S.# Subject Page No 1. Brief Introduction of AJ&K 1 2. Industrial

Index

S.# Subject Page No 1. Brief Introduction of AJ&K 1 2. Industrial Venture in AJ&K 2 3. Potential Areas of Investment 3 4. Existing Industrial Estates / Infrastructure 3 5. Mode of Payment for Industrial Plots 4 6. Policy, Incentives and Facilitation 5 7. Potential / Proposed Projects for 8 investment 8. Procedure for Acquiring Industrial Plots 9 9. Contacts for further Detail 10

Brief Introduction of AJ&K: The State of Azad Jammu & Kashmir Lies between longitude of 73° – 75° and latitude of 33° – 56° and comprises an area of 5134 square Miles (mi2) (13,297 square Kilometers). The area is divided into three Divisions and ten districts. Western side of the state boundary linked with the provinces of Punjab and KPK, while the boundary on south Estern side is flanked by Indian Occupied Jammu & Kashmir. The topography of the area is mainly hilly and mountainous with valleys and stretches of plains. The elevation from sea level ranges from 360 meters in the South to 6325 meters in the North. The snow line in winter is around 1200 meters above sea level while in summer, it rises to 3300 meters. The State of Azad Jammu & Kashmir has an estimated population of 4.45 million with rural to urban population ratio 88:12. The population density is 300 persons per sq. km, and majority of the rural population depends on forestry, livestock and agriculture to earn its subsistence. Average per capita income has been estimated to range from 500 to 600 US$. About 84% households have very small land holding between one to two acres per family. Major crops are maize, wheat & rice, whereas minor crops include vegetables, grams, pulses (red lobia) and oil-seeds. Major fruits are apple, pears, apricot and walnuts. Agriculture and livestock income ranges between 30-40% of household earnings. The remaining share comes from other sources including employment and business etc. It is also worthwhile that Overseas Kashmiries are contributing almost 20% towards foreign remittances of Pakistan. Industrial Venture in AJ&K: At the time of Independence in 1947, the economy of Azad Jammu & Kashmir was on subsistence level. It was early 70’s, when economic development of the area started. Despite financial constraints, efforts were made in developing infrastructure for the rapid development of the area. There are various types of small, medium & large scale Industrial units which have been established in AJ&K during last few decades and majority of these are still operational in spite of national & international economic crises. Potential Areas of Investment: The Government of Azad Jammu and Kashmir is encouraging investment in following areas / sectors; i. Small & Cottage Industries. ii. Medium and large Industries 3

iii. Mineral and Forest based Industries iv. Hydel Projects v. Tourism Potential and commercial viability of proposed industrial units depend on their location. Owing to close proximity to the market of Pakistan, districts Mirpur and Bhimber are most suitable locations for establishment of Medium and large scale industries. However, some opportunities for cottage / small & medium Industries are also available in Northern areas (Poonch & Muzaffarabad) of AJ&K in addition to investment in Mineral, Hydel, Tourism and Housing Sectors of AJ&K.

Existing Industrial Estates / Infrastructure:

To accelerate the pace of development through industrialization, the Department of Industries GoAJ&K has established six Industrial Estates in various districts of Azad Jammu and Kashmir providing basic infrastructure like roads, water supply, sewerage system, telephone and electricity etc. whereas, new industrial estates at Dudyal District Mirpur including Special Economic Zones in Mirpur and Muzaffarabad are also in progress.

Detail of Existing Industrial Estates with graded plots including present lease price is as under:

S.# Name of Rates per 100 50 25 08 04 02 01 Industrial kanal in kanal kanal kanal kanal kanal kanal kanal Estates Pak. Rs. 1. New Industrial 85000/‐ 10 20 32 20 35 42 118 Area Mirpur 2. Small Industrial 67000/‐‐ ‐ ‐ ‐ 25 29 64 Estate Bhimber

3. Old Industrial 100000/‐ 34 92 111 Estate Mirpur 4. Mini Industrial 94800/‐ 13 42 Estate Muzaffarabad 5. Mini Industrial 126900/‐ 7 53 Estate Kotli 6. Mini Industrial 113220/‐ 17 43 Estate Rawalakot

Mode of Payment:

1. 25% down payment and remaining 75% to be paid in 10 equal annual

installments for New Industrial Area Mirpur. 4

2. 20% down payment and remaining 80% to be paid in 20 equal annual

installments after availing 3-years as grace period for all other Industrial Estates.

Policy, Incentives and Facilitation i. Industrial Policy Govt. of Azad Jammu and Kashmir has adopted the policy of Govt. of Pakistan. Accordingly, except the following, all types of industries are allowed to be established in private sector under this policy. a) Arms and ammunition. b) Security printing c) Explosives material d) Radioactive material ii. Special Incentives for Industrialization in AJ&K: a) Exemption of Industrial products from payment of Sales Tax for a period of five years from the date of production. b) Conducive environment for investors including foreigners in free and fair atmosphere under protection of Economic reforms Act, 1992. c) Free transaction of principal amount and profits without prior permission of the Government for foreign investors. d) Exemption of octroi and local Taxes for five years from the date of commencement of production. e) Industrial plots are being allotted on 99-years, on lease basis in the Industrial Estates at nominal rates and easy installments. f) Provision of loan facilities in local as well as foreign exchange from the national banks, financial institutions & loan giving agencies for industries being set up in Azad Kashmir. g) To provide local, cheap and skilled Labour Force for Industrialization, more than 170 Vocational Training Institutes, Industrial Training Centers & Skill Development Centers (for Males & Females) including a Poly Technique Institute are functional under the management of AJK-TEVTA. h) Establishment of Dry Port at Mirpur (in process). i) Provision of Sui-Gas to Industrial Estates (in process). j) Provision of Railway link to Mirpur & MZD (in process).

5 iii. Financing Facilities

All scheduled Banks and DFIs working in Pakistan are also operational / available in Azad Jammu & Kashmir to provide financial assistance to investors. Whereas, Bank of Azad Jammu & Kashmir (BAJK) established in the territory is providing special assistance to investors in AJ&K. iv. Overseas Kashmiries Facilitation Cell Islamabad:

This office is functioning under the direct control and supervision of Chief Secretary GoAJ&K. The main office of the Cell is established in Kashmir House Islamabad for the convenience of investors especially for Overseas Kashmiries. Applications and proposals for investment can be forwarded to this office for further proceeding. v. Registration of Companies and Firms: Corporate Law Authority is also established in AJ&K headed by Chief Secretary GoAJ&K, whereas, regarding registration of Companies and Firms, Registration wing is also functioning with the Department of Industries & Commerce GoAJ&K.

vi. Industrial Development Board: Azad Jammu & Kashmir Industrial Development Board (IDB) headed by the Chief Secretary AJ&K has been constituted to address to issues of investors / industrialists at higher level in AJ&K. iv. Allotment Committee for Industrial plots: Allotment Committee headed by Minister for Industries GoAJ&K is also established regarding allotments of industrial plots in industrial estates of AJ&K.

Potential / Proposed Projects for Investment:

Keeping in view, the potential & requirement of AJ&K, there are so many opportunities of investment available in various Industries like food, readymade garments, furniture, plastic products, Hydro power generation, Tourism and Mineral based Industries in the area.

A list of proposed / identified projects is as below.

S.# Name of Projects S.# Name of Projects

1. Herbal Medicines 18. Marble chips & powder making units

2. Furniture industry 19. Chip / Fiber board-manufacturing

3. Ceramic tableware 20. P.V.C & RCC Pipe manufacturing

4. Polythene / Polypropylene bags 21. Sports goods (Bats &Hockeys etc.)

5. Mineral Based Industries 22. Fruit / vegetable preservation and spices grinding

6. Capacitor manufacturing projects 23. Hotels & Motels

7. Wooden crates making units 24. Steel furniture including grills, Doors & Windows etc.

8. Agricultural implements and tools plants 25. Machinery / spare parts manufacturing

9. Tooth picks / Matches manufacturing units 26. Bolts and nuts plants

10. Poultry forming 27. Readymade Garments

11. Cement Industry (small scale) 28. Solar Panels & Products

12. Melamine Industry 29. Hydro Power Generation

13. Potato chips & Tomato Catch-up plants 30. Pre-Fabricated Building Structure

14. Pharmaceutical Industries 31. Tourist Huts / Parks

15. Transport & Rubber Tyre factories 32. Electronic products / wires

16. Mineral water / Beverages 33. Silk reeling / processing

17. Soap / Washing powder Procedure for Acquiring Industrial Plots:

Following documents are required to be enclosed with applications for allotment of industrial plots in industrial estates established by the industries department GoAJ&K.

 Three copies of feasibility reports of proposed project(s) including Form B&C (Annexure-i).  Certificate of financial soundness regarding applicant(s) from the Banks.  In case of a company, name of shareholders / Directors and other related details (Form-29 Annexure-ii)..  NOC from Environmental protection agency (EPA) of GoAJ&K.  In case of a foreign company or non-state subject a copy of Filing / Registration Certificate issued by the Registrar of Companies GoAJ&K (Form-38 to 45 Annexure-iii)..  Single line plan of required covered area regarding proposed industrial unit(s).

For further detail please Contact Us:

S.# Name of Office Phone No. Fax No. 1. Directorate of Industries and Commerce 05822-921237 05822-921359 GoAJ&K. 05822-921166 2. Office of Joint Director of Industries 05827-921589 05827-921592 Mirpur Division Mirpur 3. Office of Deputy Registrar of Companies 05827-921278 Mirpur 4. Office of Assistant Director, Industrial 05828-920222 Estate Bhimber 5. Office of Industrial Development Officer 05822-920801 Mini Industrial Estate Muzaffarabad 6. Office of Industrial Development Officer 0334-5061432 Mini Industrial Estate Rawalakot 7. Office of Industrial Development Officer 05826-920483 Mini Industrial Estate Kotli

Chapter Registration Regulatory Procedure (REGISTRATION PROCEDURE FOR A COMPANY, FIRM AND NON GOVERNMENTAL ORGANIZATIONS) OVERVIEW:

The development of modern and efficient corporate sector and capital market based on sound regulatory principles, that provides impetus for high economic growth and foster social harmony in the Country. In order to materialize the legal requirement of the corporate sector in Pakistan, the Corporate Law Authority (CLA) was established which was later on converted into Securities and Exchange Commission of Pakistan (SECP). The Securities and Exchange Commission of Pakistan (SECP) was set up in pursuance of the Securities and Exchange Commission of Pakistan Act, 1997 and became operational on January 1, 1999. It has investigative and enforcement powers. The current mandate of the SECP includes the following 1. Regulation of corporate sector and capital market 2. Supervision and regulation of insurance companies 3. Supervision and regulation of non-banking finance companies and private pensions schemes 4. Oversight of various external service providers to the corporate and financial sectors, including chartered accountants, credit rating agencies, corporate secretaries, brokers, surveyors etc. REGISTERATION FRAME WORK IN AZAD JAMMU & KASHMIR.

As per rules of business 1985, the Department of Industries & Commerce has delegated the powers of registration of Companies, Firms & Societies. In order to materialize the legal status of the Companies willing to operate in Azad Kashmir, the Government of Azad Jammu and Kashmir adapted the Companies Ordinance 1984 through Azad Jammu and Kashmir companies Act 1992. In order to perform the functions, the Corporate Law Authority (CLA) was established in Azad Jammu & Kashmir in 2002 under the chairmanship of the Chief Secretary. For proper implementation of the Companies Ordinance 1984 in AJK, the Director Industries GoAJK has delegated the powers of Ex-Officio Registrar of Companies. All the case of registration of corporate sector of Muzaffarabad and Poonch division are dealt with the office of the Registrar of Companies established at Muzaffarabad. Whereas, the cases of registration of 9

Companies, Firms & Societies belonging to the Mirpur division are dealt with the Office of Deputy Registrar of Companies established at Mirpur.

CORPORATE LAW AUTHORITY (CLA)

AJ&K Govt. has established a Corporate Law Authority as per notification No. 3313-22/95 dated 29/08/1995 for governing and decisions of affairs of companies under section- 11, 12 and 13 of the Companies Ordinance, 1984 (AJ&K Companies Act, 1992).The Authority shall exercise & perform such powers and functions as are conferred on it by or under the said Companies Act. As per section 7 of Companies’ Ordinance, 1984, all the officer and persons employed in the execution of this Ordinance, shall observe and follow the orders, instructions and directions of Corporate Law Authority. Followings are ex-officio members of the CLA:-

1. Chief Secretary Chairman CLA 2. Secretary Finance Member CLA 3. Secretary Law Member CLA 4. Secretary Industries Member CLA 5. Registrar of Companies/ Member / Secretary CLA Director Industries REGISTRATION OF COMPANIES IN AJ&K

DEFINITION OF COMPANY

Company is an artificial person created by law, is a legal entity for carrying on a commercial or industrial enterprise. It has limited liability, perpetual succession & having indefinite life. It has capital divided into shares & has common seal. Company is corporate body & registered under Companies Ordinance, 1984 (AJ&K Companies Act, 1992).

KINDS OF COMPANY

PRIVATE LIMITED COMPANY (SECTION- 2 SUB-SECTIONS- 28)

Private company means the company which by its articles,

i. Restricts the right to transfer its share if any. ii. Limits the number of Directors to (50) not including persons, who are in in employment of company. iii. Prohibits any invitation to public to subscribe for its shares. (A private company should have at least two directors.)

PUBLIC LIMITED COMPANY (SECTION-2 SUB-SECTION-30)

A public company means a company which is not a private company. A public company can be of two types; (1) Unlisted Company (2) Listed Company at stock exchange. A public company should have at least seven directors.

STANDARD OPERATING PROCEEDURE FOR REGISTERATION OF COMPANY IN AJK

STEP 01: AVAILABILITY OF THE NAME OF COMPANY

First step towards the registration of company is the availability of name of the company. For this purpose an application is submitted to Registrar/ Deputy Registrar of Companies, as per (section-37).No company can be registered by a name identical with that by which a company already exists or nearly resembling with already registered name. Name must not deceptive or inappropriate. No company can be registered with the trade marks registered nationally or internationally.

STEP 02: DOCUMENTS REQUIRED FOR THE REGISTRATION OF A COMPANY

The persons, subscribers seeking for company registration, should provide following documents to Assistant Registrar of Companies/ Deputy Registrar of Companies/ Registrar of Companies:-

A- Memorandum and Articles of Association of Companies (section- 15 & 26 of Companies Ordinance);

Three copies dually signed by subscribers (directors) of the company & also signed by witness.

*Memorandum is the Constitution of the company which have five clauses:-

1. Name Clause 2. Registered Office Clause 3. Object Clause

4. Liability Clause 5. Capital Clause

*Articles are the bylaws of the company

B- Form 1 ;( Section- 30 (2) and Rule- 4)(Two Copies);

*This form is the Declaration of compliance with the requirements of Companies Act

C- For 21 ;( Section- 142)2 Copies;

*Shows situation of the registered office of the company. 11

D- For 29 ;( Section- 205)4 Copies;

*Shows particulars of Directors, Officers, Chief Executive, Secretary, Auditors and Legal Advisors etc. of the company.

E. CNIC, copies of directors and witness (Attested);

F. Affidavit by directors/ subscribers about correctness of documents;

G. Fee paid challan (as per sixth schedule);

If Deputy Registrar/ Registrar is satisfied that all the legal requirements have been fulfilled, he will register the memorandum under (section- 30) & issue Incorporation Certificate under (section- 32) of the Companies Act, 1992.

REGISTERATION OF FOREIGN COMPANIES IN AJK

All the Companies belonging to the country other than Pakistan willing to establish their business in Pakistan are treated as foreign companies and it is a legal requirement necessary for them to legalize their business as foreign company under section 451-452 of the Companies Ordinance 1984 by submitting their documents to Securities & Exchange Commission of Pakistan. As the same Ordinance is also adapted in the territory of AJK through Azad Jammu and Kashmir Companies Act 1992, so the same sections of the said Ordinance are also applicable for all those companies belonging other than AJK for legalizing their activities in the territory. It is further clarified that as per Section 451 (1) (e) of the Companies Ordinance 1984, the company shall have to submit the particulars of person resident in AJK on prescribed “Form 42” authorized by the company to interact with this office on behalf of the company. The person so designated termed as resident director or focal person and he will not be the director/shareholder of the company. He will be the employee of the company and authorized to accept services on behalf of the foreign company only.

STANDARD OPERATING PROCEEDURE FOR REGISTERATION OF FOREIGN COMPANY IN AJK

Following are the pre-requisite for the registration of foreign companies in AJK.

 True Copy of the Registration Certificate issued by the Securities and Exchange Commission of Pakistan (SECP).  True copy of the Memorandum & Article of Association issued by the Security & Exchange Commission of Pakistan. 12

 Copy of the Financial Statements.  True copy of Form “29” issued by the Security & Exchange Commission of Pakistan.  True copy of Form “A” issued by the Security & Exchange Commission of Pakistan.  Documents delivered for registration by a foreign company under section 451 (1) (a) and rules 22 & 23 on Form “38”.  Return showing address of the registered or principal office of a foreign company under section 451 (1) (b) and 452 (b) on Form “39”.  Return showing particulars of Directors, Chief Executive and Secretaries of a foreign company under 451 (1) (C) and 452 (C) on Form “40”.  Return showing particulars of Principal Officer of a foreign company under section 451 (1) (d) and 452 (d) on Form “41”.  Return showing particulars of persons resident in AJK authorized to accept services on behalf of a foreign company under section 451 (1) (e) and 452 (e) on Form “42”.  Return showing address of the principal place of business in AJK of a foreign company under section 451 (1) (f) and 452 (f) on Form “43”.  List of places of business established by a foreign company in AJK under section 451 (3) on Form “45”.  Board Resolution for the extension of business in AJK.  Board Resolution for nomination of resident director in AJK.  Power of attorney to resident director.  Copy of the CNIC of Board of Directors of foreign company.  Copy of the CNIC of resident Director.  Rent deed (Proof of established office In AJK).  Under taking regarding correctness of the documents.

REGISTRATION OF PARTNERSHIP FIRMS IN AJ&K

DEFINITION (SECTION-4)

Partnership is the relationship between the persons who have agreed to share the profit of the business carried on by all or any one acting for all. Persons who have entered into partnership with one another are called individually as “partners” and collectively “a Firm”. Partnership Firm is registered under Partnership Act, 1932 as adapted in AJ&K.

DOCUMENTS REQUIRED FOR REGISTRATION OF FIRM

i. Application for availability of name will be sent to Registrar, Deputy Registrar of Firms. ii. Partnership Deed on Rs. 1000/- stamp paper registered with registrar (Sub- Judge). iii. Form 1 (Application Form) dually filled & signed by the partners and witness must be attached by Notary Public (2 Sets). iv. CNIC of the copies of partners and witness (Attested) v. Affidavit about the correctness of papers. vi. Paid Fee Challan (Challan will be available in the office of Registrar/ Deputy Registrar of Firms).

APPLICATION FORM

Form 1 (section-58) should have following information:-

i. Name of Firm. ii. Place or principal place of the Firm. iii. Name of any other places where the firm carries on business. iv. Date, when each partners joined the Firm. v. Names in full and permanent addresses of the partners. vi. Duration of the firm. *This form must be signed by all the partners.

REGISTRATION OF SOCIETIES AS PER REGISTERATION OF SOCIETIES ACT, 1860

(AS ADAPTED IN AJ&K) 1. DEFINITION (SECTION-1)

Any seven or more persons associated for any literary, scientific or charitable purpose, or for any such purpose as is described in section-20 of this Act, may by subscribing their names to a Memorandum of Association and Filing the same with the Registrar of Companies/ Societies, from themselves into a Society under this Act. 2. REQUIREMENTS i. Application to Registrar/ Deputy Registrar of Joint Stock Companies for availability of name. ii. Memorandum and Articles of Association of the Society dually signed by the office bearers of the Society (3 sets). iii. Resolution passed by the members of the Society for establishment of Society and appointment of office bearers of the Society. iv. List of the office bearers of the Society with their CNIC numbers, address & phone numbers. v. NOC from Deputy Commissioner and AJ&K Home Department and Agencies. vi. CNIC copies of the office bearers of the Society (Attested). vii. Affidavit of the President of the proposed Society about the correctness of the documents. viii. Affidavit about members/officials not employed in Govt. Sector. ix. Rent Agreement (Karaya Nama) of the Registered Office of the proposed society. x. Fee paid challan as per Govt. Notification. xi. If Registrar is satisfied that all the legal requirements have been fulfilled, he will issue a Registration Certificate.

Chapter 3 Explosive 1. Mission Statement: To ensure the Public Safety and Security of human lives and property within the licensed premises. 2. Objectives: To ensure the public safety and security of human lives and properties within the licensed premises, with respect to manufacturing, transportation, storage, import, export, selling and use of:  Commercial Explosives

 Petroleum Products

 Hazardous chemicals.

 Mineral Compressed/ Liquefied Gases like CNG, and LPG.

Industrial Compressed Gases like Acetylene, Chlorine, Ammonia, Nitrogen and oxygen

Acts & Rules: 1. Explosives Act 2. Petroleum & Carbide of Calcium Manual 3. Mineral & Industrial Gases Safety Rules 2010. 4. Explosives Rules, 2010.