Real Estate Investor Suggests Tax Breaks to Boost FDI

ISLAMABAD: A prominent international investor in the real estate market has strongly advised implementing a decade-long tax exemption for Foreign Direct Investment (FDI) in the property sector. Additional recommendations include the ability to freely move profits and the establishment of a specialized regulatory body under the Special Investment Facilitation Council (SIFC).

During a conversation with select journalists on Friday, Tarek Hamdy, CEO of EIGHTEEN Housing, highlighted both the significant challenges and potential opportunities present within Pakistan’s real estate landscape. The core proposals from the foreign investor are geared toward improving regulatory structures, boosting foreign investment, and simplifying bureaucratic procedures to stimulate economic advancement.

Tarek Hamdy stressed the critical need for experts to be appointed as members of the regulatory authority for the real estate industry. He acknowledged the SIFC for its vital role in assisting foreign investors and streamlining investment processes across various sectors of Pakistan’s economy.

Sharing his insights, he noted that the creation of the SIFC was a beneficial move toward minimizing bureaucratic obstacles, building investor assurance, and cultivating a more favorable business climate. To further enhance the SIFC’s effectiveness, Hamdy suggested broadening its structure by including subject matter experts, economists, legal professionals, and experienced individuals from diverse sectors and financial industries to guarantee well-rounded and knowledgeable decision-making.

A crucial element of Hamdy’s proposals is centered on fostering a more appealing and reliable investment environment for global investors via ambitious and strategic fiscal incentives. He firmly advocated for a ten-year tax holiday specifically designed for Foreign Direct Investment (FDI) within the real estate sector — an industry he believes possesses considerable untapped capacity to foster economic growth and urban development. Moreover, he emphasized the paramount importance of providing a straightforward and secure mechanism for profit repatriation, which would demonstrate to global investors that Pakistan is receptive to business on competitive and investor-friendly terms.

The CEO of Eighteen questioned why international investors would be expected to invest their funds in Pakistan without guarantees of substantial returns or a well-defined exit plan. He stated, “Why would a foreign investor invest their money here if they can’t take it back with profit?” He underscored the fundamental necessity of Return On Investment (ROI) as a keystone of international capital flow.

Tarek Hamdy also raised concerns about the critical problem of excessive taxation in the real estate sector, identifying it as a major barrier to growth and investor confidence. He contended that overly high and often unpredictable taxation has become a significant burden on the sector, directly impacting sales volumes and deterring both domestic and international investment. He stated, “When taxes increase, sales decrease. It’s a simple equation,” advocating for a more sensible and equitable tax policy that supports development rather than hindering it.

He criticized the actions of specific revenue authorities, alleging that instead of supporting legitimate projects, some institutions have used intimidation tactics. He highlighted how investors and developers often face sudden raids and pressure without solid legal justification. He specifically mentioned an instance involving the Federal Board of Revenue (FBR) and the Punjab Revenue Authority (PRA), where EIGHTEEN Housing was targeted by such actions. He stated, “They raided our offices and attempted to undermine our credibility, but when the matter was brought before the courts, they could not substantiate any of their claims.”

He described these actions as not only harassment but also as severely detrimental to Pakistan’s investment climate. “You can’t expect individuals to invest in an environment where regulatory bodies act like bullies instead of facilitators,” he noted.

Addressing bureaucratic obstacles, Hamdy lamented the difficulties caused by conflicting laws and regulations across various government entities involved in approvals. He pushed for the adoption of a streamlined, single-window operation strategy, empowering bodies like the Board of Investment (BOI) to promote smoother processes and decrease bureaucracy.

Tarek Hamdy expressed significant worries about the uncontrolled expansion of illegal housing societies throughout Pakistan, calling it one of the most serious dangers to the real estate sector’s reliability and stability. He emphasized how these unregulated entities operate without proper approvals or oversight, exploiting legal ambiguities and a lack of coordinated regulatory enforcement. Consequently, numerous individuals — particularly Pakistanis living abroad — have become victims of complex scams, investing their hard-earned savings in projects that either do not exist or never come to fruition.

Hamdy also suggested establishing a centralized digital registry that includes all housing societies in Pakistan — a step he believes is essential for restoring transparency and investor confidence in the real estate industry. He proposed that this registry serve as a publicly accessible platform where investors, particularly those living overseas, can confirm the legal status, No-Objection Certificates (NOCs), development progress, and regulatory approvals of any housing project before investing their money.