Pakistan - Country Commercial Guide
Computer Software

This is a best prospect industry for this country. Includes a market overview and trade data.

Last published date: 2022-01-27

Overview

Pakistan’s market for computer software has seen steady growth for the past several years. According to the local industry sources, the total size of the software sector is approximately $3.5 billion, which is expected to grow despite the challenges posed by the global pandemic. The local software market is export-orientated; however, it is dependent on imports for the latest technologies and services. During FY 2020-21, Pakistan’s software exports were approximately $1.9 billion as compared to $831.4 million during the previous year. In addition, the domestic consumption of software applications supported by direct imports and local development is approximately $1.2 billion, which has also seen an upward growth by approximately 2 percent. Major international software brands from the United States, the United Kingdom, Germany, Spain, and China have already established a strong presence in Pakistan.

Local application developers, freelancers, and IT companies are the major driving force behind the growth of the computer software sector in Pakistan. There are approximately 3,000 registered local companies involved in a variety of applications development for domestic and corporate use. Most high-end companies are involved in the development and distribution of enterprise resource management and customized solutions for specific industry sectors. In addition, there is a growing interest from local companies and freelancers to enter the online social media space, especially after the launch of 3G and 4G cellular spectrums in Pakistan. Most of these development activities involve consumer applications based on Android or Apple platforms, website development, e-wallets/payments, e-commerce, and online gaming. Foreign firms operate either through their appointed local distributor or by having their own office with fully equipped technical and support teams to cater to their customers’ needs.   

The Government of Pakistan on both federal and provincial levels places a high priority on the development of the IT industry, including the software development sector. According to Pakistan Software Export Board (PSEB), the government has launched several policies to encourage local and foreign companies to invest in Pakistan. Some of these incentives include: (1) 100 percent ownership of equity; (2) income tax exemption on IT exports revenues;(3) 100 percent repatriation of profits; (4) tax holiday for venture capital funds until June 2024; (5) accelerated depreciation of 30 percent on computer equipment; (6) the State Bank of Pakistan (SBP) has allowed banks to open Internet Merchant Accounts; and (7) availability of instant, reliable, and high-speed internet connectivity. In addition, the federal government and the private sector have made concerted efforts to improve existing internet availability and connectivity throughout the country. According to official statistics, approximately 85 percent of the local telecommunication infrastructure is via fiber-optic lines, which provides internet access to over 2500 cities and towns. In addition, the government and private sectors have initiated an aggressive strategy to develop new IT educational institutions and introduce new curriculums and short training programs to consistently maintain the local human resource pool. 

Leading Sub-Sectors

The most promising sub-sectors for U.S. companies within the computer software sector for FY-2022 are:

  • E-commerce
  • Company Acquisitions and Mergers
  • IT Parks
  • Incubators
  • Venture Capital Funds
  • Software Companies
  • Call Centers
  • Gaming and Animation Studios
  • Data Centers
  • Cloud Computing
  • Cybersecurity Applications & Services
  • Training Centers
  • Consulting Centers

Opportunities

The local software market offers substantial business opportunities for U.S. companies who offer products for the corporate sector including financial management and business forecasting, online IT training portals, e-commerce, e-payment, embedded tools, and other web-based applications. Industry experts have expressed optimism about growth prospects in the e-commerce sector, projecting $1.5 billion in revenue by 2022. Increased use of mobile wallets, coupled with cheaper and more accessible smartphones, has helped increase the user base for Pakistan’s ecommerce industry.

Resources

Ministry of Information Technology & Telecommunication: http://www.moit.gov.pk/

Ministry of Economic Affairs and Statistics: http://www.statistics.gov.pk/

Pakistan Software Export Board