Profit repatriation hits $2.31b

Pakistan's improving foreign exchange position has translated into higher outward remittances by multinational companies, with foreign investors repatriating $2.31 billion in profits and dividends during fiscal year 2025-26 as payment bottlenecks eased.

Data released by the State Bank of Pakistan (SBP) on Monday showed total profit and dividend repatriation on foreign investment increased to $2.305 billion during July-June FY26, compared with $2.219 billion in the previous fiscal year. The total comprised $2.202 billion in payments on foreign direct investment (FDI) and $103.7 million on foreign portfolio investment (FPI).

In June 2026 alone, foreign investors repatriated $151.4 million, including $140.6 million in FDI earnings and $10.8 million in FPI-related payments.

The increase comes as Pakistan's external sector has shown signs of stabilisation, with improved foreign exchange reserves and better dollar liquidity allowing companies to clear pending profit and dividend remittances. During the period of acute foreign exchange shortages, many multinational firms had reported delays in repatriating their earnings because of restrictions on dollar outflows.

Manufacturing sector leads

According to the SBP's Broad Structure data, manufacturing remained the largest source of profit and dividend repatriation, with foreign investors remitting $564.3 million during FY26, compared with $614.6 million a year earlier. Financial and insurance activities followed at $537.4 million, while electricity, gas, steam and air-conditioning supply accounted for $496.5 million.

The detailed sector-wise data showed financial and insurance activities outflows rose to $537.4 million from $384.9 million, reflecting stronger earnings by foreign-owned banks and financial institutions. The electricity, gas, steam and air-conditioning supply sector recorded a substantial increase to $496.5 million, compared with $401.7 million in FY25.

Among other major sectors, wholesale and retail trade accounted for $211.6 million, information and communication for $166.9 million, and transportation and storage for $162.1 million. Repatriation from mining and quarrying stood at $124.6 million, while other service activities and administrative and support services recorded $13.9 million and $12.8 million respectively.

Beyond the leading sectors, foreign investors also repatriated $9.3 million from professional, scientific and technical activities, $3.6 million from accommodation and food service activities, and $2.0 million from construction. Agriculture, forestry and fishing, water supply, sewerage, waste management and remediation activities, and human health and social work activities each accounted for $0.1 million. Real estate, education, arts, entertainment and recreation recorded no profit or dividend repatriation during FY26.

UK, China account for largest outflows

Country-wise data showed the United Kingdom remained the largest destination for profit and dividend repatriation during FY26, receiving $621.2 million, followed by China with $486.5 million. The United States and the Netherlands received $191.4 million and $190.6 million respectively, while UAE-based investors repatriated $150.3 million.

Among other major recipients, Switzerland accounted for $102.2 million, Hong Kong $87.3 million, Kuwait $80.2 million, Japan $53.0 million, Norway $47.9 million, South Korea $44.8 million, Germany $39.4 million, and Singapore $38.5 million. Repatriation also amounted to $24.8 million each to Bahrain and Türkiye, $16.5 million each to Malaysia and Malta, $14.9 million to Denmark, and $9.6 million to Saudi Arabia.

The country-wise distribution broadly reflects the origin of Pakistan's major foreign investors, particularly in the banking, power, telecommunications, consumer goods and manufacturing sectors.

Fresh investment remains crucial

The increase in profit repatriation underscores the improvement in Pakistan's external payments position compared with the severe foreign exchange constraints witnessed over the past two years, when several multinational companies faced delays in remitting dividends and profits.

While the latest figures point to greater confidence among foreign investors in their ability to transfer legitimate earnings, the trend also highlights the need for stronger inflows of fresh foreign direct investment. Sustained FDI will be essential to offset rising profit outflows, expand productive capacity, strengthen exports and support the country's external account over the longer term.