Can Foreigners Own Land/Property in Pakistan?
In Pakistan, the land is a provincial subject with different regulations administering land acquisition in each province. In general, any foreign national who has received permission from the Ministry of Interior (Federal) and the respective provincial government can acquire land within their capacity. Furthermore, if a company is incorporated in the Security and Exchange Commission of Pakistan (SECP), a foreigner can own land.
Graana.com, in a concise manner, elaborates one of the most asked questions ‘ can foreigners own land/property in Pakistan.
- Upper Limit
Apart from media, banking, agriculture, and airlines, the government imposes upper limits on investment.
- Lower Limit
There is no ‘minimum’ amount set for investment in equity ownership in all the permitted sectors.
- Foreigners can acquire 100% foreign ownership in all sectors except for the areas mentioned in the upper limit.
- According to the sixth clause of the Foreign Private Investment Act 1976, for promotion and protection of investment and the procedural requirements set out by the State Bank of Pakistan’s (SBP) Foreign Exchange Manual 2002, foreign investors retain the right to repatriate their funds, be it profits acquired or their dividends, in the original currency of the respective state from where the investment was made.
- Foreigners can appoint authorised banks or dealers to conduct repatriation of profits/disinvestments proceeds/dividends through a proper banking channel.
- Regarding portfolio investment, foreigners are required to open a Special Convertible Rupee Account (SCRA) in any local bank to extract their dividends and sales proceeds. They can invest in all securities displayed on Pakistan’s Stock Exchange.
- As per the regulations of the SBP and SECP, foreigners can gain access to domestic borrowing as per the Debt-Equity Ratio.
Scope of FDI in Pakistan
Since the last decade, Pakistan has been receiving a healthy and consistent stream of foreign investment from Asia, America, Australia, Africa, and Europe.
In July 2021, the SECP reported 1,949 registrations of new companies, with a total quantity ranging at 147,842. Within these registrations, the construction and real estate sector has topped the list.
Lastly, for the promotion of FDI, the government assures optimal treatment towards foreign investment. The Protection of Economic Reforms Act of 1992 and the Foreign Private Investment (Promotion & Protection) Act 1976 provide for “No Less Favourable” treatment to the foreign investors compared to the National Investors in similar circumstances. With rising trends in investment as SECP incorporates more and more companies, now is the perfect time to invest in Pakistan’s real property.