Karachi, July 20, 2024 – Pakistan has experienced a remarkable 153 percent increase in total foreign investment during the fiscal year 2023-24. According to the State Bank of Pakistan (SBP), the total foreign investment soared to $1.52 billion, up from $601 million in the preceding fiscal year.
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Foreign Profit Repatriation Surges 161% Before Pakistan Elections
Karachi, January 27, 2024 – In a startling revelation, official data released by the State Bank of Pakistan (SBP) on Friday disclosed a staggering 161 percent surge in foreign profit and dividend repatriation from Pakistan in the first half of the fiscal year 2023-24.
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Foreign direct investment into Pakistan plunges by 52pc in 4MFY23
KARACHI: Foreign direct investment (FDI) into Pakistan has plunged by 52 per cent during first four months (July – October) of fiscal year 2022-2023 (4MFY23).
According to data released by the State Bank of Pakistan (SBP) on Monday the FDI fell to $348 million during the first four months of the current fiscal year as compared with $726 million in the corresponding months of the last fiscal year.
READ MORE: Foreign direct investment in Pakistan plunges by 47% in 1QFY23
The data showed the inflows under the FDI fell by 40.3 per cent to $514 million during the period under review as compared with $862 million in the corresponding period of the last fiscal year.
On the other hand outflows under the head of FDI recorded an increase of 22.4 per cent to $166.2 million during July – October 2022 as compared with $136 million in the same period of the last fiscal year.
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The outflow from stock market recorded a decline of 91 per cent during first four months. The foreign portfolio investment recorded an outflow of $15.6 million during July – October 2022 as compared with the outflow of $178.5 million in the same period of the last fiscal year.
READ MORE: Asian Bank approves $1.5 billion to finance Pakistan
The net inflow of total foreign private investment recorded a decline of 39 per cent to $333 million during the period under review as compared with $548 million in the corresponding period of the last fiscal year.
Meanwhile, the public debt securities witnessed a decline in outflow during the period to $18.2 million when compared with the outflow of $60.1 million.
READ MORE: Pakistan’s weekly forex reserves increase nominally
The total foreign investment plunged by 36 per cent to $315 million during first four months of the current fiscal year as compared with $488 million in the corresponding period of the last fiscal year.
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Foreign Investment into Pakistan plunges by 59% during 11MFY22
KARACHI: Total foreign investment into Pakistan has declined by 59 per cent to $1.59 billion during first 11 months (July – May) of fiscal year 2021/2022, according to data released by the State Bank of Pakistan (SBP) on Friday.
The inflows of foreign investment into the country were $3.85 billion during the corresponding period of the last fiscal year.
READ MORE: Foreign investment falls by 57% in 10MFY22: SBP
Total foreign private investment recorded a 12.5 per cent decline to $1.22 billion during 11 months of the current fiscal year as compared with $1.39 billion in the same months of the last fiscal year.
Foreign Direct Investment (FDI), the major component of the foreign private investment, fell by 5 per cent to $1.68 billion during the months under review as compared with $1.6 billion in the corresponding period of the last fiscal year.
READ MORE: Foreign investment into Pakistan surges by 131%
The portfolio investment, the other component of the foreign private investment, has recorded a fall of 32.3 per cent during the period. The investment in the capital market recorded an outflow of $378 million during July – May 2021/2022 as compared with outflow of $286 million in the same period of the last fiscal year.
READ MORE: Foreign investment surges by 176% during July – January
The inflow in debt securities under foreign public investment was $367 million during first 11 months of the current fiscal year as compared with $2.46 billion in the same months of the last fiscal year.
READ MORE: Pakistan’s foreign investment surges by 73% in 5 months
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Foreign investment surges by 176% during July – January
KARACHI: The overall inflow of foreign investment in the country recorded 176 per cent during first seven months (July – January) 2021/2022 due to the inflows of debt securities to the tune of $1.057 billion received in January 2022, according to data released by the State Bank of Pakistan (SBP) on Thursday.
The total foreign investment increased to $1.817 billion during the first seven months of the current fiscal year as compared with $659 million in the corresponding months of the last fiscal year.
READ MORE: Pakistan’s foreign investment surges by 73% in 5 months
The net foreign private investment is showing increase of 5.7 per cent to $859 million during July – January 2021/2022 as compared with $812.4 million.
The net inflow of foreign direct investment (FDI), a major component of foreign private investment, into Pakistan has recorded 11.3 per cent during first seven months (July – January) of 2021/2022.
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The net inflow of the foreign direct investment increased to $1.17 billion during first seven months of the current fiscal year as compared with $1.05 billion in the corresponding period of the last fiscal year.
The increase in net inflow of FDI can be attributed to significant contraction in outflow during the period. The outflow fell by 40 per cent to $468.7 million during the period under review as compared with the outflow of $786 million in the same period of the last fiscal year.
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However, the portfolio investment, the other component of foreign private investment, recorded a 31 per cent decline during first seven months of the current fiscal year. The outflow under foreign portfolio investment recorded at $308 million during July – January 2021/2022 as compared with outflow of $236 million in the corresponding period of the last fiscal year.
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Pakistan’s foreign investment surges by 73% in 5 months
KARACHI: Pakistan’s total foreign investment surged by 73 per cent during the first five months of the current fiscal year, according to data released by the State Bank of Pakistan (SBP) on Friday.
The total foreign investment increased to $455.5 million during July – November 2021/2022 as compared with $263.4 million in the same period of the last fiscal year.
The total foreign private investment registered a growth of 1.8 per cent to $534 million during the first five months of the current fiscal year as compared with Rs525 million in the same period of the last fiscal year.
Out of total foreign private investment, the Foreign Direct Investment (FDI) registered a growth of 12.3 per cent to $797.7 million during the first five months of the current fiscal year as compared with $710 million in the corresponding period of the last fiscal year.
The other component of the foreign investment, the portfolio investment registered a decline of 42 per cent. The portfolio investment recorded an outflow of $263 million during the first five months of the current fiscal year as compared with the outflow of $185.5 million in the corresponding period of the last fiscal year.
The foreign public investment recorded an increase of 70 per cent due to decline in outflow of investment against debt securities. The outflow in debt securities recorded $79 million during July – November of fiscal year 2021/2022 as compared with the outflow of $261 million in the same period of the last fiscal year.
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Foreign investors repatriate $892 million during 1HFY21
KARACHI: The foreign companies operating in Pakistan have repatriated around $892 million as profit and dividend during first half (July – December) of fiscal year 2020/2021 (1HFY21), according to data released by State Bank of Pakistan (SBP) on Tuesday.
The repatriation of profit and dividend was 6.7 percent higher when compared with $836 million in the same half of the last fiscal year.
An amount of $840 million was repatriated during the first half of the current fiscal year against foreign direct investment (FDI) as compared with $743 million in the same half of the last fiscal year, showing an increase of 13 percent.
The repatriation of funds against portfolio investment, however, fell to $52.2 million as during the half under review as compared with $93 million in the same half of the lat fiscal year.
Major repatriation was witnessed in food sector which recorded $172.9 million against the total foreign investment during July – December 2020/2021 as compared with $54.6 million in the same period of the last fiscal year.
The foreign companies engaged in telecommunications repatriated around $105 million during the first half of the current fiscal year as against $26 million in the same half of the last fiscal year.
The repatriation of profit and dividend by companies in financial businesses reduced to $133.5 million during the half under review as compared with $155.6 million in the same half of the last fiscal year.
The profit repatriation by beverage companies also witnessed increase to $39 million during the period under review as compared with $28 million in the corresponding period of the last fiscal year.
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Massive tax relief announced for foreign investment in debt securities
KARACHI: The government has announced massive tax relief to foreign investment in debt securities considering the attractive environment due to higher interest rate in the country.
The foreign investment in domestic debt market including government securities including Market Treasury Bills and Pakistan Investment Bonds, is around $1.5 billion during first six month (July – December) of 2019/2020 and in total it is around $2 billion when investment included in the equity market.
Through Tax Laws (Second Amendment) Ordinance, 2019, the government facilitated the foreign investment by making significant changes to Income Tax Ordinance, 2001.
A commentary released by Pwc A F Ferguson Chartered Accountants on the tax ordinance 2019 explained the tax relief on the foreign investment through changes brought into the main statute.
The chartered accountancy firm said that foreign investors particularly foreign institutional investors invest in Pakistan’s capital market through Foreign Portfolio Investment (FPI) scheme, which allows such investors to invest in equity and debt securities (including Government Bonds, Term Finance Certificates, Pakistan Investment Bonds) without any physical presence.
The FPI scheme makes it mandatory for foreign investors to open Special Convertible Rupee Account (SCRA).
The requirement for non-residents to open SCRA is provided in Chapter 20 of the Foreign Exchange Manual issued by the State Bank of Pakistan (SBP).
The funds available in SCRA can be transferred outside Pakistan or credited to a foreign currency account of non-resident investor maintained in Pakistan at any time without prior approval of SBP.
Such non-resident corporate investors not having a Permanent Establishment in Pakistan are hereinafter referred to as NRI.
The tax incidence applicable on NRI on return from their investment in equity instruments, either as dividend or capital gains, is largely aligned and same (being 15 percent).
However, tax incidence applicable on return from investment in debt securities by NRI is not aligned. Interest income from debt investment is subject to final tax upon tax withholding at 10 percent whereas capital gains from disposal of debt instruments are taxable at corporate rate of tax which is presently 29 percent.
The Second Amendment Ordinance has aligned and rationalized the tax incidence through following amendments, apart from relieving NRI from certain compliances:
(i) Banking company / financial institution maintaining SCRA of NRI is now required to deduct tax from capital gains arising on disposal of debt instruments and Government securities (including Treasury Bills and Pakistan Investment Bonds) @ 10 percent.
Such tax deduction constitutes final tax on such capital gains. It appears that tax withholding is required to be made at the time when proceeds from disposal are accounted for in the SCRA and also that no adjustment for any capital loss may be made by the Banking company / financial institution while deducting tax @ 10 percent from capital gains earned by NRI on disposal of debt securities.
(ii) The requirements to obtain tax registration [under Section 181 of the Income Tax Ordinance, 2001 (‘ITO 2001’)] and also to file statement of final taxation [under Section 115(4)] will no longer apply, in case capital gains or profit on debt is earned from investments made through SCRA (maintained with a banking company or financial institution) in debt instruments & Government securities (including treasury bills and Pakistan investment bonds).
Despite not appearing on Active Taxpayers List (ATL), they will not be subjected to higher tax withholding under the Tenth Schedule on interest income and capital gains relating to such securities.
(iii) Advance tax under section 147(5B) will also be not payable in respect of capital gains arising on investment made through SCRA (maintained with a banking company or financial institution) in debt instruments and Government securities (including treasury bills and Pakistan Investment Bonds).
(iv) Tax withholding applicable on banking transactions by those not appearing on ATL (under section 236P) will not apply to SCRA. This is a blanket exemption for companies maintaining SCRA regardless of whether investment is made in equity or debt securities.
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Foreign investment witnesses massive growth to $2bn in five months
KARACHI: The inflows of foreign investment registered unprecedented growth to $2 billion during first five months (July – November) of 2019/2020 owing to significant investment in debt securities.
According to data of foreign investment in Pakistan by State Bank of Pakistan (SBP) on Tuesday, the total investment increased to $2 billion during first five months of current fiscal year as compared with $146.7 million in the same period of the last fiscal year.
The total foreign private investment registered 493 percent growth to $869.7 million during the period under review as compared with $146.7 million in the same period of the last fiscal year.
The major component under this head i.e. foreign direct investment grew by 78.1 percent to $850 million during July – November 2019/2020 as compared with $477.3 million in the same period of the last fiscal year.
The portfolio investment in the equity market registered 106 percent growth to $19.5 million during first five months of current fiscal year as compared with outflow of $330.6 million in the corresponding months of the last fiscal year.
The debt securities witnessed substantial investment of $1.136 billion during first five months of current fiscal year as compared with nominal amount in the corresponding period of the last fiscal year.
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Foreign investment increases to $1.1 billion owing to debt securities attraction
KARACHI: Pakistan’s total inflow of foreign investment has increased to $1.1 billion during first four months (July – October) 2019/2020 as compared with outflow of $77.5 million in the corresponding months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.
The inflows can be attributed to attractive avenue in the debt securities for foreign participants.
The total portfolio investment has been recorded at $436.7 million during first four months of the current fiscal year as compared to a negligible amount in the same period of the last fiscal year.
The total inflow of foreign private investment was at $665.7 million during first four months of the current fiscal year as compared with $77.6 million outflow in the corresponding months of the last fiscal year.
The foreign direct investment also grew by 238.7 percent to $650 million during period under review as compared with $192 million in the same period of the last fiscal year.
The inflow of portfolio investment in capital market was recorded at $15.6 million as compared with outflow of $269.5 million.