Profit and dividend repatriation on FDI during 10MFY24 has exceeded the FY23 annual tally by three times already. However, this by no means is a sign that repatriation of profits and dividends is at an all-time high. FY23 was a dismal year when the economic woes were at their height and the forex situation was in shambles. And the government had imposed restrictions on the outflow of foreign exchange due to the shortage at home. The authorities put restrictions on the outward remittance of profits.
On foreign investment while trying to control the outflow of dollars from the country, which resulted in abysmal repatriation of profit and dividends by the multinational companies - as low as only $267 million during the entire FY23.
Nonetheless, the repatriation by the foreign companies has seen significant improvement in FY24 with total repatriation on net FDI standing at$812 million for 10MFY24. This has been a relief for the foreign investors and MNCs that have had their payments stuck for over a year as SBP has eased the restrictions on the repatriation of dividends and profits.
During the 10 months of FY24, the sector that led the repatriation uptrend was the manufacturing and trade sector followed by the financial business and power sector. In terms of countries, investors from the UAE repatriated the highest profits as per SBP data followed by the UK, China, and the US.
While the trend has reversed as compared to the previous year, challenges remain. Recently, the IATA has urged Pakistan and Bangladesh to release funds blocked in airline revenues earned in these markets. Pakistan has $411 million stuck primarily due to long processing delays.
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