Repatriation of profit, dividend by foreign companies in Pakistan surges by 58 percent

Repatriation of profit, dividend by foreign companies in Pakistan surges by 58 percent

The State Bank of Pakistan (SBP) has reported a substantial increase of 58 percent in the repatriation of profits and dividends by foreign companies operating in Pakistan during the first half of the current fiscal year.

According to statistics released on Monday, the repatriation of profit/dividend reached $1.202 billion from July to December 2018, compared to $759.5 million in the corresponding period of the previous year.

Industry experts attribute this surge in repatriation to the profitability of foreign companies engaged in various sectors, including oil and gas exploration, telecommunications, food, and financial services. The robust performance of these industries has contributed significantly to the overall increase in repatriated funds.

Telecommunication companies emerged as major contributors to this trend, with profit repatriation surging almost fourfold to $166.6 million during the first half of the fiscal year, compared to $33.8 million in the same period of the previous fiscal year. This considerable increase highlights the profitability and growth in the telecommunications sector.

Foreign energy companies operating in Pakistan also saw a notable uptick in profit repatriation, experiencing a 100 percent rise to $141.4 million during the first six months of the current fiscal year, up from $70.6 million in the corresponding months of the previous fiscal year. This increase underscores the positive performance of the energy sector and its attractiveness to foreign investors.

The financial business sector witnessed a 55 percent surge in profit/dividend repatriation, reaching $175.5 million during the first half of the current fiscal year, compared to $113.2 million in the same period of the previous fiscal year. This growth reflects the confidence of foreign financial institutions in the stability and potential of Pakistan’s financial market.

Foreign food companies also played a significant role in this upward trend, with profit/dividend repatriation posting a 55 percent increase to $129.8 million during July to December 2018, up from $83.7 million in the same period of the previous year. The growth in this sector indicates the success and profitability of foreign food businesses operating in the country.

Breaking down the country-wise repatriation of profit/dividend, the United Kingdom topped the list with $260.2 million, followed by the United Arab Emirates with $133.8 million, Switzerland with $131.8 million, Malta with $129.8 million, and the United States with $108 million.

While the surge in repatriation reflects positively on the profitability of foreign investments in Pakistan, it also emphasizes the need for a balanced approach to ensure continued economic growth and sustainability. The government and relevant authorities may consider strategies to attract and retain foreign investment for the long term, fostering a mutually beneficial environment for both foreign companies and the local economy.