The impact of Financial Action Task Force (FATF) on the Real Estate sector of Pakistan

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Introduction

Recently, the Financial Action Task Force (FATF) announced its decision to keep Pakistan on its grey list but ruled out the possibility of blacklisting the country as it has met most of the conditions under the recommendation plan. In light of this development, the Federal Board of Revenue (FBR) has intensified inspections against Designated Non-Financial Businesses and Professions (DNFBPs). The FBR has also proposed strict penalties for real estate agents unwilling to comply with the anti-money laundering and counter-terror financing regime. The top revenue collecting authority plans to impose heavy fines on all real estate agents, advisors, and brokers who are reluctant to register themselves with the board of Designated Non-Financial Businesses and Professions (DNFBPs), which is an important requirement put forward by the FATF to get Pakistan off the grey list.

 

Why is the real estate sector central in curbing money laundering and terror financing?

According to estimates, Pakistan’s real estate sector is worth USD 600-700 billion USD. If planned development accelerates in the country, real estate can become a multi-trillion-dollar sector. Although real estate is a national asset, it can be used for different financial crimes like money laundering, the whitewashing of money created through illegal sources, and the concealment of ill-gotten financial gains. Pakistan’s greylisting by the Financial Action Task Force (FATF) in 2018 set into motion several financial regulations by the government that involved streamlining major sectors of the economy. The FATF gave regular and updated recommendations to curb money laundering and counter-terror financing in the country. The recommendation plan has targeted several areas of the economy including the real estate sector, which lacks regulatory and financial transparency.

Pakistan’s real estate sector is largely unregulated and unplanned. Lack of rules, regulations, valuations, and planning has multiplied all sorts of administrative, socio-economic, and legal problems for the economy in general and the real estate sector in particular. Several loopholes in the regulation of the sector have resulted in its exploitation, making it a harbour of ill-gotten wealth. Real estate transactions and other processes in the sector are largely conducted off the record, which leads to under-invoicing of real estate assets and property. These practices disrupt proper documentation of real estate assets and boost non-transparent reporting. A lack of certified real estate agents, brokers and dealers has perpetuated this issue creating the potential for money laundering and terror financing activities.

 

FATF and its recommendations for the Real Estate Sector of Pakistan:

Under the recent review of Pakistan’s efforts towards curbing money laundering and terror financing, the FATF announced that the country needs to demonstrate Designated Non-Financial Businesses and Professions, their monitoring for terrorist financing, and supervision commensurate with the risks. Under the Anti-Money Laundering Act, the FBR is responsible for ensuring that DNFBPs, which include real estate agents, dealers in precious metals and stones, and FBR-supervised accountants comply with anti-money laundering and counter financing of terrorism obligations. Currently, in Pakistan, out of the 500,000 property dealers and real estate investors/agents, only 22,000 are registered with DNFBPs. Thousands of unregistered real estate investors and property dealers continue to trade unregistered open files, affidavits, and certificates. Under this new regulation, registered real estate and property developers need to check the buyers and sellers’ names on the proscribed persons’ list by the United Nations. If the name of a potential buyer or seller is on the list, the developer or builder has to immediately report it to the concerned authorities.

 

What is the way forward for the real estate sector of Pakistan?

Although the current government is currently obliged to implement the recommendations given by the FATF regarding the real estate sector, it needs a holistic and comprehensive plan to effectively regulate the sector in the long term. The real estate sector suffers largely from a lack of regulations and oversight from any proper authority. The implementation of a Real Estate Regulatory Authority (RERA) is a need of the hour. An overview of international best practices shows that majority of the countries with a mature and profitable real estate sector is governed by a competent regulatory authority. For instance, the real estate sector of Dubai has been able to attract millions of dollars’ worth of investment due to its streamlined and highly regulated real estate sector. The establishment of a real estate regulatory authority will increase transparency exponentially in every area of the real estate sector, from securing investments to the verification of property developers across the country.

 




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The Need for Compact Apartments in Pakistan | Graana.com Blog

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The rising demand for housing units in urban areas has become a new challenge for many governments. To tackle this growing impediment to development, governments across the world have adopted various strategies for meeting the demand for housing units. According to the data of the World Bank (WB), population growth in Pakistan was observed at 1.978% which is evidence of the fact that the demand for housing units will grow annually.

Amidst the growing population, and to meet the rising demand for housing units, Graana.com through this blog makes compact apartments a case of meeting the increasing housing demand. According to the statistics of UN-Habitat, in 2011 Pakistan witnessed a housing shortfall of 10mn units in the country and almost a decade later the numbers would have definitely increased. 

Managing the Housing Supply and Demand

The foremost reason for putting up the case of compact apartments is bridging the existing gap between the housing supply and demand. According to the Punjab Spatial Strategy 2047, the housing demand in the rural areas of Punjab alone stood at 10.7mn housing units while the demand in urban areas was recorded at 6.4mn units. The data was driven keeping in view the population census of the years 1998 and 2017. Furthermore, by 2047, the housing demand in only Punjab province will reach 37mn which indicates that the shortage has to be tackled in a unique and comprehensive manner. In this data, the housing demand for other provinces has been not accounted for; if accounted for, the numbers of housing units will rise in the upcoming years. 

Increasing Population Density 

The population density of a city or any area can be calculated by people living in an sq. km (people per sq. km of land area). Compact apartments can be a suitable tool for increasing the population density in a city. According to the World Bank Data, the population density of Pakistan in 2020 was recorded at 286.5 per sq. km, whereas the population density of Islamabad city was recorded at 2,089 people per sq. km. Furthermore, the total area of Islamabad is calculated at 906.5 sq. km and considering the ratio of population density and Islamabad’s land then population density is low in the city. Population density has a great role to play in economic growth which ensures the infrastructure building and minimisation of the transaction cost.

 

A Case for Vertical Buildings

Compact apartments can build a strong case for vertical buildings. Over the period of time, town development in Pakistan has observed a horizontal phenomenon which has led to the reduced population density in Pakistan. According to the Ministry of Planning, Development and Reform, only 6000 people reside in an sq. km in Pakistan whereas Dubai accommodates 200,000 people in the same area. As per the paper ‘Pakistan 2025’ published by the Planning Commission development of vertical housing societies is one of the major objectives under the vision till 2025. Therefore, it is a recognised fact that compact apartments can become a tool of vertical development in cities that can cater to the needs of many.

A Substitute for Housing Societies

Compact apartments can build a strong case as a substitution for housing societies. The provision of services in the housing societies is easy as compared to the people living in housing societies. Research on commuting time between workplace and a home found out that providing security in vertical buildings is easy as compared to the other housing schemes. Similarly, the residents of compact apartments can get similar services without any biases.

 

Imarat Residences – Defining Compact Apartments

Imarat Residences is the upcoming project of IMARAT Group which is a characteristic of compact apartments in Islamabad. The project revolves around smart living which aims to redefine the standards of living of the residents of Islamabad while promoting the trend of vertical buildings in the city. The project is going to be located on the Islamabad Expressway, one of the prime locations of the city. The compact apartments are designed to suit the needs of individuals and small families who want to start a new living in the city.




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Iqbal Day & Its Significance in the History of Pakistan

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“The Poet of the East”—Dr Allama Iqbal—doesn’t require any introduction. However, since November 9 is a national occasion of celebration and commemoration of his legacy, let’s learn all about Iqbal Day and its significance in this blog. 

Iqbal Day and its significance: Who is Allama Muhammad Iqbal?

During the period of British Raj in the subcontinent, Iqbal was born in Sialkot on November 9, 1877. Despite gaining his livelihood by practising law, Iqbal got his fame from his strong grip on the Persian and Urdu-language poetry – written in the classical style for public recitation. 

Allama Mohammed Iqbal, the poet of the East

While delivering a speech at Aligarh in 1910, Iqbal highlighted the new dynamics of his dreams and hopes. His ideology resonated through the themes of his poetry that went about the vanishing memories of the past glories of Islam, some complaints regarding its present status, and eventually tuning towards a call for unity and reform.

This reform, according to Iqbal, was only achievable by fortifying an individual’s mindset by systematically taking them through three stages – obedience of Islamic law, self-control, and general acceptance of the idea that every Muslim can potentially become a vicegerent of Allah by embodying the Divine commandments.

The Road to Iqbal’s Success with Literary Works

Another important part of Iqbal Day and its significance is to become aware of the intellectual journey that led him to become Hakeem-ul-Ummat (The Sage of the Ummah). Iqbal passed his matriculation exams in 1893, and enrolled at the Government College University (GCU) in 1895. His graduation in the Bachelor of Arts in philosophy, English literature and Arabic won him the Khan Bahadurddin F.S. Jalaluddin medal.

In 1906, pursuing higher education, Iqbal got a Bachelor of Arts degree on scholarship from the Trinity College, University of Cambridge. In the same year, he was called to the bar as a barrister at the Lincoln’s Inn.

In 1908, Iqbal got a Doctor of Philosophy degree from the Ludwig Maximilian University of Munich, with his thesis entitled ‘The Development of Metaphysics in Persia’ – which highlighted some mystics of Islam previously unknown in Europe.

During his time in Europe (from 1905 – 1908), Iqbal began to write poetry in Persian – his preferred language as it made expressing his thoughts easier. And from here on forth, he wrote continuously in Persian. Iqbal had a great interest in Islamic studies, especially in the Sufi belief system.

Spirituality is a crucial aspect of Iqbal Day and its significance. Iqbal’s poetry, apart from the ideologies of independence, also explored the concepts of submission to Allah and following the path of the Prophet Muhammad (PBUH). Iqbal began practising law in 1908, at the Chief Court of Lahore but quit and, incidentally, devoted himself to literary works, becoming an active member of the Anjuman-e-Himayat-e-Islam.

Moreover, he was strongly influenced by the poetry and philosophy of Rumi as he was deeply grounded in religion since childhood. Iqbal then began concentrating intensely on Islamic studies, the culture and history of Islamic civilisation and its political future, all the while embracing Rumi as ‘his guide’.

Celebrate the Significance of Iqbal Day – 9th November

The main purpose of celebrating this day, across all the provinces of Pakistan, is to signify Iqbal’s importance and acknowledge his contribution that inspired the idea of the Pakistan movement among the Muslims of the subcontinent. He was the man who dreamt of a separate nation where Muslims could live peacefully, prosper, and ultimately enjoy practising their religion – with total freedom.

The reason why we celebrate Iqbal Day is that he has been a great contributor towards the movements of Chaudhary Rahmat Ali’s Two-Nation theory. Iqbal’s advocacy of this ideology was among the top reasons why the emergence of Pakistan evolved into a reality. 

As a great politician and a philosopher, inspiring the idea of an independent Muslim state, his words proved very powerful in encouraging the Muslim Ummah to fight for their rights and, evidently, generated power and unity in their struggles for freedom.

Iqbal spent the majority of his life efforts to add to the prosperity of Muslims. His poetry proved as a power tool, and not just for the Muslims. People, belonging to different walks of life, all around the world, adore Iqbal’s work – that is an in-depth philosophical and sociological analysis of the living conditions for Muslims, their growth prospects and the discrimination they were facing. His poetry is not time-sensitive; if you pick up any one of his works today, it is still immensely relatable. 

Iqbal was a strong protagonist of the political and spiritual revival of Islam across the Muslim world, but specifically in the pre-partitioned subcontinent. As one of the most prominent leaders of the All India Muslim League, he worked closely with Muhammad Ali Jinnah to this effect.

The Legacy of Sir Allama Muhammad Iqbal

Widely commemorated in Pakistan and the rest of the world, Iqbal is regarded as the ideological founder of the country. His birthday (9th November) has been annually commemorated in Pakistan as Iqbal Day, and was also a public holiday until 2018.

Iqbal is the namesake of many public institutions, including the Allama Iqbal Campus Punjab University in Lahore, the Allama Iqbal Medical College in Lahore, Iqbal Stadium in Faisalabad, Allama Iqbal Open University in Pakistan, Iqbal Memorial Institute in Srinagar, Allama Iqbal Library in University of Kashmir, the Allama Iqbal International Airport in Lahore, Iqbal Hostel in Government College University, Lahore, the Allama Iqbal Hall at Nishtar Medical College in Multan, Gulshan-e-Iqbal Town in Karachi, Allama Iqbal Town in Lahore, Allama Iqbal Hall at Aligarh Muslim University, Allama Iqbal Hostel at Jamia Millia Islamia in New Delhi and Iqbal Hall at the University of Engineering and Technology, Lahore.

Regarded by many as one of the founding fathers of Pakistan, his best literary works include Asrar-e-Khudi, Payam-e-Mashriq, Bang-e-Dara, Bal-e-Jibril, Zarb-e-Kalim and Armughan-e-Hijaz. His poetry was translated into many European languages in the early part of the 20th century – Asrar-e-Khudi and Javed Nama were translated into English by R. A. Nicholson and A. J. Arberry, respectively. He is known as Muffakir-e-Pakistan (Thinker of Pakistan), Shair-e-Mashriq (Poet of the East), and Hakeem-ul-Ummat (The Sage of Ummah). Consequently, Iqbal was knighted in 1922. He died in Lahore on April 21, 1938.

So, these were some of the most important things you needed to know about Iqbal Day and its significance. If you enjoyed this piece, you’d also like our informative blog on lesser-known facts about the flag of Pakistan.

If you have any queries, please feel free to contact us at blog@zameen.com. Subscribe to Zameen Blog for more updates.



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Impact of State Bank of Pakistan Regulations on the Real Estate Sector | Graana.com Blog

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Introduction

In countries where construction financing is a separate product, housing finance is not provided for under-construction projects. However, the State Bank of Pakistan (SBP) has developed guidelines to help mortgage providers provide housing finance for under-construction projects. The procedures mentioned by the SBP are extremely detailed and require many bureaucratic documents. This can have a negative impact on the adoption of the process as it will be costly and time-consuming. It can also be argued that some of the functions defined by the SBP fall in the ambit of a Real Estate Regulatory Authority (RERA). However, the guidelines also ensure that developers have all the necessary documentation and approvals before selling to anyone, thereby increasing transparency in the sector. Continue reading to understand the impacts of SBP regulations on the real estate sector of Pakistan.

 

State Bank of Pakistan as Regulator of Real Estate

The State Bank of Pakistan (SBP) plays a vital role in ensuring the financial sector’s stability. As a central bank, it has been entrusted with the responsibility to regulate Pakistan’s monetary and credit system under the State Bank of Pakistan Act 1956. As no aspect of any industry can act independently of the financial system, the real estate sector of Pakistan is also susceptible to policy shifts from financial institutions. Commercial banks have always remained reluctant to provide loans and mortgages based on allotment letters only. However, under the new SBP scheme, housing finance providers will give assurances to the purchaser that once the building has been developed according to the approved layout plan, the funds will be given to purchasing the unit, thereby allowing for financing of under-construction buildings, apartments, and homes. This will also limit the risk for financial institutions, as in the case where the developer does not complete the installation, the funds will not be discharged. The SBP has also laid out clear and extensive guidelines on multiple aspects of the process, such as checking necessary ownership documents and approvals by regulatory authorities. However, it has also stipulated that a No Objection Certificate (NOC) be obtained for every unit sold under the financed project. This is a peculiar detail that might cause many bureaucratic delays in the completion of the project.

Banks will also have to devise a selection criterion for project assessment and eligibility criteria for those developers who can apply to the program. The builder criteria may include the builder’s/developer’s financial soundness, track record, compliance background with legal and urban planning issues, and milestone completion on previous projects.  These builder’s/developer’s can be private or government entities. Furthermore, the banks will ensure a physical and legal inspection of all relevant documents such as title documents, NOCs, and approved site and layout plans. The selection criteria may also include access to schools, hospitals, transport, utilities, and marketability of the housing units. Once all verification has been done, the banks will sign a Master Financing Agreement (MFA) with the builder/developer. This agreement will include the construction plan, milestones, project completion time, and loan disbursement and repayment plan. The SBP has also stipulated that the mortgage provider for units under the project must be the same as the construction lender.

 

Possible Impacts of SBP Guidelines

The function of the central bank in any country is to strike the right balance between market structure and regulatory frameworks to ensure the functional efficiency of the economy. Over-regulation can suppress financial innovation, while an imperfect market structure can reduce the efficiency of the system and affect consumer interests. Regulations are introduced to change the behaviour of regulated institutions because unregulated market behaviour can lead to suboptimal outcomes.  A majority of commercial banks in Pakistan usually invest in government-backed securities as they offer high returns and large capital buffers. However, some of the conditions set by the SBP for approval of housing finance in under-construction projects indicate a foundation lack of confidence in commercial banks. It says that banks do not have the capacity and capability to assess the credit risk of construction projects. In contrast, a majority of these commercial banks have risk departments stacked with well-qualified risk professionals. Suppose the SBP pursues micro-management of housing loans on such a level. In that case, it is feared that commercial banks will prefer to invest in government-backed securities instead of economy-driving and consumer-serving products.

Furthermore, the builder and legal counsels should agree upon any agreeable structure for the security of purchase. In the case of defaulters, the builder usually has access to deposits made earlier and can use them to sell the unit at a discounted price later. Therefore, as long as the bank has completed due diligence, other approvals from authorities like NOCs should not be required for the sale of units. Moreover, dealing with delinquent purchases also falls under a real estate regulatory authority (RERA). Overall, the guidelines can bring a positive change in the real estate sector and increase the number of housing finance in Pakistan; however, the establishment of RERA in each province is vital for consumer welfare and bringing transparency to the real estate sector.

 

Conclusion

The State Bank of Pakistan (SBP) has initiated a new scheme that allows commercial banks to give housing finance for under-construction projects. However, the central bank has imposed several guidelines and processes for the approval of projects and developers. Tight guidelines and strict conditions can lead to a show of mistrust of commercial banks in their capacity for risk assessment. Furthermore, requirements like obtaining NOCs for each unit in a high rise are bound to increase bureaucratic delays in projects. Therefore, establishing a real estate regulatory authority is necessary for the real estate sector to release financial institutions from the burden of carrying out tasks of a real estate regulatory body.

 




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Rethinking Master Plans in Pakistan

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Cities are considered the engines of economic growth; from the literature of the evolution of cities. It can be deduced that urban centres worldwide have evolved owing to the cities being hubs of trade. If observed keenly, life in cities is organized around commerce and trade, and the people in the cities move from rural areas to do business or work in the country’s services sector. Population growth, increasing businesses, and expanding opportunities in the city are diminishing the boundaries between city and villages.

Graana.com, through this blog, highlights why there is a need to rethink the master plans of the city. Travelling through GT Road, we can observe that the boundaries between cities and suburban areas have diminished haphazardly. It is difficult to differentiate between the boundaries of Lahore and its periphery because the city administrations have been unable to implement the master plans.

 

Master plans and Cities

Urban regeneration has always dominated a special place in policymaking. Providing quality services and lifestyles has emerged as a challenge for the authorities, and governments have dedicated numerous resources for comprehensive planning; however, cities have been expanding in a disoriented manner. Despite adopting various strategies, the practical solutions are not in foresight. This is probably because our master plans of the cities are obsolete in managing the contemporary needs of the cities.

Simply put, masterplans are the blueprints of a city’s development as they act as a guide to the city’s development. Masterplans are all about the farsightedness of the urban planner since it interconnects social and economic aspects of our daily lives along with providing housing and leisure activities to urbanites. Masterplans are dynamic and should be altered as per the requirements of the city.

The new thinking in the master plan should revolve around the following

 

Vertical Development

It is the right time that the master plan in Pakistan should include vertical development in their master plans. As the influx of people is increasing in the cities and housing demand is also increasing, vertical development can be a panacea to all of these issues. For making this a reality, the civic authorities should alter their by-laws in favour of vertical development. One of the advantages of vertical development is that it increases, provides mobility, provides easy access and reduces unnecessary congestion.

 

Public Inclusion

The public should also have a say in the development of master plans. It has been observed that the master plans of the cities of Pakistan are criticized for not including the inputs of the public. Moreover, the master plans are considered a product of an elitist mindset that only caters to the interests of a very few people in the city. As a remedy, the master plans should focus on accommodating the peripheral segments of the society as the cities promote inclusive and sustainable development.

 

Mobility Enhancing Measures

One of the major problems that Pakistani cities are contemporarily facing is the exponential increase in vehicles and redundant public transport. Modern cities across the world are discouraging the use of private vehicles as it causes environmental pollution and chokes the avenues of the cities. Against this backdrop, the new thinking on the master plan should give attention to mobility issues and encourage the use of public transport. Similarly, the new master plans should emphasize encouraging pedestrian movement as it is one of the practical tools for avoiding vehicles in the city.

 

Trade Hubs and Business Centers

Cities contribute in a myriad of ways to the development of a country. As mentioned earlier, the nature of cities has evolved owing to the business activities taking place in an urban locality. One of the advantages of vertical development is that it increases, provides mobility, provides easy access and reduces unnecessary congestion. one thing that is pertinent to mention here is that trade hubs or business centres should be planned in a manner that people can easily access these centres without resorting to the use of vehicles. The new master plans should have a special place for the business centres in the cities as economic activity is a key to economic growth.

 

Effective Civic Authorities

Finally, there should be one authority responsible for implementing a master plan. In Pakistan, the situation is quite contrary; there are various departments responsible for governing a city. Problems exacerbate when there is no clear distinction between the responsibilities of multiple authorities and the departments lack harmony. As a result, the master plan of the cities hangs in the balance, and the development plans become ineffective. Similarly, there is also a need to strengthen the local government system as the people can directly give their feedback in the implementation of the master plans. 




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Major types of land in Pakistan | Graana.com Blog

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The land is not merely soil; it is a fountain of energy flowing through a circuit of soils, plants, and animals. ~Aldo Leopold.

 

Land is one of the most important assets man can have in his lifetime. This tangible asset not only comes with multiple benefits but also allows you to gain financial freedom. As a real estate investor, you should consider investing in land in Pakistan. Trends suggest that land investment is always fruitful.

To make you more aware of the diversity in terms of land, this blog will take you through different types of Land in Pakistan that you need to know about. This information will broaden the horizons of your knowledge and enable you to make well-informed investment decisions. In short, if you are a real estate investor, this blog is for you.

To know more about Land in Pakistan, keep on reading.

 

Pros of investing in Land in Pakistan:

  • Land comes with much flexibility. Unlike houses and other buildings, you can do multiple things with your parcel of land because the choices are immense. When you buy a home, you have many limitations regarding the design and construction. However, on the contrary, you do not have to worry about these things when you buy land.
  • Land comes with affordability. As compared to houses and commercial buildings, the land is relatively on the cheaper side. If you are someone with less capital, you should consider buying a parcel of land in Pakistan.
  • If you are looking for a secure investment, the land is perfect for you. The land is one of the few assets whose price appreciates over time. So, if you are looking for a safe avenue for your hard-earned money, you should consider buying land.
  • When you buy a piece of land, you usually do not have to wait for possession. On the other hand, when you buy a house or a shop in Pakistan, there is a massive gap between purchase and possession.
  • Maintainance of Land is relatively more straightforward than the maintenance of a house or commercial property in Pakistan. You do not have to incur costs such as maintenance costs, renovation costs, etc. 

 

Types of Land in Pakistan that you need to know about:

Following is a list of the kinds of Land in Pakistan that are pretty popular among the investors and general public. 

 

Agricultural Land:

Pakistan is an agricultural country that is known across the globe for its agricultural output. The agriculture sector in Pakistan is the second largest sector of Pakistan. Agriculture accounts for about 18.9% of Pakistan’s GDP and employs about 42.3% of the labor force.

According to Wikipedia, agricultural land is the land devoted to agriculture, the systematic and controlled use of other forms of life, especially the rearing of livestock and production of crops.

 

In Pakistan, the agricultural lands are usually located on the outskirts of the city and prove to be an excellent source of investment. Most of the people in Pakistan buy farmland and lease it out to other parties. These parties grow a variety of crops and livestock on these parcels of land. At the end of the season, the party will give the owner land rent and a certain amount of profits.

 

Barren Land:

According to NASA, barren land consists of those ecosystems in which less than one-third of the area has vegetation or another cover. Generally, barren land has thin soil, sand, or rocks. Barren lands include deserts, dry salt flats, beaches, dunes, exposed stone, strip mines, quarries, and gravel pits.

In Pakistan, barren land is abundant. It is estimated that about 3.8 million acres of land in Punjab is bare, converted into a fertile ground to benefit the country. Barren Land can be turned into a source of income in no time. People can use their barren land to construct garbage management sites, parking lots, and storing facilities for big businesses and machines. With the real estate industry advancements, we can also say that barren land can act as a site for upcoming residential and commercial projects

 

Commercial Land: 

According to Wikipedia, commercial property, also called commercial real estate, investment property, or income property, is real estate intended to generate a profit, either from capital gains or rental income.

Commercial real estate is for you if you are a new investor or a seasoned investor looking for opportunities to diversify your portfolio. Commercial Land’s primary focus is 

 Big corporations, businesses, warehouses, offices, shops, hotels, etc. Commercial Land may be more miniature in size, but it is essential for the country’s economy as it attracts businesses and foreign investors. In short, it is safe to say that commercial land is full of potential and opportunity.

 

Recreational Land: 

Recreational Land in Land is used for purposes of recreation, for example, sports fields, gymnasiums, playgrounds, public parks, green areas, public beaches and swimming pools, and camping sites.

Recreational Land usually consists of vast parcels of land and is used for outdoor recreational activities. Urban areas and modern cities typically have an extensive selection of recreational land because it is being used to attract the general public. Also, recreational land is essential because it attracts foreign investment and promotes local and international tourism. In short, recreational land is being used for the enjoyment of people who use it.

 

Transport land:

As the name suggests, transport land is solely dedicated to the transportation services of a region. It includes infrastructure such as roads, airports, train stations, and subway stations. These pieces of land are essential for the country because they are a sign of development and improvement in the country and a country generates a tremendous amount of revenue from transport lands.

 

Residential Land: 

Last but not least comes residential land. It is one of the most sought-after real estate products in the world, including Pakistan. Every year, hundreds of investors invest their money into residential properties. 

The primary aim of residential land is to provide good quality living facilities to the general public. Some of the most common residential properties include single-family homes, condos, cooperatives, apartments, duplexes, flats, townhouses, penthouses, studio apartments, and multifamily residences.

In short, residential land holds impeccable value because it lays the foundation of a place that comes with all the facilities and amenities needed to live a good life. 

However, suppose you are a residential land investor in Pakistan. In that case, we suggest you research and do your due diligence on the properties you are interested in. some of the things you need to consider before investing in Land in Pakistan include accessibility to the property, the closeness to local amenities, schools, roads, transport options, hospitals, crime rate, etc. 

 

So, these are some of the types of Land in Pakistan that you need to know about. We hope this blog proved to be informational to you and will help you to make well-informed investment decisions in the future.

If you have any questions or suggestions, leave a comment in the comments section below, and we will get back to you as soon as possible.

 




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Imarat Group of Companies & Graana.com secure another ICCI Achievement Award 2021 from the President of Pakistan

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One of Pakistan’s leading real estate conglomerates – Imarat Group of Companies, and Graana.com, secured the ‘Award for Excellence’ at the 4th ICCI Achievement Awards ceremony.

Chairman Imarat Group of Companies and CEO Graana.com, Mr. Shafiq Akbar, received the award from the chief guest, the President of Pakistan, Dr. Arif Alvi, at the event held at the President House Islamabad. 

This is the second award achievement of the Imarat Group of Companies. Prior to this, the group secured the ‘Leading Construction & Real Estate Group’ award in 2020.

The Islamabad Chamber of Commerce and Industries (ICCI) Awards 2021 recognised and brought to light the top-notch players in different sectors serving national economic growth.

While commenting on the achievement of winning this prestigious award, Chairman Imarat Group of Companies, Mr. Shafiq Akbar, said, “Proud moment and a huge honour as we received the ‘Award for Excellence in Business’ from President Arif Alvi on behalf of a 1500+ strong team.”

The Imarat Group shares the Government’s vision of economic growth. It is creating investment options for locals and overseas Pakistanis that will, as a result, lead to the creation of numerous job opportunities in the times to come.

Emerging as the significant disrupter of conventional real estate practices, the Imarat Group of Companies has successfully delivered profitable yet innovative real estate solutions.

Imarat group has established its nationwide presence, setting offices in major cities across Pakistan with over 1500 people tirelessly committed to embracing evolving technology to enhance their overall service delivery giving the customers all they would ever wish for.

 




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How to Attract Overseas Investment in Pakistan?

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Introduction

The wheels of an economy are powered by consumption and production activities; the higher the rate of these activities, the faster the wheel spins. The economic growth in Pakistan is led by consumption, and the local production capacity is low; therefore, the country relies on importing most of its consumer goods. One reason for this is a lower level of investment in the country’s industries. The present-day government of Pakistan believes that attracting overseas investment, especially from émigré, is a viable solution for this investment issue. This blog looks into methods to attract such investment opportunities. 

The Organisation for Economic Cooperation and Development (OECD) defines Foreign direct investment (FDI) as; “a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the direct investor.” 

In simpler terms, when a foreigner, be it an individual or an organisation, invests in Pakistan’s industries, it is called FDI. 

In recent years, FDI inflows in the country have increased, according to the World Investment Report 2020. The report states that Pakistan’s FDI increased from USD 1.7 billion to USD 2.2 billion in 2019. The Economic Survey of Pakistan states that “FDI in telecom during July-February FY2021 was $ 101.1 million. Telecom operators have invested an amount of $ 363.9 million during July-February FY2021.” Though Pakistan is getting considerable FDI in the telecom sectors, some other industries also need it.

Pakistan has many natural resources and a growing population where FDI can help it achieve economic growth, human capital development, and socioeconomic development. However, due to Pakistan’s selective judicial system, poor law and order situation and economic issues, investors don’t hold much confidence in the Pakistani economy. Pakistan’s economy is crippled by the energy crisis, lack of quality education, security concerns, lack of a knowledge economy, political instability, governance issues and taxation issues.

How can Pakistan Attract FDI?

Step 1: Identify target investors

Pakistan needs to identify who the investors are around the world and what they are interested in. A lot of groups around the world have money, like oil-rich Arab countries, Chinese, and transnational corporations. Most investors are spending on tech startups in our neighbourhood, and Google is a leading buyer of tech outputs in India. Pakistan needs to identify who it wants to invest in the country. The present government believes that the overseas Pakistanis are the best investors in the country, but they don’t possess pools of wealth like Arabs, or tech giants do. Pakistan should look into attracting Arab investors who invest in tech initiatives. Pakistan has good relations with all Arab countries, and it has a massive number of unemployed engineers who could find employment in incubation centres.

Step 2: Identify core competencies

Once it is decided which investors Pakistan wants, the next step is to identify its core competencies. Economic wisdom dictates that a country should focus on its core competencies—its strength—to achieve sustainable economic growth. In Pakistan’s case, agriculture has been its core competency, but economists have started to argue that the future of Pakistan is not in agriculture. Pakistan can begin by improving agriculture income and then invest that income to build a tech sector. If Pakistan succeeds, it has to make agriculture income a base for a knowledge-based and tech-related economy.  

Step 3: Create a legal and governance structure that gives investors’ confidence

Pakistan must introduce laws that make doing business easy in the country, and it needs to improve the governance situation to attract investors. Pakistan needs to make judicial processes easy and fast so that the investors are not afraid to lose money and be mistreated. In post-2008, investors were concerned about the country’s security condition and poor governance; thus, FDI declined in that period. Fortunately, the security conditions in the country have improved, but there is a need to work on building strong governance structures in the country. 

Step 4: Resolve energy crisis

Pakistan’s industries are at a standstill because of the power shortage to run its equipment. Pakistan’s energy crisis is the cause many investors avoid investing in the country’s industries. Instead of starting new dam debates, the country could utilise solar energy projects to feed its energy needs. Under the China Pakistan Economic Corridor, many energy projects will help provide the country’s energy needs. Pakistan can use this opportunity to increase the trust of investors.  

Conclusion

In a nutshell, FDI can be a golden opportunity for Pakistan to achieve sustainable economic growth. Pakistan can do so by first attracting investors in its tech sector as tech is the future. Before that, it needs to improve its agriculture sector and use that income to make the tech sector attractive for investors. It also needs to strengthen belief law and governance and resolve energy crisis issues to win investors’ trust. believe

 




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Online Payment Methods in Pakistan | Graana.com Blog

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The eCommerce industry in Pakistan has evolved largely since the pandemic, affecting businesses and the market to a great extent as more and more people are opting for at-home comfort. In today’s digital era, any business or customer needs to be well informed on the online payment methods especially the ones that are operating successfully and securely in Pakistan. Although the traditional COD method still serves, Payment gateways have made a significant impact on the overall health and development of the eCommerce industry. The digital world is still amassing great momentum in the economy of the world.

And for this reason, this blog aims to discuss the payment gateways and their functions that are mostly being used in Pakistan.

“A boost of $36 billion and a 7% GDP boost by 2025 is projected in a McKinsey Global Institute report on how digital finance would be a catalyst for these projected boosts, expected to create 4 million new jobs if it should keep growing.”

A payment gateway operates like a middle-man, providing financial services to both ends that are secured and fast. People use online payment methods for e-commerce as online retailing, online shopping, online bill payment, and e-business, etc. It allows the consumers with an automatic process through their debit and credit card.

Payment getaway highly depends on the nature of your business. Other than the targeted audience, and product/service market; there are many factors that need to be taken into consideration before choosing the type of payment gateway such as, effectiveness, payment flow, simplicity, service care, mobile app, service charges, integration, and checkout process.

1. Bank Transfer:

To make a bank transfer payment, all you have to do is enter the bank name and account number of the receiver in your bank mobile app. It is the easiest and fastest transaction method.

2. Wire Transfer:

Wire transfer works by sending payments through a network to any bank in the world. It is sent from one bank to another using a SWIFT code. People from any part of the world can make financial transactions securely.

4. EasyPaisa

Easypaisa was the first digital payment in Pakistan that was launched by Telenor and Tameer Microfinance Bank in 2009. A mobile application that lets users send and receive money. The EasyPaisa application also lets you recharge mobiles, buy data bundles, do online shopping & pay utility bills. The company is the third largest and has 7.4 million users.

5. JazzCash

The telecom operator Jazz introduced JazzCash in 2012 which is also a wallet-based payment system allowing users to send/receive payments, recharge mobiles, purchase data bundles and pay utility bills. It was formerly known as MobiCash.

6. Upaisa

Upaisa was launched by the telecom operator Ufone in 2013. It is a wallet-based payment method allowing users to make online transactions, pay utility bills, and recharge mobile phones. The company also offers debit cards and all other online financial services that any bank can provide.

7. Payoneer

An online payment system that is mostly used by online businessmen and freelancers all over Pakistan. Payoneer is a debit card, which users can use to draw cash via ATM and send money into their bank accounts. At the moment, Payoneer has 4 million customers. The company offers a very low transaction fee.

8. GoLootLO

A debit card-based payment system, GoLootLo was emerged by the National Bank of Pakistan. It is an online wallet that the user must recharge to operate. Customers can only make use of this system for the retailers that are registered and offering a discount.

9. PayPak

Founded in 2016, PayPak is a national payment system that was introduced in Pakistan by 1Link under the registration of the State Bank of Pakistan to provide financial services and save inter-change costs of International Payment Schemes. Currently, there are 20 banks that are operating through this payment method. A debit card system – PayPak can be used on any ATM and POS terminal in the country.

10. MoneyGram

Moneygram is also an American money transfer company that operates in Pakistan. The money gram method is specifically used to receive payments sent from abroad. A secret code is generated at the time of transaction which is needed for the receiver to get the payment.

11. Western Union

Western Union is an American multinational company used to send and receive money. This money transfer method is used globally. All you have to do is give the receiver’s location and ID number. A small fee is to be paid to transfer money. The user can also exchange currency through the western union. It is the largest and most used company providing online transactional services in 200 countries.

12. Ria Money Transfer

Ria Money Transfer has become one of the top money transfer companies in the world, specializing in money remittance. It provides online money transfers from one location to another. Amongst Pakistan, the company operates in many other countries as well. Users can send money within or outside of Pakistan.

To send money all you have to do is provide your name, number, address, and the receiver’s phone number, along with bank details. After all the details have been given, the transaction can be made.

14. Keenu Wallet

Keenu Wallet is a digital application that works as an electronic card. Owned by Wemsol Private Limited, it lets the customers exchange money through an electronic device. To register you need to set up a profile and link your account with it. Their transaction process is equipped with the latest security feature for a safe and rewarding payment flow.

15. FonePay

Driven by Mastercard, FonePay was the first and biggest electronic payment method introduced in Pakistan offering effective and easy-to-use goods and lifestyle services for businesses.

If you are running a business, all you have to do is sign up on their website and link your bank account with their platform. Businesses can receive payments from their clients with the help of QR codes. Similarly, customers or clients can also register on their website. One of the most compelling features of FonePay is that allows the customer to use multiple bank accounts.

 

If you liked our blog, talk to us by telling us about the payment method that you find the most convenient and fast. Keep reading Graana blogs to stay ahead and informed.




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Can Foreigners Own Land/Property in Pakistan?

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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.

 

Specifications

  • 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. 

 




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