REIT Investment Agreement (Pakistan)
REIT INVESTMENT AGREEMENT
Real Estate Investment Trust Regulations 2015 | Securities and Exchange Commission of Pakistan Act 1997
This REIT Investment Agreement (the 'Agreement') is entered into on [Closing Date] between:
INVESTOR:
[Investor Name] ([Investor Type]), CNIC/Reg No: [Investor CNIC Or Reg], Address: [Investor Address] ('Investor')
REIT MANAGEMENT COMPANY (RMC):
[RMC Name], SECP Licence No: [RMC Licence Number], Address: [RMC Address] ('RMC')
TRUSTEE:
[Trustee Name] ('Trustee'), holding REIT Scheme assets in trust for unit-holders under the REIT Regulations 2015.
1. REIT SCHEME
1.1 REIT Scheme Name: [REIT Scheme Name]
1.2 REIT Type: [REIT Type]
1.3 SECP Registration No: [SECP Registration Number]
1.4 Underlying Assets: [Property Description]
1.5 The REIT Scheme is constituted by the Trust Deed and Offering Document approved by SECP, which are incorporated by reference into this Agreement. In the event of conflict, the Trust Deed and Offering Document shall prevail.
2. UNIT SUBSCRIPTION
2.1 Units Subscribed: [Number Of Units] REIT Units
2.2 Price Per Unit: [Price Per Unit]
2.3 Total Subscription Amount: [Total Investment]
2.4 Payment Schedule: [Payment Schedule]
2.5 Payment shall be made by the Investor to the REIT Scheme's designated bank account maintained by the Trustee at an SBP-scheduled bank. Receipt of cleared funds by the Trustee constitutes completion of the subscription.
3. DISTRIBUTIONS
3.1 The RMC shall distribute income to unit-holders at [Distribution Frequency] in accordance with the distribution policy in the Offering Document.
3.2 The REIT Scheme shall distribute not less than 90% of its net income in each financial year in accordance with Section 53(1)(dd) of the Income Tax Ordinance 2001 to maintain the Scheme's tax-exempt status.
3.3 Withholding tax on distributions shall be deducted at [Withholding Tax Rate] under the Fourth Schedule of the Income Tax Ordinance 2001 before remittance to the Investor.
4. LOCK-IN PERIOD AND EXIT
4.1 Lock-In Period: [Lock In Period]
4.2 During the lock-in period (if any), the Investor may not transfer, pledge, or encumber the subscribed units without the prior written consent of the RMC.
4.3 Exit Mechanism: [Exit Mechanism]
4.4 Any transfer of private placement units requires prior SECP approval where required under the REIT Regulations 2015.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Investor represents that: (a) the Investor has full legal capacity to enter this Agreement; (b) the Investor meets the eligibility criteria for private placement investors under Regulation 25 of the REIT Regulations 2015; (c) the subscription funds are from legitimate sources compliant with the Anti-Money Laundering Act 2010; (d) the Investor has read and understood the Offering Document.
5.2 The RMC represents that: (a) it holds a valid SECP licence under the REIT Regulations 2015; (b) the REIT Scheme and Offering Document have been approved by SECP; (c) it will manage the REIT Scheme in accordance with the Trust Deed, Offering Document, and REIT Regulations 2015.
6. GOVERNING LAW AND DISPUTE RESOLUTION
This Agreement is governed by the laws of Pakistan, including the Securities and Exchange Commission of Pakistan Act 1997, the Real Estate Investment Trust Regulations 2015, and the Contract Act 1872. Disputes shall be referred to SECP's dispute resolution mechanism and, if unresolved, to arbitration in Islamabad or Karachi under the Arbitration Act 1940.
EXECUTION
Executed on [Closing Date] by the duly authorised representatives of the parties.
INVESTOR: [Investor Name]
Signature: _________________________ Date: _____________
REIT MANAGEMENT COMPANY: [RMC Name]
Signature: _________________________ Date: _____________
Investor
________________
Signature
REIT Management Company (RMC)
________________
Signature
What Is a REIT Investment Agreement (Pakistan)?
A REIT Investment Agreement in Pakistan governs the arrangement between the parties and the conditions on which it operates.
Pakistan's REIT regulatory framework was first established by the Real Estate Investment Trust Regulations 2008, subsequently replaced and significantly expanded by the SECP's Real Estate Investment Trust Regulations 2015. The 2015 Regulations define a REIT Scheme as a collective investment scheme that pools investor capital to invest primarily in income-generating real estate assets — commercial property, residential developments, industrial parks, and special purpose real estate projects — and distribute the majority of income to unit-holders. REIT Management Companies licensed by SECP under Regulation 5 of the REIT Regulations 2015 are responsible for managing REIT Schemes, appointing trustees, and confirming compliance with SECP regulations.
REIT Schemes in Pakistan are structured as either Developmental REITs (D-REITs) — which develop and sell real estate projects — or Rental REITs (R-REITs) — which acquire and hold income-generating properties for rental distribution. The Finance Act 2021 introduced significant tax incentives for Pakistani REITs: REIT Schemes are exempt from income tax on rental income and capital gains under Section 53(1)(dd) of the Income Tax Ordinance 2001, subject to distributing at least 90% of net income to unit-holders annually. Individual investors in REIT Schemes receive dividend income from unit distributions, which is subject to withholding tax at the rate specified under the Fourth Schedule of the Income Tax Ordinance 2001.
REIT Units listed on the Pakistan Stock Exchange (PSX) can be freely traded during market hours under PSX's Equity Market Regulations. Non-listed REIT Units issued through private placement under Regulation 25 of the REIT Regulations 2015 are subject to lock-in periods and transfer restrictions specified in the REIT Constitutive Documents — the Offering Document (equivalent to a prospectus), the Trust Deed, and the REIT Investment Agreement.
The REIT Management Company (RMC) is supervised by SECP's Non-Banking Finance Companies Division. SECP reviews and approves REIT Scheme offering documents before any public offering or private placement of REIT Units can proceed. The Trustee — a bank or financial institution approved by SECP — holds the REIT Scheme's assets in trust for the benefit of unit-holders and provides an independent check on the RMC's management of the scheme. Major REIT Management Companies licensed by SECP include Arif Habib REIT Management Company, Dolmen City REIT, and Maple Leaf Capital, each managing schemes listed on the Pakistan Stock Exchange.
The legal framework governing the REIT Investment Agreement (Pakistan) in Pakistan draws on several key statutes and regulatory bodies. Under the State Bank of Pakistan (SBP) Act 1956, the SBP regulates banking. The Securities and Exchange Commission of Pakistan (SECP) regulates capital markets under the Securities Act 2015. Section 4 of the Negotiable Instruments Act 1881 governs promissory notes. The Federal Board of Revenue (FBR) administers tax obligations under the Income Tax Ordinance 2001. The Sales Tax Act 1990 governs indirect taxation. Parties executing a REIT Investment Agreement (Pakistan) in Pakistan should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Real Estate Investment Trust Regulations 2015 sets the foundational requirements.
When Do You Need a REIT Investment Agreement (Pakistan)?
A REIT Investment Agreement in Pakistan is needed whenever an investor subscribes for units in a Real Estate Investment Trust Scheme through a private placement or negotiated subscription outside a public offer on the Pakistan Stock Exchange.
A REIT Investment Agreement is needed when a high-net-worth individual (HNWI) or institutional investor subscribes for units in a Developmental REIT (D-REIT) through a private placement under Regulation 25 of the REIT Regulations 2015. D-REITs often raise capital through private placements before projects reach completion and public listing, and the investment agreement documents the investor's commitment, the conditions precedent to completion, the unit price, and the expected development timeline and exit strategy.
A REIT Investment Agreement is needed when a corporate investor — such as a pension fund, insurance company regulated by the Insurance Ordinance 2000, or mutual fund managed under the Non-Banking Finance Companies Rules 2003 — makes a strategic investment in a Rental REIT (R-REIT) for long-term income return. Institutional investors typically negotiate customised terms beyond the standard REIT offering document, and these terms are documented in an investment agreement supplemental to the constitutive documents.
A REIT Investment Agreement is needed when a foreign investor — a non-resident Pakistani or a foreign national — invests in a Pakistani REIT under the Board of Investment (BOI) foreign investment regime and SBP's foreign exchange regulations. The agreement must address the investor's repatriation rights under the Foreign Exchange Regulation Act 1947 (as amended) and SBP's Foreign Exchange Manual, the applicable withholding tax treatment under Pakistan's Double Taxation Agreements (DTAs) with the investor's home country, and the regulatory approvals required under the REIT Regulations 2015 for foreign participation.
A REIT Investment Agreement is needed when a property developer enters a joint arrangement with a REIT Management Company to contribute real estate assets to a Developmental REIT in exchange for REIT Units. The agreement documents the asset contribution terms, the valuation methodology approved by an SECP-empanelled valuer, the unit issuance mechanism, and the developer's lock-in and exit rights after project completion.
Parties in Pakistan should prepare a REIT Investment Agreement (Pakistan) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the State Bank of Pakistan (SBP) Act 1956, the SBP regulates banking. The Securities and Exchange Commission of Pakistan (SECP) regulates capital markets under the Securities Act 2015. Section 4 of the Negotiable Instruments Act 1881 governs promissory notes. The Federal Board of Revenue (FBR) administers tax obligations under the Income Tax Ordinance 2001. The Sales Tax Act 1990 governs indirect taxation. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your REIT Investment Agreement (Pakistan)
A complete and legally effective REIT Investment Agreement in Pakistan under the Real Estate Investment Trust Regulations 2015 must contain the following essential provisions.
Parties and REIT Identification: Full legal names of the investor and the REIT Management Company (RMC) licensed by SECP, the REIT Scheme name and SECP registration number, the name and details of the Trustee bank or financial institution holding the scheme assets, and the scheme's constitutive documents (Trust Deed and Offering Document) which are incorporated by reference.
Unit Subscription Details: Number of REIT Units to be subscribed, the subscription price per unit, the aggregate subscription amount in Pakistani Rupees (PKR), the basis for unit pricing (net asset value (NAV) per unit, fixed price, or auction price), and the payment schedule. For D-REIT subscriptions, the agreement should address staged capital calls tied to project development milestones.
Representations and Warranties: The investor's representations regarding investment eligibility — confirmation that the investor meets the minimum eligibility criteria under Regulation 25 of the REIT Regulations 2015 for private placements, has sufficient financial capacity, and has obtained any required regulatory approvals. For institutional investors, representations of due authorisation under their own constitutional documents and the relevant regulatory frameworks (for example, SBP authorisation for bank investments, SECP approval for insurance company investments under the Insurance Ordinance 2000).
Distribution Rights: The distribution policy applicable to the subscribed units — frequency of distributions (typically quarterly or semi-annually for R-REITs), the minimum distribution requirement under Section 53(1)(dd) of the Income Tax Ordinance 2001 (90% of net income), and the mechanism for calculating the distributable income per unit based on audited REIT Scheme financial statements.
Lock-in and Transfer Restrictions: For D-REIT private placement units, the lock-in period during which units cannot be transferred or pledged — typically until project completion or public listing. Transfer restrictions, right of first refusal for the RMC or existing unit-holders, and the process for obtaining RMC or SECP approval for any transfer during the restricted period.
Exit Mechanism: The investor's exit rights — whether through PSX listing and open-market sale of listed REIT Units, a put option requiring the RMC or a designated third party to purchase the units at a specified price or formula, or a redemption right in the event of scheme termination or the investor's exercise of a contractual exit trigger.
Governance Rights: Any special governance rights conferred on the investor beyond standard unit-holder rights — such as observer rights on the Investment Committee, veto rights over material asset acquisitions or disposals, or information rights to quarterly unaudited financial statements of the REIT Scheme.
Tax Treatment Acknowledgment: Acknowledgment by the investor of the applicable withholding tax on REIT distributions under the Fourth Schedule of the Income Tax Ordinance 2001, the investor's responsibility for their own tax returns and declarations to FBR, and the treatment under any applicable Double Taxation Agreement.
Forms-legal.com provides this REIT Investment Agreement (Pakistan) template as a practical starting point for investors and REIT Management Companies. Given the complex regulatory requirements of the SECP REIT Regulations 2015 and the significant financial stakes involved, parties should engage a Karachi or Islamabad-based securities lawyer enrolled with the Pakistan Bar Council and familiar with SECP capital markets regulations before executing a REIT Investment Agreement.
Additional compliance elements for a REIT Investment Agreement (Pakistan) used in Pakistan include: Under the State Bank of Pakistan (SBP) Act 1956, the SBP regulates banking. The Securities and Exchange Commission of Pakistan (SECP) regulates capital markets under the Securities Act 2015. Section 4 of the Negotiable Instruments Act 1881 governs promissory notes. The Federal Board of Revenue (FBR) administers tax obligations under the Income Tax Ordinance 2001. The Sales Tax Act 1990 governs indirect taxation. Forms-legal.com provides this template as a starting point for Pakistan-compliant documentation.
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title = {REIT Investment Agreement (Pakistan) (Pakistan)},
year = {2026},
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note = {Free legal document template}
}Frequently Asked Questions
A Real Estate Investment Trust (REIT) in Pakistan is a collective investment scheme that pools capital from multiple investors to invest in income-generating real estate assets, distributing rental income and capital gains as dividends to unit-holders. Pakistani REITs are regulated by the Securities and Exchange Commission of Pakistan (SECP) under the Real Estate Investment Trust Regulations 2015, issued under the SECP Act 1997. SECP licenses REIT Management Companies (RMCs) to establish and manage REIT Schemes, and requires all REIT Schemes intended for public investment to be registered with SECP and listed on the Pakistan Stock Exchange (PSX). The trustee of a REIT Scheme — responsible for holding assets in trust for unit-holders — must be an SECP-approved bank or financial institution. Pakistan has two primary REIT structures: Developmental REITs (D-REITs) that develop real estate projects for sale, and Rental REITs (R-REITs) that acquire and hold properties for rental income. The major listed REITs on PSX include Dolmen City REIT and Arif Habib Dolmen REIT.
REIT investments in Pakistan offer significant tax advantages under the Income Tax Ordinance 2001 as amended by successive Finance Acts. REIT Schemes themselves are exempt from income tax on rental income and capital gains under Section 53(1)(dd) of the Income Tax Ordinance 2001, provided that the REIT distributes at least 90% of its net income to unit-holders annually — this pass-through tax treatment avoids double taxation at the scheme level. Individual investors in REIT Schemes receive dividend distributions that are subject to withholding tax at the rate applicable under the Fourth Schedule of the Income Tax Ordinance 2001 — currently 15% for filers and 30% for non-filers of income tax returns. Capital gains on the sale of listed REIT units on the Pakistan Stock Exchange (PSX) are subject to Capital Gains Tax (CGT) under Section 37A of the Income Tax Ordinance 2001, with the rate depending on the holding period. For foreign investors from countries with which Pakistan has a Double Taxation Agreement (DTA) — the United Kingdom, UAE, China, and others — reduced withholding tax rates on REIT distributions may be available under the applicable DTA, subject to FBR approval and the investor providing a tax residency certificate.
Yes. Foreign investors can participate in Pakistani REITs under Pakistan's foreign investment regime administered by the Board of Investment (BOI) and the State Bank of Pakistan (SBP). Foreign nationals and non-resident Pakistanis can purchase listed REIT units on the Pakistan Stock Exchange (PSX) through a Special Convertible Rupee Account (SCRA) opened with an SBP-scheduled bank, as permitted under SBP's Foreign Exchange Manual. The SCRA mechanism allows foreign investors to remit foreign currency into Pakistan, convert to Pakistani Rupees for share and unit purchases, and repatriate proceeds upon sale without requiring prior SBP approval. For private placement investments in non-listed REIT Schemes, foreign investors require prior approval from the SECP and the REIT Management Company, and must satisfy the anti-money laundering (AML) and Know Your Customer (KYC) requirements under the Anti-Money Laundering Act 2010 and SBP's AML/CFT regulations. Distributions (dividends) from REIT investments are remittable abroad subject to applicable withholding tax deduction, with the net amount transferable through normal banking channels under SBP's current account liberalisation policy.
The minimum investment in a Pakistani REIT depends on the type of REIT and how it is accessed. For listed REIT units traded on the Pakistan Stock Exchange (PSX), the minimum investment is one trading lot — PSX determines lot sizes, and for REIT units this is typically 500 units per lot, meaning the minimum investment is the price of 500 REIT units at the prevailing market price. At average REIT unit prices on PSX (ranging from PKR 10 to PKR 50 per unit depending on the scheme), the minimum investment for listed REIT units can be as low as PKR 5,000 to PKR 25,000, making REITs accessible to retail investors. For private placement units in Developmental REITs (D-REITs) or Rental REITs not yet listed on PSX, the SECP's Real Estate Investment Trust Regulations 2015 set a minimum private placement investment amount under Regulation 25 — typically PKR 2.5 million or higher for eligible institutional and high-net-worth investors. The specific minimum for any individual REIT is specified in the REIT's Offering Document approved by SECP.
If a REIT Management Company (RMC) in Pakistan becomes insolvent or fails, the interests of unit-holders are protected by the structural separation between the REIT Scheme assets and the RMC's own assets. Under the Real Estate Investment Trust Regulations 2015, REIT Scheme assets are held by an independent Trustee — a bank or financial institution approved by SECP — in trust for the unit-holders. The Trustee's custodial role means that REIT assets cannot be attached by the RMC's creditors in insolvency proceedings under the Companies Act 2017. If an RMC becomes insolvent, SECP has authority under the SECP Act 1997 to appoint a replacement RMC to manage the REIT Scheme, ensuring continuity of operations and protection of unit-holders' interests. Unit-holders retain their beneficial ownership of the underlying real estate assets throughout any RMC insolvency event. The SECP maintains a compensation fund under its Securities (Investor Protection) Regulations that provides additional protection in the event of fraud or misappropriation by regulated entities, though the fund is primarily oriented toward brokerage rather than fund management insolvency.
REIT distributions in Pakistan are calculated and paid by the REIT Management Company (RMC) based on the REIT Scheme's distributable income — the net rental income, dividend income, and realised capital gains of the scheme after deduction of management fees, trustee fees, property maintenance costs, and other permitted expenses. Under Section 53(1)(dd) of the Income Tax Ordinance 2001, REIT Schemes must distribute at least 90% of their net income in each financial year to maintain their tax-exempt status — this mandatory distribution requirement ensures regular income for unit-holders. Distributions are typically made quarterly for Rental REITs (R-REITs) generating regular rental income, and at project completion or listing milestones for Developmental REITs (D-REITs). Each distribution per unit is calculated by dividing the total distributable amount by the total number of outstanding REIT units. For listed REIT units, distributions are paid through the Central Depository Company of Pakistan (CDC) to investors' CDC accounts or directly to their designated bank accounts. The RMC deducts withholding tax on distributions at the applicable rate under the Fourth Schedule of the Income Tax Ordinance 2001 before remitting the net amount to unit-holders.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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