Under the Free Zone Act 1990 Section 4, goods and services in a Free Zone consist of:

“Subject to thus Act, goods and services of any description, except those specifically and absolutely prohibited by law, may be brought into, produced, manufactured or provided in the Free Zone without payment of any customs duty, excise duty, sales tax or service tax.”

Under the Free Zone Regulations 1991 section 5 (1):

“Any person wishing to carry out any activity within the Free Zone shall apply in writing for approval to the PKFZ Management a form as in Form FZ No.4 as specified in the First Schedule; and the PKFZ Management may grant or refuse the approval.”

Under the Free Zone Regulations 1991 section 12:

(1) Where a person –

which in the opinion of the PKFZ Management is dangerous or prejudicial to public interest, health or safety, the PKFZ Management may give an order in writing to the person -

(i) in respect of goods that have been taken into the Free Zone, to remove the goods from the Free Zone;

(ii) in respect of goods proposed to be taken into the Free Zone, to exclude the goods from the Free Zone;

(iii) in respect of any activity or operation that is being carried on in the Free Zone, to discontinue the activity or operations;

(iv) in respect of any activity or operation proposed to be carried out in the Free Zone, to exclude the activity or operations from the Free Zone.

“Activity” includes commercial activity and manufacturing activity and related operations.

Commercial activity includes trading (excluding retail trade), breaking bulk, grading, repacking, relabelling and transit.

‘Manufacturing' means the conversion by manual or mechanical means of organic or inorganic material into a new product by changing the size, shape, composition, nature of quality of such materials and includes the assembly of parts into a piece of machinery or other products, but does not include the installation of machinery or equipment for the purpose of construction.