Investing in Real Estate by Pakistanis Living Abroad
Overseas Pakistanis contribute significantly to the national economy. Remittances paid by Pakistanis living abroad assist to stabilize the country’s foreign currency reserves and encourage Foreign Direct Investment (FDI).
There are around nine million Pakistanis living in various countries, with the majority residing in the Gulf area, including the United Arab Emirates, Saudi Arabia, and western nations such as the United Kingdom and the United States.
The vast majority of abroad Pakistanis have immigrated to other nations in order to make a livelihood and support their family back home. Millions of Pakistani laborers have relocated to Middle Eastern nations to make a livelihood since the 1980s.
Pakistanis are now one of the biggest Diasporas in the Middle East. These abroad Pakistanis have friends and family in their native towns and villages in Pakistan to whom they send remittances.
According to the latest numbers from the State Bank of Pakistan (SBP), 8 billion USD in remittances were transferred during the first quarter of the current fiscal year, representing a 12.5 percent increase over the same time last year.
Furthermore, half of all remittances are invested in Pakistan’s real estate industry. This is due to the fact that real estate in Pakistan is seen as a more secure investment route when compared to others such as stocks, bonds, and securities.
Overseas Pakistanis and their real estate investments, on the other hand, have faced fraud, corruption, and other malpractices.
Many Pakistanis living abroad have stated that their commercial or residential real estate assets have been taken over by land-grabbing mafias prominent in Pakistan’s real estate industry.
It is difficult for abroad Pakistanis to initiate lawsuits and aggressively prosecute their claims against land grabbers in Pakistani courts.
Aside from land mafias, some commercial banks and property dealers have made it difficult for outside Pakistani investors. Documentary evidence presented by media outlets demonstrates how dishonest commercial banks have trapped assets from Pakistanis living abroad.
According to claims from the Ministry of Overseas Pakistanis, banks have been defrauding ex-pats for decades under the guise of payment verification.
Overseas Pakistanis have expressed their concerns on many venues, including Pakistan’s Mission Abroad and the OP Grievance Cell of Pakistan’s Supreme Court. They have called for the formation of a regulating body to avoid such malpractices and scams.
Currently, 69 percent of Pakistan’s housing societies are unlawful. Their main consumer is foreign Pakistani who has difficulty verifying the genuineness of their items.
Given the misery of foreign Pakistanis and their investments that have come to a halt in Pakistan, the present government has launched a big crackdown on unlawful housing societies that sell to overseas Pakistanis.
The government has also launched a number of services to simplify the process of transferring remittances to Pakistan. The Roshan Digital Accounts (RDA) and Roshan Apna Ghar (RAG) schemes are two significant government efforts aimed at attracting prospective investments from the nine million Pakistanis residing abroad.
The RDA is a banking facility for non-resident Pakistanis (NRPs) that allows them to receive financial services in Pakistan without having to visit a consulate, embassy, or physical bank branch.
The RAG is the government’s most recent endeavor to give genuine residential real estate investment opportunities to NRPs. The goal of these two programmers is to make it easier for Pakistanis living abroad to invest their money safely and securely in their native country.
In this regard, the State Bank of Pakistan (SBP) has functioned as a regulator. According to SBP Governor Reza Baqir, increased remittances from abroad Pakistanis would not only assist the particular industry but will also enhance Pakistan’s ranking on the Ease of Doing Business Index (EODB).
There is currently no real estate regulatory body in Pakistan; hence the SBP has filled that position in a variety of ways. The SBP is the major regulator for the RDA and RAG, and it assists foreign Pakistanis in making safe investments in Pakistan.
Overseas Pakistanis are an important source of investment for the Pakistani economy in general, and the real estate industry in particular. The government must put in place necessary safeguards to allow Pakistanis living abroad to protect their assets without the risk of fraud or corruption.
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