Pakistan paid $2.305 billion in profits and dividends to foreign investors during fiscal year 2025-26, exceeding net foreign direct investment (FDI) inflows of $1.64 billion by approximately $665 million, according to information presented to the National Assembly. The figures were shared in a written response by the minister in charge of the Special Investment Facilitation Council (SIFC) Division to a question raised by Dr Mahreen Razzaq Bhutto. The data highlights the volume of investment income transferred abroad during the fiscal year compared with the net amount of direct investment entering the country.
According to the government’s reply, profit and dividend repatriation linked to direct investment reached $2.202 billion, while another $103.7 million was remitted in connection with portfolio investments. Together, the payments amounted to $2.305 billion, around 41% higher than the reported net FDI inflow of $1.64 billion. The figures cover different categories of foreign investment income and investment flows, and the government cautioned that they should not be treated as directly equivalent measures of foreign investment performance.
Manufacturing accounted for the largest share of profit and dividend repatriation, with payments totalling $564.3 million during FY2025-26. Financial and insurance activities followed with $537.4 million, while electricity, gas, steam and air-conditioning supply accounted for $496.5 million. These three sectors represented substantial portions of the reported outflows, reflecting the distribution of profit and dividend payments across major areas of economic activity.
Other sectors also recorded significant remittances. Wholesale and retail trade accounted for $211.6 million, followed by information and communication at $166.9 million, transportation and storage at $162.1 million, and mining and quarrying at $124.6 million. Together, the seven listed sectors accounted for more than $2.26 billion in remittances. The government clarified that the sector-wise figures include profit and dividend payments associated with both direct and portfolio investments, meaning they do not represent a breakdown of direct-investment outflows alone.
The government also explained why annual net FDI inflows should not be compared directly with the amount of profit repatriated during the same period. Net FDI measures inward direct investment after relevant direct-investment outflows, whereas profits transferred abroad in a particular fiscal year can arise from investments made over several years. Consequently, the amount remitted in one year may reflect the performance of an accumulated stock of foreign investment rather than only investments made during that year.
The reply further stated that improved foreign-exchange liquidity had enabled the clearance of previously delayed payments. This indicates that some of the repatriation during the fiscal year may have included payments that could not be transferred earlier. However, the information provided did not quantify how much of the $2.305 billion represented previously delayed payments or how much related to profits generated during FY2025-26.
To support its position that Pakistan continued to attract foreign investment, the government cited gross FDI inflows of $4.268 billion in FY2024-25 and $3.603 billion during July-April FY2025-26. These figures measure gross inflows rather than net FDI and cover different reporting periods. They therefore provide separate indicators of investment entering the country and should not be directly compared without accounting for those differences.
The government identified several policy measures intended to attract investment, broaden its sectoral distribution and encourage reinvestment. These include the Pakistan Investment Policy 2023, the SIFC’s investment facilitation role, investor support through the Board of Investment and the development of Special Economic Zones. The stated objective of these measures is to attract diversified, export-oriented investment and support greater reinvestment within Pakistan’s economy.
The parliamentary response did not, however, establish whether the SIFC had conducted a separate assessment of the impact of FY2025-26 profit repatriation on Pakistan’s foreign-exchange reserves or current account. The government said confirmation and any quantified assessment should be obtained from the State Bank of Pakistan (SBP) and the Finance Division. As a result, the figures establish the scale of reported profit and dividend transfers relative to net FDI inflows, but do not independently quantify their effect on the country’s external financial position.
The data provides a broader picture of Pakistan’s foreign investment flows, distinguishing between money entering the country through direct investment and income transferred abroad by existing foreign investors. While profit repatriation can reflect returns earned on earlier investments, its relationship with new investment inflows, foreign-exchange availability and reinvestment remains important when assessing the overall contribution of foreign capital to the economy.
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