Foreign investors repatriated a total of $752 million in profits and dividends from Pakistan during the first quarter (July–September) of the fiscal year 2025–26, according to the latest data released by State Bank of Pakistan. The figure reflects an 86 percent year-on-year increase compared to $405 million repatriated during the same period last year, signaling a sharp rise in corporate profitability among multinational firms operating in the country.
The substantial increase in outflows comes at a time when foreign direct investment flows remain under close scrutiny amid Pakistan’s ongoing economic reforms and efforts to strengthen its external account. Analysts note that this repatriation surge reflects both improved earnings performance of foreign companies and a more stable foreign exchange environment, allowing investors to transfer their profits abroad more smoothly.
Repatriation linked to foreign direct investment accounted for the bulk of the outflows, climbing by 92 percent to reach $735 million in Q1 FY2025–26, compared to $382 million in the corresponding period a year earlier. This spike underscores stronger profitability in core sectors where foreign firms are active, including energy, telecommunications, financial services, and consumer goods.
Meanwhile, repatriation from the stock market segment recorded a decline, falling 26 percent to $17.1 million from $23 million in the same quarter last year. This decrease reflects more cautious trading activity and a moderate shift in foreign portfolio investor sentiment toward Pakistani equities.
The upward trend in profit repatriation aligns with recent findings by Overseas Investors Chamber of Commerce and Industry (OICCI), which represents over 200 of the country’s leading foreign investors. According to the OICCI’s annual business performance report, member companies posted a profit before tax (PBT) of Rs1.2 trillion during FY2024, maintaining an impressive 34 percent average growth in rupee terms between 2020 and 2024.
OICCI members also reported a combined turnover exceeding Rs11 trillion, with their contribution to government levies reaching Rs2.7 trillion. This equates to almost Rs10 billion daily in tax payments, representing nearly 30 percent of Federal Board of Revenue’s total tax collections. Additionally, foreign investors have continued to expand their long-term presence in the country, with total assets of OICCI member companies amounting to Rs34 trillion and capital expenditure surpassing Rs470 billion.
Despite persistent macroeconomic challenges, including inflationary pressures, tight monetary policy, and a slower recovery in investment activity, the data reflects sustained business momentum and continued confidence of foreign investors in Pakistan’s economy. Economic analysts point out that such profit repatriation flows, while reducing foreign exchange reserves in the short term, also indicate a healthy business environment where companies are able to operate profitably and repatriate returns through formal channels.
The surge in profit outflows also underscores the importance of maintaining currency stability and predictable regulatory frameworks to encourage reinvestment of profits and attract new foreign capital. Policymakers are expected to closely monitor these trends to balance the interests of foreign investors and the country’s external account stability.
Follow the PakBanker Whatsapp Channel for updated across Pakistan’s banking ecosystem.