Profit repatriation by multinationals 'on hold'.

KARACHI -- Multinational companies operating in Pakistan haven't been able to repatriate their dividends in recent quarters because of the curbs on dollar outflows.

Speaking to Dawn on Monday, Overseas Investors Chamber of Commerce and Industry (OICCI) Secretary General M. Abdul Aleem said the repatriation of profits in the form of dividends to the overseas headquarters of foreign companies has been on hold since the beginning of 2022-23.

'All multinationals irrespective of their size and sector are at the receiving end of this problem. Going by an earlier survey of OICCI members, the problem didn't exist before April 2022,' he said.

The widespread dollar shortage has led banks to refuse opening the letters of credit for even food and energy imports. Foreign exchange reserves of the country are at a multi-year low, forcing the government to stop large dollar outflows, including those by overseas investors.

As for the quantum of pending dividends, Mr Aleem said OICCI members don't regularly share with their representative body the exact number of outstanding payments.

The CEO of an investment bank, which serves large foreign clients, told Dawn on the condition of anonymity that the pending dollar dividends amount to more than $1 billion. These outstanding payments are in banking, food, telecom, chemical, power, tobacco, auto and energy exploration sectors.

Pakistan has a liberal foreign investment policy that allows 100 per cent profit repatriation. Multinational companies repatriated $1.6bn to their overseas headquarters in calendar year 2021. The repatriated amount dropped to $889 million in the first 11 months of 2022, according to data compiled by Optimus Capital Management. The SBP has yet to release the repatriation number for December.

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