Over the past four years, i2i has worked closely with young entrepreneurs in Pakistan, and have noted the overarching lack of information in the startup space, particularly as it relates to both local and foreign investors. Pakistan is a tricky environment to navigate and understand, and it is vital to equip investors with the right tools to make informed investment decisions, as well as the know-how to mobilize and deploy that capital. The i2i Investor Toolkit, in partnership with lawyers Zahid Jamil from Jamil & Jamil and with contribution from Mubariz Siddiqui, aims to be a 101 Guide to help you deploy your capital, remit your profits, and know all the laws and policies to ensure the process is as smooth as possible.
Who is it for
This toolkit will help local and international investors understand how to navigate the Pakistani market.
This toolkit will help entrepreneurs understand the mindset of the investors.
This toolkit will give stakeholders a better understanding about the vehicles and process of investment in Pakistan.
While this is not an alternative to legal advice, it is a very welcome first by anyone so far to provide valuable caution to those investing in Pakistan to avoid issues they are not always made aware of, but that have affected several investors.Zahid Jamil
This toolkit is essential for anyone looking to benefit from investments in the rapidly growing tech sector in Pakistan – a market of potentially 200 million people.Mubariz Siddiqui
Here’s a sneak peek at the Investor Toolkit:
Can anyone invest in a Pakistan-based company?
Once I invest my money in Pakistan, how do I get my money out?
Although there are no restrictions on remittances entering Pakistan, foreign investors must be careful about money that leaves the country. In other words, before a foreign investor invests money into a Pakistani company, they must designate whether the money is “repatriable” (can leave) or “non-repatriable” (stays in Pakistan). If they want their investment returns to be transferred outside of Pakistan, the foreign investor must apply for a Proceeds Realization Certificate (PRC) from the State Bank of Pakistan prior to remitting funds to Pakistan, a process that should take around a week. The PRC allows a foreign investor to repatriate the returns from their investment.
If you are a local investor, your returns from your investment capital are paid in Pakistan. Although the returns must stay in the country, there are ways for that money to be taken out if you are an individual investor. One way would be to open an FE25 or another type of foreign currency bank account that allows money to be transferred outside of the country more easily, but can only be remitted from individual to individual. A local investor should confer with a bank for more detailed advice, as well as for advice on what do for a local investment company.
What Pakistani regulatory bodies should I pay attention to as an investor?
Are there restrictions on how much money I can invest in a Pakistan-based company?
How can I protect myself as an investor?
Investors should ensure they are receiving copies of all filings that take place at the SECP (companies are meant to report to the SECP if they buy/sell shares, call a board meeting, change management, etc.). This information is not readily available online, so investors in Pakistan can appoint a lawyer on the ground to watch the SECP and alert them if there were any filings or changes in corporate governance. Investors also have the right under the Company’s Ordinance to access the company’s books, and they should also maintain contact with the company’s auditors and accountants, where possible and appropriate, in order to further manage risk.
Download the full toolkit
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