Notes for Chinese enterprises in Pakistan
Notes for Chinese enterprises in Pakistan
Issues and countermeasures that Chinese-funded enterprises should pay attention to when carry out investment cooperation in Pakistan.
8.1 Overseas Investment
The security situation in Pakistan is grim and terrorist attacks are frequently occur. Especially in recent years, the risk of attacks on the China-Pakistan Economic Corridor project, enterprises and personnel has increased. The Economic and Commercial Office of the Chinese Embassy in Pakistan has reminded Chinese citizens in Pakistan for study or work to be vigilant, strengthen precautions, reduce unnecessary travel and take relevant measures to ensure personal and property safety. In case of emergency, please contact the local police and the Chinese Embassy in Pakistan for help.
【Precautions】
(1) Obey the overall situation.
Chinese enterprises investing in Pakistan should keep in mind the overall situation, take a long-term view, adhere to mutual benefit and win-win situation, strengthen coordination and communication with Pakistani partners, consciously assume necessary social responsibilities, and avoid friction and disputes with local partners or the government, residents and religious groups due to excessive pursuit of commercial interests.
(2) Observe the customs of the place.
Pakistan is an Islamic country. When conducting investment cooperation in Pakistan, not only carefully study local laws and regulations, to be familiar with the local cultural environment and customs, and conduct business legally, but also respect local religious customs.
(3) Safety first.
Before investment, enterprises should carefully investigate the market and seek the advice of the Economic and Commercial Office of the Chinese Embassy (Consulate) in Pakistan to choose a relatively safe place for investment. After investment, localization should be implemented as much as possible to reduce the number of Chinese personnel in Pakistan, and pay attention to strengthen the security of the resident, production and business sites. According to official information released by Pakistan, the security situation in Khyber Pakhtunkhwa province (including the former Federally Administered Tribal Areas) and Baluchistan province is relatively poor, with frequent violent attacks. It is recommended to avoid going there. The northern region is characterized by complex terrain and sparse population, and natural disasters such as landslides, mudslides and avalanches often occur. It is best to arrange and accompany local partners to minimize the length of stay.
(4) Complete management of the whole process.
In the process of carrying out investment, trade, contract projects and labor cooperation in Pakistan, we should pay special attention to investigation, analysis and assessment of relevant risks in advance, do a good job in risk avoidance and management, and effectively protect our own interests. It includes the credit investigation and evaluation of the project or trade customers and related parties, the analysis and avoidance of political and commercial risks in the location of the project, and the feasibility analysis of the implementation of the project itself.
(5) Use good commercial insurance.
It is recommended that enterprises use China's policy-oriented insurance agency - China Export & Credit Insurance Corporation to provide credit risk protection products including political risk and commercial risk in the process of conducting foreign investment and cooperation; Commercial guarantee services provided by policy banks such as the Export-Import Bank of China can also be used. If a risk loss occurs without effective risk avoidance, it should also recover the loss by itself or relevant means as soon as possible according to the loss situation. For the business underwritten by the credit insurance institution, the credit insurance institution shall fix the loss, confirm the claim and compensate the risk loss, and the relevant institution shall assist the credit insurance institution to recover the loss.
(6) Focus on local efficiency.
According to the "2020 Doing Business Report” released by the World Bank, Pakistan is relatively inefficient in some areas. For example, it takes 16.5 days to start a business, compared with an average of 14.5 days in South Asia. It takes 113 days for a new warehouse to get power, compared with an average of 86 days in South Asia; Businesses spend 283 hours a year paying taxes. In addition, during the mass prayer period of Pakistani Muslims from 12:30 to 14:30 every Friday, government offices and general offices are closed or basically unavailable, which to some extent also affects the work efficiency. When dealing with all kinds of matters, investors should try to understand the procedures in advance, prepare sufficient materials and make full preparations.
8.2 Foreign contracted projects
【Precautions】
(1) Operate in accordance with the law.
The staff of Chinese-funded enterprises should conscientiously study the relevant laws and regulations of Pakistan, strictly abide by the relevant regulations of relevant departments of China on foreign project contracting, establish and improve the compliance system, system and process of enterprises' overseas operation, and achieve compliance operation. Contact the Economic and Commercial Office of the Chinese Embassy (Consulate) in Pakistan before bidding, listen to the opinions, and timely file with the Economic and Commercial Office after winning the bid.
(2) Select agents carefully.
When Chinese enterprises carry out contract projects in Pakistan, they usually need to obtain relevant information, participate in bidding (negotiation) and solve problems encountered in the process of project implementation through local agents. Therefore, it is recommended to choose a strong, good reputation and capable agency.
(3) Strengthen the scientific nature of bidding (negotiation) bids.
In the process of bidding (negotiation) for projects in Pakistan, Chinese enterprises should carefully analyze the information provided by the owner, and fully consider the political situation, security, changes in tax policies, inflation, local labor prices and the appreciation of RMB, etc., so as to set aside unforeseen expenses. They should not listen to the one-sided words of the agent and blindly bid at a low price, and they should not make difficult promises on financing and other issues.
(4) Strengthen capacity building in the tax field.
The tax environment in Pakistan is not good, and most Chinese enterprises operating in Pakistan have encountered tax problems of varying degrees. Enterprises should strengthen the internal construction of tax and legal teams, strengthen cooperation with local professional accounting firms and law firms, and enhance their ability to cope with and solve tax problems.
(5) Explore new business models.
Pakistan's infrastructure is backward and construction funds are very scarce. In recent years, many projects require contractors to contract with capital or participate in project investment management. Chinese enterprises should gradually adjust their business thinking and explore new business models such as BOT and PPP (public-private partnership).
(6) Strengthen security precautions.
The security situation in Pakistan is very serious. Chinese-funded enterprises must understand the security situation and prepare for security before participating in the project, and pay attention to production safety during the implementation of the project. While ensuring the quality and schedule of the project, they should strengthen safety education and training for Chinese personnel, enhance safety awareness and strengthen internal safety management.
8.3 Foreign Labor cooperation
Pakistan is a traditional labor exporting country with abundant labor resources, which does not need to be imported from outside. Chinese labor services in Pakistan are mainly managers and technical workers involved in the implementation of projects contracted by Chinese-funded enterprises.
【Precautions】
(1) Select labor personnel with higher quality and better labor skills;
(2) Sign standardized labor contracts with labor personnel in accordance with relevant domestic regulations;
(3) Before dispatch, the labor service personnel must be trained, follow the principle of "no training, no overseas assignment", understand Pakistan's national conditions, religious taboos and social customs, educate the labor service personnel to abide by the law and discipline, especially security work special training, and truthfully inform their working conditions and living environment;
(4) Improve the internal management of the project. The main contractor shall put the subcontractor's dispatched personnel under unified management and responsibility, assign special personnel to be responsible for the management of dispatched labor personnel, keep abreast of their thoughts and solve problems in time.
8.4 How can Chinese-funded Enterprises Build Harmonious Relationships in Pakistan
8.4.1 Handle the well relationship with the government and parliament
To achieve long-term development in Pakistan, Chinese enterprises need to establish harmonious and friendly relations with the parliament and local governments at all levels.
(1) To have an in-depth understanding of the organizational structure of the federal government and the local government, the relevant responsibilities of each department and policy provisions;
(2) Keep close contact with governments at all levels, publicize the achievements made by enterprises in Pakistan and their contributions to the local economy and society, appropriately reflect the difficulties, and ask the local government to help solve them;
(3) To make friends extensively and deeply, actively make friends with people from all walks of life and all walks of life, unite and make use of all forces conducive to the development of the enterprise;
(4) If enterprises do business or contract projects in the Cape Province and tribal areas, they should seek the support of local tribal leaders and interest groups in addition to the local government and relevant departments.
8.4.2 Properly handle the relationship with the trade union
Chinese-funded companies must properly handle their relations with local trade unions to achieve long-term development in Pakistan.
(1) Know the law and abide by it: Chinese-funded enterprises should fully understand the provisions of Pakistan's Labor Law and Industrial Relations Law on employment, dismissal and social security, conclude contracts with local employees in accordance with the law, pay wages and subsidies in full and on time, pay pensions and social security funds for employees in accordance with regulations, and provide necessary skills training for employees. Eliminate forced labor, overtime and child labor. Termination of the employment contract shall be notified in advance and compensation shall be paid.
(2) Active guidance: According to the law of Pakistan, the trade union organization can be established within or outside the enterprise. It is suggested that Chinese enterprises take the initiative to set up trade unions in their own enterprises to facilitate communication and coordination. In addition, trade union members can be invited to participate in enterprise management and actively guide them to become an effective force for the healthy development of enterprises.
(3) Avoid estrangement: When Chinese-funded enterprises conduct investment cooperation in Pakistan, they should select personnel with strong foreign language skills and high quality to work in Pakistan, so as to avoid estrangement between employees of both sides due to differences in nationality, language and culture.
(4) Harmonious development: Chinese-funded enterprises in Pakistan should strive to create a harmonious corporate culture, understand the demands and ideological dynamics of local employees through the labor union, try to meet the reasonable requirements of employees, and consider promoting a group of middle-level managers from local employees, and gradually cultivate the sense of responsibility and belonging of employees.
8.4.3 Close relationship with local residents
China and Pakistan enjoy long-standing friendship. The Pakistani government and people welcome Chinese enterprises to invest in Pakistan to promote employment and economic development. Chinese enterprises in Pakistan should make full use of this advantage and actively build harmonious relations with the local society and people.
(1) Understand the local social conditions. Have a in-depth understanding of the local social composition. If there are local tribes, religious forces, big families or interest groups, they should actively establish relationships with them and win their support for investment and operation activities in the local area.
(2) Be nice to others. The Pakistani people are very friendly to China. When they meet the Chinese people, they will take the initiative to greet them, shake hands and take photos. They often say "Long live China-Pakistan friendship" and "brothers". Chinese-funded enterprises and personnel should respect Pakistani folk customs and religions and pay attention to friendly expressions.
(3) Localization of operation. Enterprises should recruit local employees as much as possible to promote local employment, and provide necessary vocational skills training for employees to improve the quality of local labor force.
(4) Give back to the community. Understand the hot and difficult issues of local people's concern, actively participate in community public welfare undertakings,
8.4.4 Respect local customs
(1) Respect local religious beliefs and customs. Pakistan is an Islamic country, try to avoid prayer time when interacting with local people, do not disturb the local people to pray, let alone stop to watch. Do not place the Koran and related religious books arbitrarily. If you need to move or clean the books and objects, please ask local employees to follow local religious customs to avoid misunderstanding.
(2) Respect local customs. Don't talk loudly in public; Local dress is more conservative, women should wear sleeved clothes, do not wear skirts or clothes too revealing; Do not take the initiative to take pictures with local women or little girls, let alone secretly; It is considered very impolite to stare at women, especially those in black robes; Men and women should avoid intimacy in public; Commercial advertisements in some areas do not allow the appearance of female models. If an advertisement involves female models or female products, be sure to communicate with local advertising companies or media in advance.
8.4.5 Protect the ecological environment according to law
When conducting investment and cooperation in Pakistan, Chinese enterprises should fully understand relevant laws and regulations, scientifically assess the pollution discharge of the project and its possible impact on the environment, and formulate targeted solutions.
In addition, manufacturers are required to submit regular environmental monitoring reports to local environmental protection authorities. In the process during the implementation of the project, care should be taken to borrow soil from farmland, mountain and river gully beside the road.
8.4.6 Undertake necessary social responsibilities
Chinese-funded enterprises in Pakistan should actively shoulder social responsibilities to achieve sustainable development in the country.
(1) Integrity management.
We will put an end to the production and sale of fake and shoddy products, resolutely resist commercial bribery and other violations, pay relevant taxes and fees on time and in full, and prevent tax evasion and other activities.
(2) Safe production.
Chinese-funded enterprises should establish a production safety mechanism, strengthen production safety management, and enhance the awareness of the main responsibility of production safety. The security situation in Pakistan is relatively grave. Enterprises need to strengthen security, improve production safety precautions, avoid production safety accidents and effectively protect the lives of their employees.
(3) Help develop the local economy.
Support the development of local upstream and downstream enterprises, improve their technical level and competitiveness, while seeking their own development, help local cultivate a number of enterprises with international standards.
(4) Cultivating talents.
In addition to the staff training obligations stipulated by the Pakistani government, Chinese-funded enterprises should also try their best to provide vocational training opportunities for their Pakistani employees and the surrounding unemployed labor force, so as to help them cultivate a group of skilled personnel with good labor skills.
Actively participate in local social welfare undertakings and fulfill corporate social responsibility; We took an active part in post-disaster reconstruction. We can cooperate with the Pakistan Foundation for Poverty Alleviation (PPAF), the social welfare Bureau of Pakistan Bait-ul-Mal and other organizations to carry out public welfare activities.
8.4.7 Know how to deal with the media
Pakistan's media enjoy a high degree of freedom of expression and have great influence. Chinese-funded companies should properly handle their relations with local media.
(1) Communication channels.
Chinese-funded enterprises should set up special departments or appoint special personnel to maintain good communication with local media. Invite friendly media to visit and interview the company as appropriate, so as to enhance their understanding of the enterprise.
(2) Pay attention to publicity.
Enterprises should increase their publicity efforts and actively publicize key points of projects and public welfare activities to create a good public opinion environment for enterprises. If some media make unfair or inaccurate reports on the company, it should be clarified through the media or mainstream media as soon as possible to avoid unnecessary pressure from public opinion.
(3) Interview with Caution
In case of interview request from local media, enterprises can ask them to provide interview outline first and reply after research. If the interview is politically or militarily sensitive, explain to the media and decline. Most large Chinese-funded enterprises in Pakistan maintain contact with major media through local media agencies, and collect and release news through a third party to reduce their direct contact with the media.
8.4.8 Learn to deal with law enforcement officers
If local police, customs, tax and other law enforcement departments check relevant documents, inquire about relevant matters or search certain places in accordance with the law, the Chinese personnel present should actively cooperate.
Chinese personnel should carry their passports and ID cards with them, properly keep their business licenses, tax payment certificates and other important documents and make double copies. If inspected by law enforcement officers, they should show them politely and answer relevant questions calmly. If you do not have a certificate, do not deliberately avoid, should take the initiative to explain the identity, if the other party needs to verify the relevant information, you can provide the company's contact information. If law enforcement officers want to search the company or residence, they should ask them to present their certificates and search certificates, ask them to contact their Chinese lawyers and report to the Chinese Embassy (consulate) in Pakistan immediately.
If the documents or property are confiscated by the law enforcement officers, the law enforcement officers shall be required to issue a written confiscation list as evidence, and record the police number, certificate number and vehicle number, and at the same time immediately report to the Chinese embassy (consulate) and the company in Pakistan, do not have a direct conflict;
If law enforcement officers want to fine, do not pay cash on the spot, but should ask it to issue fine documents, to pay the bank; If law enforcement officials want to detain or arrest Chinese personnel, they should immediately notify the Chinese Embassy (consulate) in Pakistan.
8.4.9 Spreading Chinese traditional culture
A favorable international public opinion environment helps a country's development, while the opposite is a hindrance. In today's highly globalized world, it is very necessary to promote the spread of traditional Chinese culture to the outside world. At present, China is facing a very complex international public opinion environment. "Going global" enterprises should have the sense of responsibility, confidence and ability to tell Chinese stories well in the local area, spread Chinese traditional culture, and fully demonstrate the image of China's prosperity, development, democracy, progress, civilization and openness.
Pakistan is adjacent to China, a route along the ancient Silk Road and a major country along “the Belt and Road”. In particular, Pakistan is close to the traditional culture of China's Xinjiang region in terms of religion and culture. Therefore, on the one hand, in the internal management of Chinese enterprises in Pakistan, they should learn to carry out civilized dialogue and exchange between Chinese stories, Chinese traditional culture and Muslim religious culture, especially to create a friendly, inclusive and harmonious atmosphere among employees. On the other hand, in external development, it is necessary to use the platform of public diplomacy to actively establish the corporate culture of Chinese-funded enterprises living in harmony with local areas rather than competing for profits, develop business and make friends with the cultural charm of Chinese-funded enterprises and Chinese people, and spread Chinese culture through actions. Chinese-funded enterprises may jointly hold various cultural promotion activities with local Confucius Institutes and other institutions to not only showcase their enterprises but also spread Chinese culture; Enterprises with conditions, some Pakistani employees or university students can be selected and sponsored to visit China to learn Chinese traditional culture on the spot and train local reserve talents.
8.5 How do Chinese-funded enterprises/personnel seek help in Pakistan
8.5.1 Seeking Legal Protection
When Chinese-funded enterprises start their business in Pakistan, they can hire well-known lawyers through the Chinese Embassy (consulate) in Pakistan, and local government departments to serve as corporate legal advisers to assist them in handling legal affairs involved in the process of production and operation so as to manage their operations in accordance with the law. If the enterprise is involved in economic disputes or is treated unfairly, it should inform the legal counsel in time and solve the problem through legal means to protect its own interests.
8.5.2 Seeking Help from the Local Government
When conducting investment and cooperation in Pakistan, Chinese enterprises need to establish close contact with relevant departments of the local government, timely report the development of the enterprises, report the problems encountered and seek more support from the local government.
8.5.3 Obtain protection from the local Chinese Embassy (consulate)
(1) Consular protection.
The Chinese embassies (consulates) in Pakistan can provide assistance to Chinese citizens and legal persons as follows: Provide information on international travel safety, assist in hiring lawyers and interpreters, visit detainees, assist in the evacuation of dangerous areas, assist in the search for relatives and friends in Pakistan or notify relatives in the country, To issue, replace and reissue travel documents and to annotate relevant information on travel documents for Chinese citizens residing legally, to issue travel permits or certificates of return to China for Chinese nationals who have lost or have no travel documents, notarize and certify documents, etc.
(2) The division of consular districts.
The territory of the Chinese Embassy in Pakistan (pk.china-embassy.org/chn) covers the capital Islamabad, Khyber Pakhtunkhwa Province, Gilgit-Baltistan (GB) region and Pakistan-controlled Kashmir region, and the Consulate General of China in Karachi (website: Karachi.chineseconsulate.org/chn) consular district covers sindh and balochistan, Chinese ambassador to Lahore consulate general (http://lahore.china-consulate.org/chn) consular district of punjab province. Chinese citizens may request consular protection and services from their embassies or consulates according to their place of residence.
(3) Function of the Economic and Commercial Department.
The Economic and Commercial Section of the Chinese Embassy in Pakistan is an integral part of the Chinese Organization in Pakistan. It is responsible for implementing the policies and development strategies of China's foreign trade and economic cooperation, organizing, coordinating and managing various economic and trade activities of Chinese-funded enterprises in Pakistan and promoting bilateral economic and trade cooperation. Before entering the Pakistani market, Chinese enterprises shall seek the opinions of the Economic and Commercial Office of the Chinese Embassy in Pakistan, and report to the Economic and Commercial Office for the record in a timely manner after completing the procedures for domestic and foreign investment cooperation as required. Please keep in touch with the Economic and Commercial Office of the Chinese Embassy in Pakistan during daily production and operation. For more information, please visit to the website: pk.mofcom.gov.cn
8.5.4 Establish and activate emergency plans
(1) Comprehensive assessment.
Before conducting investment cooperation in Pakistan, Chinese-funded enterprises should conduct on-site visits, make a comprehensive and objective assessment of potential risks in the political situation, security, public security and construction, set up targeted internal security early-warning mechanisms and emergency handling mechanisms, and set aside security funds.
(2) Strengthen safety education.
In the daily production and operation process, strengthen the safety education of employees, strengthen the safety prevention and construction safety awareness; Special personnel are assigned to take charge of production safety management and security work, and regular simulation exercises are conducted to deal with emergencies.
(3) Start the emergency plan.
In case of natural disasters, man-made safety accidents, terrorist attacks or other emergencies, enterprises should immediately activate emergency plans and report them to the Chinese Embassy in Pakistan and the domestic headquarters of the enterprises.
Emergency contact information of relevant agencies:
Chinese Embassy in Pakistan: 0092-51-8355059 (phone), 0092-300-5015865 (phone)
The Economic and Commercial Office of the Chinese Embassy in Pakistan: 0092-51-2610824 (Tel), 0092-315-8508858 (mobile)
Local emergency contact information: Police 15, Fire 16, ambulance 115.
8.5.5 Other Countermeasures
Contact with the local Chinese-funded enterprise association, and actively join the association. The specific contact information is as follows:
Contact number of China Association of Chinese-Funded Enterprises in Islamabad: 0092-51-2251986
China Association of Chinese-Funded Enterprises in Lahore Tel: 0092-42-35691301
China Association of Chinese-Funded Enterprises in Karachi Tel: 0092-21-35208958
