Sweden flags barriers to investment in Pakistan

Swedish companies in Pakistan face high taxes and energy costs, hindering foreign investment despite growth potential.

KARACHI:

More than 40 Swedish companies operating in Pakistan are grappling with significant challenges, including high tax rates, steep energy costs, and restrictions on transferring foreign currencies, according to Ambassador of Sweden Alexandra Berg von Linde. These issues, she said, are major obstacles to fostering foreign investment and improving trade ties.

Speaking at a meeting with the Karachi Chamber of Commerce and Industry (KCCI), the ambassador highlighted that these Swedish companies, many of which are globally recognised brands, have been present in Pakistan for decades. "These companies have supported Pakistan's growth and are well-acquainted with the complexities of the local business climate," she stated.

While these businesses recognise Pakistan's investment potential, addressing these challenges is critical for creating a more conducive environment for foreign investors, she added.

The ambassador also underlined Sweden's keen interest in deepening collaboration with Pakistan, particularly in areas like sustainability, digitalisation, and green transitions. "These areas offer a win-win opportunity for both countries. For Pakistan to stay competitive and relevant in the EU market, a green transition is essential," she said.

Sweden's role in fostering trade relations through the Swedish Business Council in Pakistan has been pivotal, she said. "The council actively promotes trade between the two countries by expanding and strengthening business links. It is an entry point for Swedish companies that are interested in the Pakistani market," she explained.

Commenting on the Generalised Scheme of Preferences Plus (GSP Plus), the Swedish ambassador addressed Senior Vice President KCCI Ziaul Arfeen's remarks on the subject. "GSP Plus is an open and generous system that promotes economic growth and sustainable development. At the same time, we all know that there are conditions attached to the GSP system in terms of implementation of international conventions, whether it is about human or labour rights, environmental regulations, or governance principles. I know that Pakistan is working closely and continuously with the European Union to stay aligned with the GSP regulations," she said.

This year, Sweden and Pakistan celebrate 75 years of diplomatic relations, a milestone underscoring their long-standing partnership. Reflecting on this relationship, the ambassador remarked, "During these 75 years, the relationships have evolved, based on mutual respect and a shared commitment to economic growth and sustainable development."