KARACHI – April 20, 2025: The outflow of profits and dividends by foreign investors from Pakistan surged significantly in the first nine months of the current fiscal year, highlighting a renewed pace of capital repatriation amid improving macroeconomic conditions. According to the State Bank of Pakistan (SBP), foreign entities repatriated $1.708 billion from July to March of FY2025, which represents a 107 percent increase compared to the $826 million recorded during the same period of FY2024. This substantial $882.7 million rise points to stronger earnings among foreign companies operating in Pakistan and the easing of previous restrictions on capital movement.
In March 2025 alone, the repatriation of profits and dividends amounted to $157.9 million. This figure shows a 140 percent year-on-year increase, although it declined 32.3 percent month-on-month, possibly reflecting the timing of corporate earnings cycles or seasonal adjustments. Despite the monthly dip, the overall growth in repatriations illustrates the broader upward trend in financial flows moving out of the country, largely due to improved investor confidence and more accessible foreign exchange mechanisms.
The ability of foreign companies to repatriate larger volumes of profits is generally seen as a sign of a maturing and open economy. It indicates that international investors are not only generating substantial returns in Pakistan but also feel increasingly secure about transferring those returns abroad without delays or administrative barriers. This confidence is likely driven by a combination of stronger economic fundamentals, a stable rupee, enhanced foreign exchange reserves, and steady progress under international financial support programs such as the IMF loan facility.
In recent years, foreign investors in Pakistan have often voiced concerns about their inability to freely repatriate earnings, particularly due to foreign currency shortages and regulatory hurdles. The significant increase in repatriated funds this fiscal year may also be partially attributed to the clearing of a backlog that built up over prior years, when stricter capital controls were in place. The data now suggests that those backlogs are being addressed as Pakistan works to reassure international investors of its commitment to a liberalized and business-friendly environment.
Although the SBP has not yet provided a breakdown of which sectors saw the highest repatriations, historical patterns suggest the funds likely stem from industries such as energy, telecommunications, financial services, and fast-moving consumer goods. The growing presence of digital businesses, including fintech and e-commerce ventures backed by foreign capital, may also have contributed to the increased flow of outbound profits. These sectors continue to attract foreign investment, driven by Pakistan’s large consumer base and the rapid digitization of its economy.
While rising repatriation levels can lead to some outflow of foreign currency, they also reflect a healthier investment climate where businesses can confidently plan long-term. For policymakers, the challenge lies in maintaining this investor trust while safeguarding external balances. With the SBP continuing its efforts to strengthen the financial ecosystem and foster a more transparent capital framework, the growth in profit repatriation underlines both the progress and complexity of managing a globally connected economy.