Investment in Pakistan’s Housing and Construction Sector
Though the process of investment in real estate of Pakistan lethargic and slow and takes months to be completed but foreigners are show interest in starting business here.
Why Investment in Pakistan is Beneficial
55 percent of Pakistan’s population is below 19 years of age which portends well for extensive sustainable economic growth. Pakistan comprises a majority of middle class out of which most of the workforce is proficient in English and is hardworking and intellectual. The consumer market of Pakistan is growing at a very fast pace which has now stretched to more than 150 million.
Documents required by foreigners
- An employment letter from the company they’re currently working for, declaring the nature of their job, duration of employment along with the contact details is required.
- A copy of their passport, along with the copy of a valid visa with six recent, passport size photographs
- Copy of the landlord/realtor’s CNIC is required to be submitted at the time of contract.
- Additionally, the owner of the property in question also needs to submit attested copies of proof of ownership.
- Lastly, the law requires a contract to be drafted in the name of the occupant of the property. In case, a new tenant occupies the property, he’s legally required to get a new contract otherwise strict legal action would be taken against him.
Pakistan’s main strengths for attracting FDI are:
- A huge domestic market with a population of 207 million, a decreasing level of poverty, a stronger middle class and vibrant demographics
- An inexpensive and abundant workforce
- High GDP growth in recent years (5.2% in 2017)
- In recent years, the government has pursued a FDI attraction policy with numerous privatizations, the guarantee of equal treatment between foreign and local investors and a whole series of tax incentives.
- It has also made some necessary efforts in terms of economic reform.
- The country has financial and logistical support from the United States and the IMF.
The main obstacles to the economic development of the country are:
- A significant security threat against foreign interests in Pakistan (especially those from the US and Western countries), coming from terrorist organizations
- A high degree of corruption, particularly with regard to government procurement, international contracts and the tax system
- Pakistan has not signed the OECD Anti-Corruption Convention.
- Low fiscal resources with poor prospects for development due to the continuing importance of the informal economy.
- High vulnerability to natural disasters and their negative impact on the country’s agriculture.
- The business environment is difficult. Pakistan is among the least pro-business economies in the world.
Status in Comparison
The potential attractiveness of Pakistan for investment remains lower than neighboring India, but equal to Sri Lanka and Bangladesh. Pakistan’s attractiveness improves, against a backdrop of a challenging security environment, electricity shortages, and a burdensome investment climate also hinder investments.
Future of Investment in Pakistan
Though the workforce in Pakistan is good, land is cheaper and profit is good. But on the other hand there is too much uncertainty in Pakistan. The economy of Pakistan is not predictable . So it will affect the property business as well. Will the foreign investors consider investing in Pakistan in future? We can’t really say…