SEZ and EPZ Imports in Pakistan: Concessions, Customs Rules, and What Changes at the Port

By Olympic AgenciesLast updated: 12 July 2026

Quick Answer

Special Economic Zones and Export Processing Zones in Pakistan offer customs duty and tax concessions on imported capital goods, raw materials, and components brought into the zone. Goods imported into a SEZ or EPZ for use within the zone benefit from customs duty exemption under the SEZ Act 2012 or the EPZ Authority rules. Goods subsequently transferred from the zone into Pakistan's domestic tariff area lose those concessions and are assessed for duty as if imported directly.

Key facts
Governing laws	SEZ Act 2012 governs Special Economic Zones; EPZ Authority Ordinance 1980 governs Export Processing Zones
SEZ benefit	Customs duty and tax exemption on imported capital goods for zone development and operation; duty exemption on imported inputs for zone-based manufacturing
EPZ benefit	Duty-free import of machinery, equipment, raw materials, and components for use within the zone
Tariff area transfer	Goods moved from a SEZ or EPZ into Pakistan's domestic market are assessed for customs duty and taxes as if imported directly, at the rate applicable to the goods and origin at the time of transfer
Key condition	Goods benefiting from zone concessions must be used within the zone for the approved purpose — diversion to unauthorised use or unauthorised sale into the tariff area attracts penalties

Pakistan's Special Economic Zones and Export Processing Zones offer the most favourable customs-and-tax regime available to importers in the country — zero customs duty on capital equipment and production inputs, provided the goods stay within the zone and serve the approved enterprise purpose. But the concessions come with conditions: the goods cannot be freely sold into the domestic market without paying the forgone duty, the zone authority monitors compliance, and the customs paperwork for zone-bound goods follows a different procedure from standard clearance. This guide explains how the SEZ and EPZ import regimes work, what concessions apply, and what happens when goods leave the zone.

What is the legal framework?

Pakistan operates two zone regimes under separate laws:

Special Economic Zones under the SEZ Act 2012, administered by the federal Board of Investment and the provincial SEZ authorities. SEZs are designed to attract investment in manufacturing, services, and infrastructure, and can serve both the domestic market and export markets. The zones developed under the China-Pakistan Economic Corridor framework fall under the SEZ regime.
Export Processing Zones under the EPZ Authority Ordinance 1980, administered by the federal EPZ Authority. EPZs are focused on export-oriented manufacturing and services, and the goods produced within an EPZ are primarily intended for export, though limited domestic-market sales are permitted under the EPZ rules.

Both regimes offer broadly similar customs concessions — duty-free import of capital goods and production inputs — but the administering authority, the enterprise approval process, and the specific rules on domestic-market sales differ.

What customs concessions apply to SEZ and EPZ imports?

The core concession under both regimes is customs duty exemption on goods imported into the zone for an approved purpose:

Capital goods. Imported machinery, equipment, and plant for setting up or expanding the zone enterprise enter duty-free. For an agricultural processing plant in an SEZ — an edible-oil refinery, a rice mill, a pesticide formulation facility — the machinery import pays no customs duty, additional customs duty, or regulatory duty under the zone concession. This is separate from the 2026-27 budget exemption for agricultural machinery, which applies to imports into the general tariff area; the zone concession is broader and unconditional on the MNFSR certification that the budget exemption requires.
Raw materials, components, and consumables. Imported inputs used in the production process within the zone enter duty-free. A pesticide formulator in a SEZ importing active ingredients from China pays no duty on those ingredients as long as they are used within the zone for the approved production activity.
Goods for zone development. Infrastructure materials, construction equipment, and utility equipment for developing the zone itself benefit from the concession.

The concessions are not automatic — the zone enterprise must be approved by the zone authority, the imported goods must be declared for the appropriate zone-entry procedure in WeBOC, and the goods must be delivered to the zone under customs control. The zone authority maintains a record of goods admitted under concession, and customs can audit the record against the physical inventory in the zone.

What happens when goods leave the zone for the domestic market?

The zone concessions apply to goods used within the zone for the approved purpose. When goods are transferred from the zone into Pakistan's domestic tariff area — the general market outside the zone — the concession ends, and the goods are treated as if they were being imported from outside Pakistan at that moment:

The ex-zone goods declaration is filed, declaring the goods for home consumption
Customs duty, additional customs duty, regulatory duty, sales tax, and withholding tax are calculated on the value of the goods at the time of transfer, at the rates applicable to the goods and origin on that date
The assessed duty and taxes must be paid before the goods leave the zone

For a SEZ-based manufacturer who imports duty-free raw materials, processes them into finished goods, and then sells those finished goods into the domestic market, the duty is assessed on the finished goods — which may carry a different HS code and a different duty rate from the raw materials. The zone regime is designed to incentivise value addition within the zone: the duty on the finished product is typically lower than the duty that would have been paid on the raw materials and machinery, rewarding the processing activity that happens inside the zone.

What are the compliance obligations?

Operating under SEZ or EPZ concessions carries ongoing compliance obligations that standard importers do not face:

The zone enterprise must maintain records of all goods admitted under concession, all goods consumed in production, all finished goods produced, and all goods transferred to the domestic market or exported.
The zone authority and customs can audit these records and inspect the physical inventory at any time.
Goods admitted under concession cannot be diverted to unauthorised use, sold outside the zone without paying the forgone duty, or removed from the zone without customs clearance — doing so is a violation of the SEZ Act or the EPZ Authority rules and attracts penalties, recovery of the duty, and potentially loss of the zone concession.

The zone regime is designed for enterprises that are prepared to operate under customs supervision and maintain the records that the supervision requires. The duty savings are substantial, but the compliance burden is higher than standard clearance.

Olympic Agencies has managed customs clearance for SEZ and EPZ enterprises — zone-entry declarations, ex-zone clearance for domestic-market goods, and export clearance for zone-produced goods — at Karachi Port and Port Qasim since 1982. Our customs clearing service in Karachi covers standard clearance, bonded warehousing, and SEZ and EPZ procedures. WhatsApp us your zone and enterprise details and we will map the customs pathway.

Operating in a SEZ or EPZ? Let us manage your zone-specific customs documentation and clearance.

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Frequently Asked Questions

What is the difference between a SEZ and an EPZ in Pakistan?+

Special Economic Zones are established under the SEZ Act 2012, administered by the Board of Investment and the provincial SEZ authorities, and are designed for both domestic-market and export-oriented industries. Export Processing Zones are established under the EPZ Authority Ordinance 1980, administered by the EPZ Authority, and are focused on export-oriented manufacturing and services. Both offer customs duty and tax concessions on imported inputs, but the legal framework, the administering authority, and the specific concessions differ. The largest EPZ is the Karachi Export Processing Zone; SEZs are spread across the country including under the China-Pakistan Economic Corridor framework.

What customs concessions does a SEZ or EPZ unit get on imports?+

For a SEZ, the SEZ Act provides exemption from customs duties and taxes on import of plant, machinery, and equipment for zone development and for zone enterprises, and on import of raw materials, components, and other inputs consumed in the production of goods within the zone. For an EPZ, the EPZ Authority rules provide duty-free import of capital goods, raw materials, components, and spare parts. Both regimes require that the goods be used for the approved purpose within the zone, and both impose conditions on the subsequent disposal of goods admitted under concession.

What happens if I sell SEZ-produced goods in Pakistan's domestic market?+

Goods transferred from a SEZ or EPZ into the domestic tariff area of Pakistan lose the zone concessions and are assessed for customs duty and taxes at the rates applicable to the goods and origin at the time of transfer, on the value at the time of transfer. The SEZ enterprise must file an ex-zone goods declaration and pay the assessed duty and taxes before the goods leave the zone. The same principle applies to EPZ-to-tariff-area transfers under EPZ Authority rules.

Can agricultural processing operate in a SEZ or EPZ?+

Yes. Food processing, agricultural commodity processing, and agri-input manufacturing are eligible activities in both SEZ and EPZ frameworks. A rice processing and export facility in the Karachi EPZ, an edible oil refinery in a Punjab SEZ, or a pesticide formulation plant in a SEZ can all benefit from the duty concessions on imported machinery and inputs. The condition is that the enterprise is approved by the SEZ or EPZ authority for that activity and that the imported goods are used for the approved purpose within the zone.

Olympic Agencies

Clearing agricultural cargo - seeds, fertilizers, and machinery - at Karachi Port and Port Qasim since 1982. Members of PIFFA and the Chamber of Commerce.