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SAZH-TAF Report on FDI

Trust System - Guarantee and Vetting System

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To address the concerns of foreign investors in correctly identifying the market, it was shared that as various incubators exist which are promoting startups, the investment protection pipeline should look after the interests of the investors by creating a guarantee and vetting system.

 

This would be a system in which a process of “pre-qualification” would be promoted and the companies or startups looking to seek investment could undergo a process of screening and due diligence. This would make the process of entering Pakistan less daunting for the foreign investors and ease their barriers of entry.

 

 The system could also act as an escrow in transactions, and more importantly could play a pivotal role in real estate transactions where a system of protection is vital bearing in mind that the first transaction an investor makes tends to be related to real estate. Yet due to the various players in the market who could mislead or waylay the investors, an element of security and protection should be baked into the trust system for such transactions. The business plan for the same is something the private sector has been engaged in for some time, yet it needs to structure together with the trust system.

 

 It was thus recommended that the legal experts, real estate experts, and relevant government departments could be targeted by the trust system to offer better security to such real estate transactions within the pipeline.

 

 Hence a Model Guarantee and Vetting System be created within the Trust System in connection with BOI that would pre-qualify potential companies for investment, as well as create an escrow system to protect transaction. Furthermore, BOI and the relevant land authorities could be collaborated with to create an appropriate Real Estate protection service within the Trust System.

 


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