified by it or developed by it from

time to time;

(b) to approve and notify zones in accordance with the rules or regulations;

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(c) for establishment, development, implementation, operations, management and

functioning of zones;

(d) to make or cause to make arrangements for provision of security, utilities, roads,

basic infrastructure, high speed internet and any other services required to ensure

smooth development and functioning of zones;

(e) to allow any additional incentives, subsidies and rebates, for zone developers and

zone enterprises, with the approval of the Federal Government, Provincial

Governments or local governments as the case may be;

(f) to charge fees and charges for services rendered and the licenses issued to the zone

applicants, zone developers and zone enterprises as may be prescribed;

(g) to impose fines, sanctions and penalties for contraventions under this Act, rules or

regulations;

(h) to appoint an Administrator to the zones in accordance with this Act and any

applicable rules or regulations;

(i) to collect information with respect to technologies and technological developments

within and outside Pakistan and review the impact thereof;

(j) to enter into contracts, agreements or any other legal instrument for the purposes of

this Act;

(k) to purchase, acquire, sell, lease, sub-lease, sub-let, license and hold moveable and

immoveable property and set up companies for the purposes of the zones to meet

the objectives of this Act;

(l) to seek assistance from any Federal/Provincial officer, Ministry, Division,

department or agency far the performance of its functions under this Act;

(m) to set up One Window Facility to facilitate zone developers and zone enterprises;

and

(n) to do anything incidental and ancillary to the foregoing as may be deemed

necessary.

(3) The services provided by the Authority shall be deemed to be essential services for the purposes

of the Pakistan Essential Services (Maintenance) Act, 1952, and shall be notified accordingly.

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5. Functions of the Authority.___(1) To perform its functions, the Authority may—

(a) from time to time, review national investment policies, laws and regulations that

impact zones and propose any amendments, modifications and relaxations therein

to the Federal Government, the Provincial Government or the Local Governments,

(b) initiate and consider zone investment proposals and categories for investment

which may require specific treatments and interventions and recommend, where

appropriate, additional incentives or relaxation of conditions or criteria to the

Federal Government, the Provincial Government or the Local Governments for

approval;

(c) he associated in the formulation of all policies that may have an impact on

investment in Technology Sectors in Pakistan, including economic, fiscal and trade

policies;

(d) coordinate with Ministries, departments, agencies and Provincial Governments or

Local Governments with regard to policies and their implementation having impact

on investment in Technology Sectors;

(e) identify and promote Technology Sector investment opportunities within and

outside Pakistan:

(f) develop and approve mechanisms and arrangements for management and operation

of zones including one-window facility for provision of all services and utilities,

physical infrastructure, logistics infrastructure, human capital development and

digital infrastructure for the zone;

(g) identify, create and upgrade technological and scientific clusters and industrial

support systems within zones including, but not limited to Research and

Development centres, skills development centres training institutes, data centres,

universities, hospitals, and other hard and soft infrastructure related to successful

execution of zones;

(h) attract investment into zones including foreign direct investments, venture capital

funds, public sector investments, public-private investments and private funds;

(i) marketing and promotion of zones by developing a marketing, image-building and

public relations strategy to generate interest in the potential and opportunities of the

Pakistani market and publicize its activities;

(j) identification and approval of locations for setting up zones;

(k) procure and acquire land or any infrastructure tor the zones;

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(l) appoint commissions, expert bodies and consultants to study various aspects of

attracting investments in technology related businesses and improving the

investment climate, procedures and other related matters;

(m) develop studies, feasibility reports, experiments, public-private partnership

frameworks, financial vehicles, technical research and surveys related to zones;

(n) develop or cause to be developed Master Plans for zones and approve or cause to

approve them;

(o) act as One Window Facility for investors, zone developers, zone enterprises and

other stakeholders involved in zones dealing with other relevant government

entities on their behalf;

(p) issue letters of recommendation or invitation leers, which shall he deemed

sufficient for the purpose of issuance of business and work permits or visas by

relevant Authority;

(q) collect, compile, analyse, maintain and distribute zones related information, and

from time to time publish analytical reports, trends and insights;

(r) promote a congenial environment and ensure ease of doing business for investments

into zones by allowing import of Capital Goods as required by the zone developers

and zone enterprises;

(s) negotiate and finalize all such acts, deeds, initiatives, agreements for protection and

promotion of technology related investments with other countries, international

forms, financial institutions and multi-lateral agencies, and represent Pakistan on

regional and international level, that may be necessary or expedient for the purpose

of successful planning, development, execution, implementation, management and

maintenance of zones;

(t) liaise with private sector trade bodies and associations, both local and international,

for their active participation in promotion of technology related investment;

(u) approval, issuance, notification and cancellation of licenses of zone enterprises and

zone developers;

(v) allocate, lease, sub lease, rent, sell land, space, lots within zoncs developed by the

Authority itself;

(w) perform any other function assigned to it by the Federal Government.

(2) The Federal Government may, from time to time, assign more functions and issue guidelines

to the Authority.

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6. Board.___(1) There shall be a Board of Governors of the Authority comprising of the following

members, namely:

___

(a) the Prime Minister of the Islamic Republic of Pakistan shall be its President;

(b) Federal Minister in Charge of the Division Concerned;

(c) Chairperson of the Authority; and

(d) not less than seven and not more than twenty-five ex-officio and Independent

members, provided that not less than five Independent members shall he appointed

from private sector from amongst persons of renowned integrity expertise,

experience and knowledge.

(2) The ex-officio and the Independent members shall be appointed by the Federal Government for

a term of four years.

(3) An ex-officio member shall hold office as member till such time he holds the office by virtue

of which he is a member and upon his transfer, retirement, resignation or removal from office, the person

appointed in such persons place shall be the member.

(4) Secretary of the Board shall be appointed with the approval of the President.

(5) The Board shall meet at least twice in a year. The Secretary of the Board may take approval of

any decision through circulation among members of the Board. The Chairperson of the Authority may

call a special meeting with the approval of the President of the Board.

(6) The meetings of the Board shall be presided over by the President of the Board and in his

absence, the President of 1he Board shall appoint any member to chair the meeting.

(7) The quorum for a meeting of the Board shall be one-third of the total membership of the Board,

and decisions of the Board shall be made with majority of total present members of the Board.

(8) The powers and functions of the Board are as follows;

(a) develop and approve national special technology zone strategy, national emerging

technologies strategy and national information and communication technology

strategy;

(b) develop and approve national special technology zone plan, national emerging

technologies plan, and national information and communication technology plan;

(c) approval of the rules and regulations of the Authority;

(d) issue such directions and policy guidelines to the Authority from time to time to

protect the interests of the Government, investors and public;

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(e) oversight, supervision and monitoring the performance of the Authority;

(f) approval of the annual budget annual audited financial statement and accounts for

any particular financial year;

(g) approval of annual report of the Authority;

(h) to annually review the implementation of this Act with a view to improving policies

relating to zones.

7. Budget, finance and audit.___(1) The Authority shall, in respect of each financial year, prepare

its own budget in accordance with the prescribed procedure and submit to the Board for approval.

(2) The Budget statement shall specifically state the estimated receipts and expenditure and the

sums which are likely to be required from the Federal Government during the next financial year.

(3) The Authority shall maintain complete and accurate books of accounts of its receipts and

expenditure.

(4) The accounts of the Authority shall be audited at the close of each financial year by a qualified

firm of Chartered Accountants.

(5) The Authority shall produce such accounts, books and documents and furnish such

explanations and information as the auditors may require for the purpose of audit by the external auditors

or Auditor General of Pakistan

(6) Copies of the Auditor’s Report on the accounts shall be provided to the Authority and the Board.

(7) The Chairperson of’ the Authority shall be its Principal Accounting Officer.

8. Grants.___(1) The Federal Government, the Provincial Governments and the Local

Governments may, from time to time, place annual grants to the Authority for the smooth discharge of its

affairs

(2) The Authority may receive domestic and international grants for the purposes of achieving the

objectives of this Act.

9. Funds.___(l) There shall be constituted a non-lapsable fund to be called the Special Technology

Zones Authority Fund, which shall vest in the Authority and shall be utilized by the Authority to meet all

expenses and charges properly incurred in connection with carrying out the purposes of this Act. The Fund

shall be credited all sums received by the Authority. The Fund shall be financed by:

(a) fees, commissions, charges and other amounts received by the Authority;

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(b) funds including grants provided by the Federal Government for payment of salaries,

establishing infrastructure and running day-to-day business of the Authority as one

line budget;

(c) funds provided by the Provincial, Local Governments or any other body including

grants;

(d) funds including grants from national and international bodies / organizations;

(c) loans from the Federal Government or Provincial Government;

(f) loans, investments and foreign aid obtained by the Authority;

(g) funds raised through Public-Private Partnerships by the Authority;

(h) funds from bonds, sukuks and other forms of finances and investments on the basis

of participation term certificates, musharika certificates, term finance certificates

or any other financial or debt instruments or securities issued by the Authority;

(i) proceeds of any investments made by the Authority in utilizing any amount of

Funds which is not required for immediate use.

(2) The Fund will be utilized for the above purposes as per the mechanism prescribed in the

regulations.

(3) Without prejudice to any other law for the time being in force, the Authority may invest in

development of projects, specialized funds or financial vehicles or any other area approved by the

Authority with fees and contributions from zone developers and zone enterprises, and with funds from

public, private or international entities,, and Federal, Provincial or Local Governments, to achieve

objectives of this Act.

10. Bank accounts.___(1) The Authority may open and maintain bank accounts in local and foreign

currency in any scheduled bank in Pakistan.

(2) Bank accounts of the Authority shall be opened with the prior approval of principal accounting

officer.

11. Approvals Committee.___(1) There shall be a committee, called Approvals Committee,

headed by the Chairperson and up-to eight members from amongst the Members and officers of the

Authority nominated by the Chairperson for this purpose.

(2) The Chairperson may call any person or adviser or consultant as an expert to assist the

Approvals Committee and such person or adviser or consultant shall not be eligible to cast a vote.

(3) The meeting of the Approvals Committee shall be convened on the orders of the Chairperson.

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(4) The Approvals Committee shall meet as frequently as required, but not less than once every

quarter.

(5) Two third or more of the members shall constitute quorum of the Approvals Committee.

(6) Where the Chairperson is not present, a Member of the Authority nominated by the Chairperson

shall chair the Approvals Committee.

(7) The decisions of the Approvals Committee shall be taken by majority of the total membership

present through voting. In case of equal voting, the Chairperson of the committee shall have the discretion

to take the final decision.

(8) The Chairperson shall appoint an officer from the Authority to be the Secretary of the said

Committee.

(9) The Chairperson shall be competent to remove or substitute any member of the Committee, if

desired

(10) The Chairperson may constitute sub-committees to assist the Approvals Committee to

discharge any of its functions.

 

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