Yousaf Amanat & Associates

FOR IMMEDIATE RELEASE Yousaf Amanat & Associates Advises MBC Game Studio on Cross-Border Contractor Risk Across Its Pakistan-Based Creative Team Firm's integrated review for the Saudi-headquartered developer highlights the tax, employment and IP exposure game studios face when building distributed creative teams   KARACHI, Pakistan — Yousaf Amanat & Associates today announced it has advised MBC Game Studio Limited, a Saudi Arabia–headquartered video game developer, on a multidisciplinary legal review of its service provider agreements with Pakistan-based creative talent. The engagement covered employment classification, intellectual property assignment, cross-border tax exposure and data protection — the core legal issues facing game studios that build distributed teams of writers, artists and designers across borders. The review examined MBC's arrangements with a senior Pakistan-based writer and surfaced considerations relevant to any studio engaging remote contractors in the region: the risk of inadvertently creating a taxable “permanent establishment” through a long-running, deeply integrated contractor relationship; exposure once contractor fees cross thresholds set by Pakistan's tax treaties; and the importance of intellectual property and moral-rights provisions that hold up cleanly across differing legal systems. The firm worked with MBC to address each issue within its existing contract framework. “Studios are hiring writing, art and design talent globally, and that creates legal exposure most don't see until it becomes a problem,” said Yousaf Amanat, Principal at Yousaf Amanat & Associates. “We work with studios like MBC to get tax, employment classification, IP and data protection right from the outset, so the studio can keep hiring the best talent wherever it sits, without the engagement becoming a liability later.” Yousaf Amanat & Associates said it is expanding its advisory practice for gaming and interactive entertainment companies that engage contractors and remote talent in Pakistan and the broader region, drawing on this and similar engagements.   About Yousaf Amanat & Associates Yousaf Amanat & Associates advises gaming and technology companies, and the contractors and businesses they work with, on cross-border commercial, employment, tax and intellectual property matters arising from international engagements. Media Contact Sahar Riaz Yousaf Amanat & Associates [email protected]

There are various Chinese companies working in Pakistan. A lot of these companies are working on infrastructure projects involving constructions of Power Projects, Dams and Highways. These companies then further contract out parts of the work involving designing and engineering of the works to other companies who are resident in China. A legal proposition arises when these companies are tasked with deducting tax from payments to Chinese resident companies under the Income Tax Ordinance 2001.  The Chinese resident companies rightfully object since they are already being taxed under China’s own tax regime and additionally being taxed under the Pakistan tax regime appears unfair to them. China and Pakistan both are signatories to the Agreement between Peoples Republic of China and the Islamic Republic of Pakistan for avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Evasion of Taxes. This tax treaty was signed in 1989 and specifically deals with the issues of double taxation. We are however surprised to find that most Chinese companies are either not aware of this treaty or have not given it the due consideration they ought to have. Even if the Chinese Companies refer to the Treaty for relief, the problem of interpretation of the articles which they are faced with leads them astray. For the purposes of this paper we have tried to demonstrate this problem of interpretation and also the mechanism which may be employed to resolve it. The Treaty Article 1 of the Treaty provides that it shall apply to persons who are residents of one or both of the Contracting States. Article 2 (2) provides that it shall apply to income tax in Pakistan and China. Article 3 defines Contracting States as meaning China or Pakistan as context so requires. Article 4 for the purposes of the Treaty defines the term Resident as a person who under the laws of that Contracting State is liable to tax therein by reason of his domicile, residence, place of head of office or effective management or any other criteria of a similar nature. The interpretation of Article 13 (2) Article 7 provides that the profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State. Article 15 provides that income being derived from a resident of a Contracting State shall only be chargeable in that Contracting State unless it the beneficial owner of the fees also has a place of establishment or base in the other Contracting State. Article 13 (1) provides that Fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State. Article 13 (2) provides that such fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner thereof, the tax so charged shall not exceed 12.5% of the gross amount of the fees. Article 13 (4) provides that the provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the contract in respect of which the fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such cases the provisions of Article 7 or Article 15, as the case may be, shall apply. Where as Articles 7 , 13 (1) and 15 in our opinion are clear that taxation on the fees being paid to a resident shall only take place in the country of which the beneficial owner of the fees is a resident, the problem arises from the interpretation of Article 13 (4). Article 13 (4) provides that the provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the contract in respect of which the fees for technical services are paid is effectively connected with such permanent establishment or fixed base. A plain reading of Article 13 (4) would make it clear that it nullifies the effect of Article 13 (1) if the resident of China also has a business establishment in Pakistan. But Article 13 (4) also provides that it shall nullify the effect of Article 13 (2) which provides that such fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner thereof, the tax so charged shall not exceed 12.5% of the gross amount of the fees. The Litmus Test for Article 13 (2) The legal proposition which arises then is that under the Treaty will the services be taxed in China or Pakistan? Our interpretation is that the name of the Treaty provides that it has been signed specifically to avoid the issue of double taxation. Where as Article 7, 13 (1) and 15 are clear that such fees shall only be taxed in China, the question of interpretation of Article 13 (4) read with Article 13 (2) can be resolved by the litmus test of whether the Chinese resident company also has a place of establishment in Pakistan or not. If it does it will be taxed in Pakistan too under Article 13 (2) and if it doesn’t it will be taxed only in China under articles 7, 13 (1) and 15 of the Treaty. The Relief provided by the Treaty When confronted with a problem regarding the interpretation of the Articles of the Treaty, it is important in our opinion to see the purpose for which the Treaty has been signed which is the avoidance of double taxation. Since the Treaty’s main purpose is the avoidance of double taxation, in our opinion this prime purpose is which the Treaty will try to first achieve followed secondly by exceptions where the Treaty in fairness will accord benefit to the revenue collection of Pakistan where the Chinese company is also operating a place of business in Pakistan.

The Firm was recently engaged by Serioplast Italy a global manufacturing company for plastics. The Firm advised the company on a variety of matters including employment law, tax, matters concerning the State Bank of Pakistan and Customs issue. The fact that the Firm was able to advise on matters straying from its forte of employment law shows how the various practices of the Firm have grown. The employment law matter included conducting the investigation of an upper management employee, gathering evidence against the employee and preparing documentation for the termination of the employee. The tax part of the advice focused on review of tax returns for filing of refunds. The matter concerning the State Bank of Pakistan centered on advice regarding repatriation of foreign funds under the prudential regulations and finally the customs issue involved a review of relevant import and export laws relating to export of machinery out of Pakistan.

INTRODUCTION The Prevention of Electronic Crimes Act 2016 or more commonly known as the PECA presently appears to be Pakistan’s answer to all things related to the internet and cyber space. In an era where digital technology permeates every aspect of life, the rise of cybercrime presents a significant challenge for governments worldwide. Pakistan addressed this growing concern by enacting the PECA. The law was introduced to provide a legal framework for combating cyber threats, protecting citizens online, and regulating digital space. PECA was designed to tackle a wide range of cyber-related offenses. These include: Cyberstalking and harassment Hacking and unauthorized access to data Cyber terrorism and hate speech Child pornography Online impersonation and defamation Electronic fraud and identity theft  DATA PROTECTION NOT COVERED UNDER PECA PECA is primarily a criminal law — it focuses on punishing offenses like hacking, cyberstalking, or hate speech, rather than establishing comprehensive data protection standards. It lacks: A framework for data privacy rights. Obligations for data handlers (both public and private) to secure user data. Mechanisms for individuals to control how their data is collected, processed, or shared. Without proactive requirements, the law remains reactive — addressing breaches after they happen rather than preventing them. THE PERSONAL DATA PRORECTION BILL 2023 The Personal Data Protection Bill 2023 (PDPB) as opposed to the PECA is a regulatory law. PECA being a criminal law is a reactive law not a preventive law. Regulatory law works towards prevention rather than reaction and that is precisely why regulatory law as opposed to criminal law is better suited to governing data protection and preventing data breaches. PECA is more about punishing cybercrimes, while the PDPB is about regulating data use and protecting privacy. PECA often deals with offensive content and digital threats, whereas the PDPB is about rights, consent, and ethical data use. The PDPB focuses on: Creation of the data protection authority Concept of consent and the power to withdraw the same Data processing and localization Data breach notification Cross border data transfers Data Controllers CONCLUSION In an increasingly digital world, where personal information is constantly being collected, shared, and stored, the PDPB is a necessary and overdue step toward protecting the privacy and rights of Pakistani citizens. Without a clear legal framework, individuals remain vulnerable to data breaches, identity theft, unauthorized surveillance, and corporate misuse of their personal information. The bill not only empowers individuals with greater control over their data but also sets standards for how public and private entities must handle personal information responsibly. As digital economies grow and global data regulations tighten, Pakistan needs this legislation to build public trust, attract international investment, and safeguard its digital sovereignty. Properly implemented, this bill can lay the foundation for a secure, transparent, and rights-based digital future. While the Prevention of Electronic Crimes Act (PECA) addresses critical issues like cybercrime, online harassment, and digital offenses, it is not a comprehensive solution for data protection. PECA primarily focuses on punitive actions against cybercrimes and the regulation of online behavior, but it lacks the framework necessary to protect individual privacy and regulate the collection, processing, and storage of personal data. Unlike a data protection law, PECA does not offer citizens explicit rights over their personal data, such as the right to access, consent to, or request the deletion of their data. Furthermore, PECA does not establish clear obligations for organizations on how to handle sensitive data securely. As a result, while PECA is essential for ensuring online safety and preventing electronic crimes, it falls short of the detailed, privacy-centric protections needed in the digital age. Thus, a dedicated data protection law is critical to safeguard individuals' data privacy rights and ensure responsible data handling by both public and private entities.

FOR IMMEDIATE RELEASE Yousaf Amanat & Associates Advises UK-Based Virtual Finance Company on Pakistan’s New Virtual Assets Regime Recent engagement covers licensing, foreign exchange, data protection and AML/CFT compliance for a stablecoin-enabled remittance product Islamabad – Yousaf Amanat & Associates has recently advised a UK-headquartered virtual finance company on the regulatory path for launching a stablecoin-enabled remittance product in Pakistan under the Virtual Assets Act, 2026. The engagement required the firm to work across several regulatory regimes at once: •      Virtual Assets Act, 2026 and PVARA: mapping the product against the Act’s ten licensable service categories, testing “non-custodial” claims against the Act’s substance-over-form approach, and working through the No-Objection Certificate process and the transitional deadline for existing providers. •      Foreign exchange and State Bank of Pakistan regulation: a virtual asset licence does not by itself authorise the fiat leg of a cross-border transaction. The advice addressed how the Foreign Exchange Regulation Act, 1947 and the SBP framework interact with the new regime, including SBP’s recent circular on banking access for virtual asset providers. •      Regulatory sandbox: the sandbox’s practical scope is narrower than its early announcements suggested, so the advice set realistic expectations on availability and timing. •      Data protection, AML/CFT and cybersecurity: the customer-data, monitoring and record-keeping obligations that apply alongside standard data protection compliance. “International businesses entering Pakistan’s virtual assets market often assume one licence answers every question. In practice, virtual asset licensing, foreign exchange compliance and data governance have to be worked through together, and the framework is still evolving,” said Yousaf Amanat, Managing Partner at Yousaf Amanat & Associates. “Our practice combines virtual assets expertise with deep experience in data protection and cybersecurity law, which is where much of the real compliance risk sits.” About Yousaf Amanat & Associates Yousaf Amanat & Associates is a Pakistan-based law firm with offices in Islamabad and Karachi. The firm has a particular focus on data protection, cybersecurity and emerging technology law, including virtual assets regulation. House No. 435, Street No. 01, Sector F-11/1, Islamabad  |  Tel: 051-2290109 Media contact Sahar Riaz  |  [email protected]  |  +92-51-2290109

By Yousaf Amanat, Yousaf Amanat & Associates Many foreign companies build their Pakistan operations the same way. A team of engineers and coordinators works from a shared office, each person on a fixed monthly fee, with a company email address, often paid through a global payments platform. No local entity is set up and no employment contracts are signed. The arrangement is cheap, quick and, on paper, tidy. Our recent diligence work on a cross-border acquisition showed how many exposures sit behind that tidiness: misclassification, tax presence, intellectual property and data. Contractors in name, employees in law Labour law in Pakistan is provincial. In Punjab, the Punjab Labour Code, 2026 defines a worker broadly, extending it to contractors, agency workers and people engaged indirectly. It also lets a principal be treated as the employer where an arrangement operates as a device to deprive workers of their rights, where the workers perform the principal's core operations, or where the principal controls the means and method of the work. An indefinite engagement, a fixed monthly fee, core-business duties and reserved control over place, equipment and communications tick most of those boxes before a single fact is investigated. A company's own statement that the team is treated as employees is direct evidence of control. Employee-style benefits such as leave, a thirteenth month and annual increments, offered while statutory contributions are withheld, can be read as the very device the Code targets. A foreign governing law and forum clause is unlikely to displace mandatory labour and social security law for work performed in Pakistan by Pakistani residents. Individual claims may nonetheless be unlikely. Contractors enjoy a concessional tax regime for IT exports and are often content with their benefits. The sharper risk is an inspector from a pension or social security body visiting the shared office, classifying the team as employees and demanding back-dated contributions. That risk needs no complaint from anyone. It is the strongest argument for ensuring the team does not work from an office in Pakistan. The permanent establishment trap Under section 2(41) of the Income Tax Ordinance, 2001, a foreign company can have a permanent establishment through a fixed place of business, a dependent agent who habitually concludes contracts, or services furnished through personnel engaged for that purpose. A sizeable team with a permanent presence doing integral work from a shared location puts a services permanent establishment squarely in view. The consequences are largely retrospective: tax on profits attributable to Pakistan, tax registration, registration as a foreign company with the Securities and Exchange Commission of Pakistan, and liability, with penalty and default surcharge, for tax that should have been withheld on every payment to the team. Quantifying the exposure is for the authorities, who would typically require returns for each year in question before deciding what to levy. Companies should not assume a comfortable cap or look-back period. Who owns the code? The author of a work is its first owner under the Copyright Ordinance, 1962. A commissioned-work exception is narrow and does not reach software, and Pakistan has no general work made for hire doctrine for contractors. Ownership therefore depends on a written, signed assignment. Several gaps appear in practice. Work by a substitute or subcontractor is not covered by the contractor's own assignment. The Ordinance limits an author's assignment to ten years whatever the contract says about perpetual rights. If individuals are later reclassified as employees, first ownership may shift to the employer. Departed developers often leave without signing anything, and undisclosed open-source or prior code can quietly contaminate a product. Registration is optional and involves public advertisement and a copy on the public record, which can weaken trade secret protection for source code. Contractual assignments and confidentiality usually serve better. Contracts of this kind should also carry attesting witnesses, because Article 17(2)(a) of the Qanun-e-Shahadat Order, 1984 requires attestation of written instruments creating financial or future obligations. Data Pakistan has no general data protection statute in force and no general restriction on transfers abroad, though the Prevention of Electronic Crimes Act, 2016 criminalises unauthorised access to data. Contractual confidentiality and device security standards are the practical safeguards, and a pending data protection bill may change the picture. Devices holding company data should be encrypted. The paper arrangement problem The worst position is a payments or employment platform that contracts with the team on paper while the company continues to direct them as employees. That mismatch between documents and conduct may be treated as evidence of a device, and an interposed intermediary that does not genuinely manage the team may be treated as an employment agency whose workers become the company's employees. How to counter the risks Two sound routes exist. The first is to make the contractor model real. The platform's local entity acts as agent of record and contracts directly with each individual, while the company contracts only with the platform. Work is defined by deliverable-based, time-bound statements of work. Control over manner, means, place, equipment and monitoring is removed. Contractors use their own equipment and workspace, and no company-run office exists in Pakistan. Non-company email addresses are used, instructions are framed at service level and independence is reviewed annually. Intellectual property and confidentiality obligations then run back to back from each individual through the platform to the company, with security standards and indemnities for any failure in the chain. The second route is conversion to employment, which adds social security, minimum wage, leave and termination costs and may meet resistance from people who value contractor tax treatment. Neither route cures past exposure, and even a genuine structure mitigates rather than eliminates risk. Acquirers should therefore review every individual agreement, obtain confirmatory assignments from current and former contributors, run open-source scans, and seek warranties, specific indemnities or retentions for historic exposure. The principle running through all of this is simple: in Pakistan, substance beats paper. This article is for general information and is not legal advice. Specific advice should be taken on any particular arrangement.

The Prevention of the Electronic Crimes Act (Amendment) Act 2025 has been promulgated. Under the Act a social media regulatory authority is to be formed which will regulate social media platforms in Pakistan. The authority shall also proceed on complaints against social media platforms. The duty for censuring social media platforms and licensing social media platforms shall also rest with authority. The Act also calls for the formation of specialized social media tribunals for hearings against malicious use of social media. Spreading of false news has been made punishable with imprisonment of 03 years and a fine of up to PKR 2 million. Under the Act an investigation agency by the name of National Cyber Crime Investigation Agency (NCCIA) shall be formed for inquiry, investigation and prosecution under the Act.

The Firm has been engaged by Chine Three Gorges Corporation to advise its hydel power project in Pakistan. The advise focuses on matters of labour law including advising the corporation on how best to handle its disputes being adjudicated by the office of the ombudsperson for disputes of the World Bank. The Firm has been chosen by the corporation based on its experience of handling projects by World Bank particularly in he field of Labour Law. The Firm will also be advising the corporation on Unions, workplace disputes and working conditions.

In March 2022, Pakistan reached a landmark agreement with Barrick Gold and its partners to reconstitute the Reko Diq copper-gold project in Pakistan’s province of Balochistan. This settlement ended years of legal dispute, including a massive arbitration award against Pakistan, and opened the door to what the authorities hope will be a new era of large-scale mining and foreign investment in the country. For investors, this marks more than just a single project: it signals that Pakistan is seeking to rebuild trust, reform its investment-regime, and provide clearer guarantees for foreign capital. What Has Changed for Investors Legislative Protections The federal government passed the Foreign Investment (Protection and Promotion) Act 2022 which grants approved foreign investments strong protection. According to one summary, “The bill… protects investors from unnecessary court proceedings” and offers a framework for foreign investment protection. Under the 2022 Act and related policies, approved investors may receive incentives, and those incentives are to be immune from subsequent revocation by legislature or judiciary. These incentives include exemptions from taxes and no questions asked repatriation of foreign exchange. The The Pakistan Investment Policy 2023 further provides that foreign and domestic investors shall be treated on a “no less favourable” basis, that expropriations must be for public purpose, non-discriminatory, with adequate compensation, and that investments may freely transfer returns in a freely usable currency. The dreaded privatization or government takeover of projects has also been completely ruled out via the 2022 Act. The introduction of an extremely friendly Mines and Minerals Act 2025 for the resource rich province of Balochistan which replaces the earlier stricter Balochistan Minerals Rules 2002 makes it easier to apply for licenses and leases. Reforms within the judiciary although not mining or investment specific have ensured that the superior courts will not be able to act arbitrarily as they had done in the Reko Diq case. Institutional Reform and Facilitation The creation of the Special Investment Facilitation Council (SIFC) brings together civilian and military leadership, provincial chief ministers and the army chief to fast-track and oversee major investment projects. The government has also signalled that the minerals sector (including in Balochistan) is now a high-priority investment sector — following the Barrick settlement the government “accelerated mining in Chagai after Barrick Gold settlement”. Security Assurance and Risk Mitigation In April 2025 the army chief publicly promised that the army “will ensure a robust security framework … proactive measures to protect the interests and trust of partners and investors.” The involvement of the military via SIFC and national security institutions makes clear that investment, especially in sensitive sectors like mining, is being treated as a national-security priority — thereby reducing one category of risk (conflict/insurgency) for investors. Why These Changes Matter The settlement with Barrick effectively cleared a major roadblock in the world’s view of Pakistan’s investment climate: namely, risk of contract repudiation, regulatory reversal, or unresolved arbitration. By codifying protections and having senior officials (including military) lend credibility to the investor‐safety framework, Pakistan is sending a signal that it wants to attract “anchor” investors and large capital projects. For sectors like mining — which require large upfront capital, long time-horizons, complex logistics and significant risk exposure — the combination of legal guarantees + security assurances is important for investor calculus. The Role of the Army and Security Architecture The army’s role in Pakistan’s investment push is unusual compared to many other countries, and for good reason: many major investment projects (mining, infrastructure, energy) lie in regions with security risks (insurgency, terrorism, remote terrain). Hence: The army chief’s statement underscores that security is no longer a peripheral matter but central to the government’s investment strategy. The SIFC formally incorporates the army chief into the decision-making/oversight body for investments. This means that from project approval through implementation, there is likely to be a dedicated security/investment interface. For foreign investors, knowing that the country’s security forces are explicitly tasked with protecting their investments diminishes (though does not eliminate) fears of disruption, expropriation under cover of insecurity, or withdrawal of state protection. Considerations and Remaining Risks While the reforms are promising, investors should remain cognizant of the following: Security assurances are helpful but the underlying environment (especially in Balochistan) remains challenging — insurgency, militant attacks, geostrategic volatility are non-trivial, and any large investment will still require mitigations. Macro-economic factors matter: currency volatility, debt burden, governance capacity, provincial vs federal coordination — all remain relevant risks. Local/community engagement and social licence to operate remain crucial. Even with strong state protections, local resistance or disruption can derail projects if underlying grievances are ignored. Conclusion The Barrick Gold settlement marks a significant inflection point in Pakistan’s investment story. With new legislation, institutional reform, and tangible security assurances (including from the military), Pakistan is making a concerted bid to become reasonably investor-friendly — especially in capital-intensive sectors like mining. For investors, this means that Pakistan may now offer a more stable risk-reward calculus than in the recent past. However, the reforms should be viewed as enabling conditions — not guarantees. Careful site-specific due diligence, robust risk-mitigation planning (particularly around security and community engagement), and structuring for macro-economic contingencies will continue to be important. For those considering entering Pakistan’s mining or resource sectors, the message is: the door is more open than before. But success will depend on how well you navigate the complex terrain (both literal and institutional) that remains.

The Firm recently secured a victory for an oil and gas service provider company headquartered in the US with operations in Pakistan in USD 1 million tax claim filed against the company in Islamabad, Pakistan. The company is one of the largest companies in the world for oil and gas services with operations in more than 75 countries. The Commissioner for Income Tax had held that the Company owed the Government of Pakistan Federal Excise Tax in the sum of approximately USD 1 million. Yousaf Amanat & Associates on behalf of the Company filed a reference before the Islamabad High Court challenging the verdict of the tax authorities. The Firm successfully demonstrated before the court that the Commissioner Income Tax had abused his powers by interpreting a license agreement as a franchise agreement and thereby levying federal excise tax incorrectly on the company. The stellar performance by the Firm’s tax and litigation department led to the High Court remanding the matter back to the tax authorities to examine on a question of law.

Yousaf Amanat & Associates Advises on Pakistan Aspects of US Investment in Healthcare Technology Company The firm acted as Pakistan counsel alongside a large US-based law firm, covering due diligence, tax and permanent establishment, employment, intellectual property and transaction insurance. Islamabad / Karachi: Yousaf Amanat & Associates has recently advised on the Pakistan-law aspects of a growth equity investment by a US-based private equity investor specialising in software businesses in a US healthcare technology company. The company provides care management software to home care providers. Yousaf Amanat & Associates worked alongside a large US-based law firm, which acted as US counsel on the transaction. The company relies on a Pakistan-based technology and operations team. That put Pakistani tax, employment and intellectual property law at the centre of the investor’s diligence and of how the deal allocated risk. Scope of the mandate The firm’s work covered every Pakistan aspect of the transaction: •       Legal due diligence. Reviewed the company’s Pakistan-based operations and the arrangements under which its team is engaged. Prepared the Pakistan due diligence memorandum for the transaction parties. •       Tax and permanent establishment. Advised whether the team’s activities could create a taxable presence for the company in Pakistan under the Income Tax Ordinance, 2001 and the relevant treaty provisions. Advised on related Pakistan tax matters. •       Employment. Advised on how the engagement model is characterised under Pakistani labour law, and on options for structuring the team in future. •       Intellectual property. Gave a legal opinion on who owns the intellectual property the team creates. It covered chain of title under the Copyright Ordinance, 1962 and the Patents Ordinance, 2000, whether that work can be registered, and how it can be enforced in Pakistan. •       Transaction insurance. Drafted the Pakistan-law letter for the transaction’s insurers. Due diligence and support for US law firms The mandate shows the role Yousaf Amanat & Associates plays for US law firms with clients investing in, acquiring or contracting with businesses in Pakistan. The firm acts as their Pakistan counsel, working to US transaction timetables and reporting in the format US deal teams use. On due diligence, the firm reviews a target’s Pakistan operations, contracts, workforce arrangements, tax position and intellectual property. It turns the findings into a clear memorandum that ranks issues by risk and recommends practical fixes, ready for the purchase agreement, the disclosure schedules and insurance underwriting. Beyond diligence, the firm gives Pakistan-law opinions, drafts letters for insurers and lenders, and advises on structuring after closing, so US counsel has one point of contact for every Pakistan question on a deal. Comment Yousaf Amanat, Managing Partner of Yousaf Amanat & Associates, said: “More and more, cross-border technology deals turn on where the work is actually done. When a US company builds its product with a team in Pakistan, investors need a clear answer on three things: tax presence, employment status, and who owns what the team creates. Working alongside our US co-counsel, we gave our client a practical view of each, backed by Pakistani law, so the deal could move forward with the risks understood and allocated. US law firms need a Pakistan partner who understands how their deals run, and that is the service we provide.” The Yousaf Amanat & Associates team was led by Managing Partner Yousaf Amanat, assisted by Sharaz Aslam and Adnan Bashir. About Yousaf Amanat & Associates Yousaf Amanat & Associates is a Pakistan law firm with offices in Islamabad and Karachi. It advises domestic and international clients on corporate and commercial, tax, employment and intellectual property matters, including cross-border transactions involving Pakistan. Media contact: Sahar Riaz, [email protected], +92-51-2290109, www.yaa.com.pk

The Prevention of Electronic Crimes Act 2016 (PECA) as it is more commonly known was Pakistan’s first attempt at curbing electronic crimes and cyber-crimes. The also contains provisions on data protection. Predominantly the PECA provides for criminal penalties for anyone found guilty of indulging in cyber-crimes.  In the past 5 years Pakistan has seen a surge in the use of social media platforms specially by the younger generation. It was inevitable that this use of social media would sooner rather than later be used for political reasons. Change in the government has seen a strong desire and infact also the implementation of a crackdown by the new government and security agencies in Pakistan on the abuse of social media. This crackdown has bene so strong that it has bordered on the banning of free speech. Banning of X in Pakistan, Meta being down, VPN use being restricted and generally social media being painted as negative tool are some of the effects of this crackdown. The Government and the security agencies in Pakistan has also repeatedly accused the wrongful use of social media platforms for being he reason for the spreading of fake and defamatory news. To further regulate the use of social media changes have now been made to the PECA. These changes which have been made into law by the passage of the Prevention of electronic Crimes Amendment Act 2025 have provided for more severe punishments for anyone found guilty of spreading fake news via the use of electronic means and by using a social media platform. For the first time the Government has created a social media protection and regulatory authority. This authority shall have the power to block any content or bring action against any social media platform which is found guilty of spreading news which causes religious or political resentment in Pakistan. A national cyber crimes investigations agency has also been established under the Act which is tasked with investigations pertaining to spreading of news causing political and religious unrest by the use of information systems. This agency has vast powers including the power to enter into a premises and seize information system(s), data, hard drive which may have been involved in the mis use of  electronic means. The promulgation of this law is unlike routine legislation which is enacted for the protections of rights of citizens. This law has been specifically drafted to counter unrest which the Government and the security agencies have been facing by the misuse of social media particularly by the younger generation and professionals well versed in the use of software and malware. Because this law has the backing of the Government and security agencies in Pakistan hence it can be stated that with certainty that the same will be enforced unequivocally. Workplaces which have not clearly provided for policies around the misuse of social media and electronic systems specifically with regard to the PECA and its changes  can become victims to an act of search and seizure by the national cyber crimes investigations agency.  Since the PECA is a law which entails criminal liability thus in such instances it may also be the case that the employer who is deemed to be the owner of the workplace from where the misuse of the electronic system originated be held personally liable. Clearly defined internet usage policies should be made as part of the employment contract. undertakings and indemnities need to be signed  need to be signed by the employees at the time of their employment which provide that they have been given detailed trainings on the use of office electronic equipment particularly on the use of the internet which is to be used for office use only  and that they shall not mis use any office equipment provided to them for their work and that they shall indemnify their employer in case any action is brought against the workplace as a result of their misuse of an electronic system. Blocking certain online sites within the office which are not required for office work would also be a good idea. In conclusion this may be one of the areas for regulations which is being ignored by companies working in Pakistan. Regulating the use of the internet at the workplace by way of clear policies and training and clearly separating the liability of the employer is important and companies should be doing this.   About the Author Mr. Yousaf Amanat is ranked for employment law and data protection by Legal 500, Chambers and Partners and GDR 100. www.yaa.com.pk

What are the 26th Constitutional Amendments and what they mean for investors and multinationals working in Pakistan, absolutely nothing!! Well not directly that is. In a nut shell this is a legislation for taking away the dictatorial powers of the judges which of late had to an extent hampered economic and political stability in Pakistan. The 26th Consti­tutional Amendment Bill, also known as the Constitutional Package, is legislation aimed at taking away the Supreme Court’s suo motu powers, setting the chief justice of Pakistan’s (CJP) term at three years, and empowering the prime minister to appoint the next CJP from among the three most senior SC judges. The way the amendments should impact a private investor is that it gives investors confidence who used to fear that their investment would end up being the target of an overtly ambitious Chief Justice. The term of the Chief Justice of the Supreme Court has been fixed for 03 years. Constitutional benches have been formed within the Supreme Court and the High Courts and so both these courts will have no excuses for ignoring hearing regular matters which again is good news in the sense that there will be no delays for companies involved in litigations. A commission will be formed under the amendments to oversee the working of judges both of the High Courts and Supreme Court.   For long Pakistan’s top courts have been misused. These amendments will go a long way in ensuring investor confidence and even political stability.

On December 14th, 2022, Pakistan passed perhaps its most useful and important law regarding foreign investment so far. The law accords protection to “qualified investments”. Qualified investments have been defined as those investments which fall within First Schedule of the Act and to fall within the First Schedule of the Act the qualification is that investment should be at a minimum of USD 500 million. This is a good qualification. For investment to be USD 500 million or beyond you would as a foreign investor definitely want to protect the same. In a major progressive act, the law further provides that the qualified investment will continue to enjoy protection even if this law is repealed or amended unless the overriding law specifically provides otherwise.   EXEMPTIONS AND EASE OF DOING BUSINESS   Exemptions from: taxes, cesses and customs duties, labour laws such as the worker’s welfare fund.  Ease of dealing in foreign exchange. Secrecy in banking regulations as well as immunity from taxation authorities as to source of funding of accounts.   APPOINTMENT OF INVESTMENT OMBUDSMAN Creation of the office of an investment ombudsman for looking into complaints of investors under the Act. CONFLICT WITH OTHER LAWS  In case of conflict with other laws, the Act to prevail. REKO DIQ  The Reko Diq Project becomes the first qualified investment under the Act. On December 9th, 2022, the Supreme court of Pakistan declared an Agreement signed between the Government of Pakistan, Barrick Gold and Antofagasta PLC as legally binding. And I just cannot believe that I lived to see this day. It was exactly 09 years ago when I while sitting in the same Supreme Court of Pakistan witnessed the Chief Justice of Pakistan declare the mining lease and the efforts of Barrick and Antofagasta’s SPV TCC to acquire the mining lease as well as the Chagai Hills Joint Venture Agreement and with it BHP Billiton’s efforts as completely illegal. I and the entire legal team was crest fallen. For a year we had tried our best that this day should not come. We would later realize that having succeeded in managing to deflect all attacks by a very gung-ho Chief Justice to the international arbitration process was in fact our real victory. For the next 09 years Barrick and Antofagasta launched a brilliant legal strategy before the ICC and ICSID. They patiently went through the processes, the malicious news campaign launched against them in Pakistan, harassment of their employees in Pakistan and the unrealistic offer of negotiations from one government to the other. They prevailed. The project has been revived. The Supreme Court of Pakistan has ratified an Agreement between the Government of Pakistan and Barrick for the restart of the Project. Barrick is a 50% shareholder in the Project with the rest of the shareholding divided between Pakistan’s stated owned entities and the province of Baluchistan.   THE PROJECT This is a massive project and ushers the opening of the mining industry in Pakistan. The Tethyan Belt is rich beyond imagination in both copper and gold. The Reko Diq Project is estimated to last for a total of 40 years but the belt has numerous other exploration sites which can usher in many other Barricks and BHPs. The Reko Diq Project alone has the potential to yield its investors a whopping USD 11 billion. Tanjeel, next to the Reko Diq Project is another potential source for Copper and Gold. The untapped potential of the Tethyan Arc is very real.   WHAT WENT WRONG IN 2013 AND WHAT WENT RIGHT IN 2022 For a Project as massive as the Reko Diq Project you need the Government on your side. The military establishment which provides security to Projects in volatile areas such as Balochistan perhaps did not understand the magnitude of the Project. Misconceptions were created by the local media as well as the Government’s legal team that Barrick and Antofagasta would lose the arbitration and that in fact Pakistan processed the technical know how to operate the Project. For a country where this was to be the first mining project, it is beyond me how we believed that we possessed the technical know how to operate the Project. I think once the Government realized that neither were they going to win the legal battle nor did they possess the legal know how on operating the Project, everything and everyone else just basically fell into place. Because this is an article related to the law, I will stress on the fact that Barrick and Antofagasta followed the legal process to the T. From the various notices we sent to the Government under the Chagai Hills Joint Venture Agreement regarding the initiation of the dispute to patiently following the Arbitration process before ICSID and ICC, the companies demonstrated to the Government of Pakistan that should they be denied their legal right in the future too without just cause, the Government would lose. The creation of the Foreign Investment (Protection and Promotion) Bill, 2022 is a case in point. BHP Billiton back in 1996 had legally acquired concessions, the only difference between BHP and Barrick/Antofagasta was that the Government was not involved in an international Arbitration with BHP. The massive Arbitration Award has been the game changer.                                    THE LESSON The Lesson for investors: follow the legal process. Use international arbitration clauses in agreements. When the clause exists do not under any situation submit to the jurisdiction of the local court. The Lesson for the Government; let’s not mess things up this time. The Mining Industry will be the business game changer for Pakistan.

The Firm recently advised he online DSP advertising platform. Quanticast combines cutting edge machine learning with human intellect to come up with unique online advertising solutions. Most Fortune 500 companies utilize Quanticast. In November 2024 the Firm was contacted by Dentons UK to advise Quanticast on its online marketing campaign of which Pakistan was also destined to be a part. The advise focused on the law surrounding data protection and advertising in Pakistan. Particularly with regard to data protection the advise also encompassed the role of GDPR-UK in the context of Pakistan’s data protection laws. The advise also included drafting of documents on permission for use of data by the end user.