Executive Summary

Despite a relatively open foreign investment regime, Pakistan remains a challenging environment for foreign investors. An improving but unpredictable security situation, difficult business climate, lengthy dispute resolution processes, poor intellectual property rights (IPR) enforcement, and inconsistent taxation policies have contributed to lower Foreign Direct Investment (FDI), as compared to regional competitors. Pakistan ranked 147 out of 190 countries in the World Bank’s Doing Business 2018 rankings, sliding down three places from the previous year.

The Pakistan Muslim League-Nawaz (PML-N) government was elected in May 2013 on pledges to improve Pakistan’s economy, enhance trade and investment, and resolve the chronic energy shortages. In September 2013, the Government of Pakistan and the International Monetary Fund (IMF) entered a three-year USD 6.8 billion Extended Fund Facility (EFF) arrangement that included a series of reform benchmarks. The government successfully completed the EFF program in September 2016, and with the help of the IMF, implemented some macroeconomic reforms. Pakistan formally signed an economic co-operation agreement with China named the China Pakistan Economic Corridor (CPEC) in April 2015. CPEC is mainly focused on infrastructure and energy production. Given that several large CPEC energy projects went online this year, Pakistan’s government has been able to develop sufficient power generation capacity in the country, though deficiencies in the transmission and distribution network remain. Impeded by domestic political pressures, progress was slow on other key structural reforms, including broadening the tax base and privatization.

The United States has consistently been one of the largest sources of FDI in Pakistan and one of its most significant trading partners. Two-way trade in goods between the United States and Pakistan exceeded USD 6.3 billion in 2017, the largest ever, and included a 33 percent increase in U.S. exports to Pakistan. Agriculture and machinery were the largest growth areas for U.S. exports. The Karachi-based American Business Council, an affiliate of the U.S. Chamber of Commerce, has a membership of 68 U.S. companies, most of which are Fortune 500 companies, operating in Pakistan across a range of industries. The Lahore-based American Business Forum – which has 26 founding members and 16 associate members – also provides assistance to U.S. investors. American companies have profitable investments across a range of sectors, notably, but not limited to, fast-moving consumer goods and financial services. Other sectors attracting U.S. interest have been franchising, information and communications technology (ICT), thermal and renewable energy, and healthcare services.

In 2003, the United States and Pakistan signed a Trade and Investment Framework Agreement (TIFA) to serve as a key forum for bilateral trade and investment discussion. The TIFA seeks to address impediments to greater trade and investment flows and increase economic linkages between our respective business interests. TIFA meetings are held annually, the most recent in October 2016 in Washington, led by United States Trade Representative (USTR), Michael Froman. The last TIFA intersessional, a working level meeting to review the decisions taken in TIFA, was held in June 2017 in Washington.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 117 of 180 https://www.transparency.org/news/feature/
corruption_perceptions_index_2017#table
World Bank’s Doing Business Report “Ease of Doing Business” 2017 147 of 190 http://www.doingbusiness.org/reports/
global-reports/doing-business-2018
Global Innovation Index 2017 113 of 127 https://www.globalinnovation
index.org/analysis-indicator
U.S. FDI in partner country (M USD, stock positions) 2016 USD 409 https://www.bea.gov/international/
factsheet/factsheet.cfm
World Bank GNI per capita 2016 USD 1500 https://data.worldbank.org/
indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

In the past decade, Pakistan was unable to attract sufficient foreign investments to support desired growth objectives and remains a low priority country for foreign investors. After coming into power in 2013, the PML-N government recognized Pakistan’s need for foreign investment and offered incentives to attract new capital inflows. They introduced an updated Investment Policy, liberalizing investment policies in most sectors, and created incentives through the Strategic Trade Policy Framework (STPF) and Export Enhancement Packages (EEP). STPF and EEP incentives are largely industry-specific and include tax breaks, tax refunds, tariff reductions, the provision of dedicated infrastructure, and investor facilitation services. Pakistan also designated special economic zones (SEZs), none of which are fully operational but have attracted some actual investment and are available to anyone. SEZs offer a separate basket of incentives to potential investors.

Net inflows of FDI peaked at USD 5.4 billion in fiscal year (FY) 2008. In FY 2017, net FDI was USD 2.7 billion, approximately 42 percent higher than FY 2016. According to the State Bank of Pakistan (SBP), the largest share of FDI – USD 525 million – was in the food sector (largely due to the sale of Engro foods to a Dutch company), followed by USD 466 million in the construction sector, and USD 403 million in coal-based power plants. Most analysts believe that the improved security environment, large energy projects under CPEC, and improvements in macroeconomic stability have played a key role in the improvement of FDI in FY 2017 (Note: The fiscal year in Pakistan runs from July 1 to June 30. The macroeconomic environment has deteriorated over the past year with a rapidly expanding current account deficit and declining foreign reserves. End Note). China remained the single largest FDI contributor in Pakistan, contributing more than 45 percent of Pakistan’s total FDI in FY 2017.

Notwithstanding the substantial increase in Chinese FDI, non-Chinese sources are limited. Compared to the region, low FDI is attributed to Pakistan offering competitive returns in only a few sectors. For example, multinational companies in the consumer goods sector have witnessed steady profits, while pharmaceuticals have been obstructed by opaque and restrictive government regulations. Power companies have also experienced an uptick in business since CPEC, but mostly by conventional energy providers; renewable energy providers have encountered obstacles in the form of inconsistent and discouraging policies from regulators. ICT has risen steadily, albeit from a relatively low base. Growth has come from companies engaged in outsourcing services and software development.

Pakistan has one of the lowest tax-to-gross domestic product (GDP) ratios in the world – approximately 12.5 percent in 2017. Pakistan relies heavily on multinational corporations for a significant portion of the tax collections. Foreign investors in Pakistan regularly report that both federal and provincial tax regulations are difficult to navigate. The World Bank’s Doing Business 2018 report notes that companies pay 47 different taxes, compared to an average of 27 in other South Asian countries. On average, it takes businesses over 312 hours per year to calculate the payments required under the federal and provincial tax regulations. In addition, companies frequently lament the lack of transparency in the assessment of taxes. Since 2013, the government has requested advance tax payments from companies, complicating businesses’ operations as the government intentionally delays tax refunds.

There are no laws or practices that discriminate against foreign investors, though enforcement remains a concern. The Foreign Private Investment Promotion and Protection Act (1976) and the Furtherance and Protection of Economic Reforms Act (1992) provide legal protection of foreign investors and investment in Pakistan. All sectors and activities are open for foreign investment unless specifically prohibited or restricted for reasons of national security and public safety. Specified restricted industries include arms and ammunitions; high explosives; radioactive substances; securities, currency, and mint; and consumable alcohol.

The specialized investment promotion agency of Pakistan is the Board of Investment (BOI). BOI is responsible for the promotion of investment, facilitating local and foreign investors for speedy materialization of their projects, and to enhance Pakistan’s international competitiveness. They assist companies and investors who intend to invest in Pakistan and facilitate the implementation and operation of their projects. Though BOI is the key point of contact for prospective investors, both domestic and foreign, they remain one of the most ineffective federal government agencies Pakistan. Provincial BOIs have varying levels of effectiveness.

Limits on Foreign Control and Right to Private Ownership and Establishment

The 2013 Investment Policy eliminated minimum initial capital investment requirements across sectors so that no minimum investment requirement or upper limit on the share of foreign equity is allowed, with the exception of the airline, banking, agriculture, and media sectors. Foreign investors in the services sector may retain 100 percent equity for the life of the investment, as well as the ability to repatriate 100 percent of profits. In the education, health, and infrastructure sectors, 100 percent foreign ownership is allowed, while in the agricultural sector, the threshold is 60 percent. There are no restrictions on payments of royalties and technical fees for the manufacturing sector, but there are restrictions on other sectors, including a USD 100,000 limit on initial franchise investments and a cap on subsequent royalty payments of 5 percent of net sales for 5 years. Royalties and technical payments are subject to a 15 percent income tax. The tourism, housing, construction, and ICT sectors have been granted industry status, eligible for lower tax and utility rates compared to commercial sector enterprises, including banks and insurance companies. Small-scale mining valued at less than Pakistan Rupee (PKR) 300 million (roughly USD 2.6 million) is restricted to Pakistani investors.

With the exception of arms, ammunition, high explosives, radioactive substances, securities, currency, and consumable alcohol, foreign investors are allowed in all sectors. There are no restrictions or mechanisms that exclude U.S. investors.

Since signing the World Trade Organization (WTO) Financial Services Agreement in December 1997, Pakistan financial services commitments have improved. Foreign banks can establish locally incorporated subsidiaries and branches, provided they have USD 5 billion or belong to one of the regional organizations or associations to which Pakistan is a member (e.g., Economic Cooperation Organization (ECO) or the South Asian Association for Regional Cooperation (SAARC)). Absent these requirements, foreign banks are limited to a 49 percent maximum equity stake in locally incorporated subsidiaries. Foreign and local banks must submit an annual branch expansion plan to the State Bank of Pakistan (SBP) for approval. The SBP approves branch openings based on the bank’s net worth, adequacy of capital structure, future earnings prospects, credit discipline, and the needs of the local population. All banks are required to open 20 percent of their new branches in small cities, towns, and villages.

The Foreign Private Investment Promotion and Protection Act stipulates that foreign investments will not be subject to higher income taxes than similar investments made by Pakistani citizens. While Pakistan’s legal code and economic policy does not discriminate against foreign investments, enforcement of contracts remains problematic due to a weak and inefficient judiciary.

Other Investment Policy Reviews

Pakistan has not undergone any third-party investment policy reviews in last three years. International Monetary Fund assessed the overall macro economy under Article-IV consultation; however, that was not specific to investment policy.

https://www.imf.org/~/media/Files/Publications/CR/2017/cr17212.ashx

Business Facilitation

Pakistan works with the World Bank to improve its overall ease of doing business standing. The government has simplified pre-registration and registration facilities and automated land records to simplify property registrations. To improve cross border trade, it has also improved electronic submissions and processing of trade documents. Even so, Pakistan ranked 142 out of 190 countries in the 2017 World Bank Doing Business report’s Starting a Business category. Pakistan is ranked 20 out of 190 for protecting minority investors. Starting a business in Pakistan normally involves 12 procedures and takes at least 17.5 days.

The Securities and Exchange Commission of Pakistan (SECP) manages company registrations. Both foreign and domestic companies begin the registration by providing a company name and paying the requisite registration fees to the SECP. Companies then supply documentation on the proposed business, including information on corporate offices, location of company headquarters, and a copy of the company charter. Companies must apply for national tax numbers with the Federal Board of Revenue (FBR) to facilitate payment of income and sales taxes. Industrial or commercial establishments with five or more employees must register with Pakistan’s Federal Employees Old Age Benefits Institution (EOBI) for social security purposes. Depending on the location, registration with provincial governments may be required.

The SECP website offers the Virtual One Stop Shop (OSS) so companies can register with SECP, FBR, and EOBI simultaneously. OSS is also available for foreign investors.

The government’s investment policy provides both domestic and foreign investors the same incentives, concessions, and facilities for industrial development. Though some incentives are included in the federal budget, the government relies on Statutory Regulatory Orders (SROs) for industry specific taxes or incentives. For example, an SRO issued in October 2017 imposed additional regulatory import duties on over 730 items.

Outward Investment

Pakistan does not promote or incentivize outward investment. Although the government does not explicitly prohibit Pakistanis from investing abroad, the process of approvals is so cumbersome it normally take years, discouraging potential investors.

2. Bilateral Investment Agreements and Taxation Treaties

Though U.S.-Pakistan Bilateral Investment Treaty (BIT) negotiations began in 2004 and closed the text in 2012, the agreement has not been signed due to reservations from Pakistani stakeholders. According to the BOI, Pakistan has signed BITs with 50 countries with only 27 entered into force.

Pakistan does not have a Free Trade Agreement (FTA) with United States. However, both countries have a Trade and Investment Framework Agreement (TIFA) in place. Pakistan has trade agreements with China, Malaysia, Sri Lanka, Iran, Mauritius, and Indonesia. It is also a signatory of the South Asian Free Trade Agreement (SAFTA) and the Afghanistan-Pakistan Transit Trade Agreement (APTTA). Pakistan is negotiating FTAs with Turkey and Thailand and re-negotiating its existing FTA with China.

A U.S.-Pakistan bilateral tax treaty was signed in 1959. Pakistan has double taxation agreements with 63 other countries and a multilateral tax treaty between the SAARC countries (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) came into force in 2011. The treaty provides additional provisions for the administration of taxes.

In 2016, Pakistan signed the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention will help Pakistan exchange banking details with the other 80 signatory countries to locate untaxed money in foreign banks. Pakistan is a member of the Base Erosion and Profit Shifting (BEPS) framework and will automatically exchange country-by-country reporting as required by the BEPS package.

3. Legal Regime

Transparency of the Regulatory System

SECP is the regulatory body for foreign companies in Pakistan. However, SECP is not the sole regulator. Company financial transactions are regulated by SBP, labor by the Social Welfare or Employees Old Age Benefits Institute, and specialized functions are overseen by bodies such as the National Electric Power Regulatory Authority or Alternate Energy Development Board. Each body is overseen by autonomous management but all are required to go through the Ministry of Law and Justice before submitting their policies and laws to parliament or, in some cases, the executive branch. Parliament or the Prime Minister is the final authority for any operational or policy related legal changes.

SECP is technically empowered to notify accounting standards to companies in Pakistan. Pakistan has adopted most, though not all, International Financial Reporting Standards. Though most of Pakistan’s legal, regulatory, and accounting systems are transparent and consistent with international norms, execution and implementation is inefficient and opaque.

Most draft legislation is made available for public comment but there is no centralized body to collect public responses. The relevant authority gathers public comments, if deemed necessary, otherwise legislation is directly submitted to the legislative branch. For business and investment laws and regulations, the Ministry of Commerce collects feedback from local chambers and associations – such as the American Business Council and Overseas Investors Chamber of Commerce and Industry (OICCI). Rather than publishing regulations online for public review, the Ministry relies on stakeholder discussion forums for comment.

Judicial activism addressing enforcement process and regulatory mechanisms is increasing in Pakistan. In January 2018, the Sindh High Court overturned regulatory duties imposed by FBR on the basis that the Finance Minister was not empowered to impose these duties under Section 18(3) of the 2017 Finance Act. Similarly, in February 2018, Pakistan’s Supreme Court took independent action against drug price increases announced by Drug Regulatory Authority of Pakistan (DRAP), declaring the Court will determine annual increase in the price of medicines.

International Regulatory Considerations

Pakistan has bilateral trade agreements with China, Indonesia, Iran, Malaysia, Mauritius, and Sri Lanka, although most are limited to a few hundred tariff lines and do not cover all trade. It is negotiating additional trade agreements with Turkey and Thailand, and is a member of the South Asia Free Trade Area, SAARC, the Central Asia Regional Economic Cooperation (CAREC), and Economic Cooperation Organization (ECO).

Pakistan has been a World Trade Organization (WTO) member since January 1, 1995, and provides most favored nation (MFN) treatment to all member states, except India and Israel. Since 2012, the government has maintained a “negative” list of products that cannot be imported from India. The list contains approximately 1,200 products. Pakistan does not recognize the State of Israel and thus does not trade with Israel.

In October 2015, Pakistan ratified the WTO’s Trade Facilitation Agreement (TFA). Pakistan is one of 23 WTO countries negotiating the Trade in Services Agreement. Pakistan notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Legal System and Judicial Independence

Most international norms and standards incorporated in Pakistan’s regulatory system are influenced by British laws. Laws governing domestic or personal matters are strongly influenced by Islamic Sharia Law. Of the two courts – superior (high) courts and the subordinate (lower) courts – the superior judiciary is composed of the Supreme Court, the Federal Sharia Court, and five High Courts (Lahore High Court, Sindh High Court, Balochistan High Court, Islamabad High Court, and Peshawar High Court), and decisions have national standing. The Supreme Court is Pakistan’s highest court and has jurisdiction over the provincial courts, referrals from the federal government, and cases involving disputes among provinces or between a province and the federal government. Neither the Supreme Court nor a High Court has jurisdiction in matters relating to Pakistan’s Federally Administered Tribal Areas, except in limited circumstances. A 2015 constitutional amendment allows military courts to try civilians for terrorism, sectarian violence, and other charges; this authority was renewed in January 2017 for an additional two years. The government may also use special civilian terrorism courts to try a wide range of cases, not necessarily limited to terrorism, including any crimes involving violence and acts or speech deemed by the government to foment religious hatred, including blasphemy. The lower courts are composed of civil and criminal district courts, as well as various specialized courts, including courts devoted to banking, intellectual property, customs and excise, smuggling, drug trafficking, terrorism, tax law, environmental law, consumer protection, insurance, and cases of corruption. Pakistan’s judiciary is influenced by the government and other stakeholders. The lower judiciary is influenced by the executive branch and seen as lacking competence and fairness.

Pakistan has a written contractual/commercial law with the Contract Act of 1872 as the main source for regulating Pakistani contracts. English decisions, where relevant, are also cited in courts.

Laws and Regulations on Foreign Direct Investment

Pakistan’s investment and corporate laws permit wholly-owned subsidiaries with 100 percent foreign equity in all sectors of the economy. A majority of foreign companies operating in Pakistan are “private limited companies,” which are incorporated with a minimum of two shareholders and two directors registered with the SECP.

While there are no regulatory requirements on the residency status of company directors, the chief executive must reside in Pakistan to conduct day-to-day operations. If they are not a Pakistani national, they are required to obtain a multiple entry work visa. Companies operating in Pakistan are statutorily required to retain full-time audit services and legal representation. Companies must also register any changes to the name, address, directors, shareholders, CEO, auditors/lawyers, etc. to the SECP within 15 days of the change.

To address long process delays, in 2013, the SECP introduced the issuance of a provisional Certificate of Incorporation prior to the final issuance of a No Objection Certificate (NOC). The Certificate includes a provision noting that company shares will be transferred to another shareholder if the foreign shareholder(s) and/or director(s) fails to obtain a NOC.

Pakistan’s judicial system allows specialized tribunals as a means of alternative dispute resolution. Special tribunals are able to address taxation, banking, labor, and IPR enforcement disputes. However, due to an active but weak and inefficient judiciary, most foreign investors include contract provisions that provide for international arbitration to avoid protracted disputes.

Competition and Anti-Trust Laws

Established in 2007, the Competition Commission of Pakistan (CCP) ensures private and public sector organizations are not involved in any anti-competitive or monopolistic practices. Complaints regarding anti-competition practices can be lodged with CCP, which conducts the investigation and is legally empowered to award penalties; complaints are reviewable by the CCP appellate tribunal in Islamabad and the Supreme Court of Pakistan. The CCP appellate tribunal is required to issue decisions on any anti-competition practice within six months from the date in which it becomes aware of the practice. There were no anti-competition investigations involving foreign investors in 2017.

Expropriation and Compensation

Two Acts, the Protection of Economic Reforms Act (1992) and the Foreign Private Investment Promotion and Protection Act (1976), protect foreign investment in Pakistan from expropriation, while the 2013 Investment Policy reinforced the government’s commitment to protect foreign investor interests. Pakistan does not have a strong history of expropriation.

Dispute Settlement

Pakistan is a member of the International Center for the Settlement of Investment Disputes (ICSID). Pakistan ratified the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention) in 2005.

Even so, foreign investors lament the lack of clear, transparent, and timely investment dispute mechanisms. Protracted arbitration cases are a major concern. Pakistan’s Arbitration Act of 1940 provides guidance for arbitration in commercial disputes, but cases typically take years to resolve. To mitigate such risks, most foreign investors include contract provisions that provide for international arbitration.

Pakistan is not a signatory of any treaty or investment agreement in which binding international arbitration of investment disputes is required. With the exception of arbitration, there is no alternative dispute resolution (ADR) mechanism available as a means for settling disputes between two private parties.

In 2008, the Pakistani government instituted a Rental Power Plant (RPP) plan to help alleviate the chronic power shortages throughout the country. The Walters Power International Limited (WPIL) was a participant in three RPP plants and brought the power generation equipment into Pakistan to service these plants. Subsequently, in 2010, the Supreme Court of Pakistan nullified all RPP contracts due to widespread corruption in cash advances made to RPP operators. The Walters Power International Limited settled with the Pakistan’s National Accountability Bureau (NAB) and the Central Power Generation Company Ltd by returning advance payments plus interest. In mid-2012, NAB formally acknowledged that settlement with the WPIL had been made, which under Pakistani law released the WPIL from any further liability, criminal or civil, and should have permitted re-export of equipment.

However, the Government of Pakistan has (a) refused to allow for the plant to be exported so that some salvage value could be obtained, and (b) prevented the plant to operate despite critical need for power in the country. This plant was internationally advertised in a competitive bidding process and went through seven levels of regulatory approvals. Despite repeated efforts by Walters Power, NAB has declined to instruct the appropriate parties to issue a Notice of Clearance to Pakistan Customs to allow the re-export of the equipment. Walters Power alleges that the unreasonable delay in permitting re-export of equipment following settlement constitutes expropriation. The case is still pending with NAB.

Bankruptcy Regulations

Pakistan is ranked 82 of 190 for ease of resolving insolvency rankings in the World Bank’s Ease of Doing Business Report. On average, Pakistan requires 2.6 years to resolve insolvency issues and has a recovery rate of 44.5 percent. In contrast, India is ranked 103 of 190 and on average requires 4.3 years.

Pakistan does not have a single, comprehensive bankruptcy law. Foreclosures are governed under the Companies Ordinance of 1984 and administered by the SECP, while the Banking Companies Ordinance of 1962 governs liquidations of banks and financial institutions. Court-appointed liquidators auction bankrupt companies’ property and organize the actual bankruptcy process, which can take years to complete.

The Companies Ordinance of 1984 regulates mergers and acquisitions. Mergers are allowed between international companies, as well as between international and local companies. In 2012, the government enacted legislation for friendly and hostile takeovers. The law requires companies to disclose any concentration of share ownership over 25 percent. There are no laws or regulations authorizing private firms to adopt articles of incorporation discriminating against foreign investment.

Pakistan has no dedicated credit monitoring authority. However, SBP has authority to monitor and investigate the quality of the credit commercial banks extend.

4. Industrial Policies

For investments in the manufacturing sector, no minimum equity investment or national ownership requirements exist. The government allows 25 percent first-year depreciation for all fixed assets in this sector, and 25 percent of plant and machinery costs to be counted as the first-year depreciation in infrastructure and social sectors.

Investment Incentives

To reduce or eliminate custom duties on the imports of equipment and machinery and have duty-free imports of certain raw materials, Pakistan introduced temporary tariff concessions for certain manufacturing sub-sectors in 2016. However, the government does not offer research and development incentives. Nonetheless, certain technology-focused industries, including information technology and solar energy, benefit from a wide range of fiscal incentives.

Foreign Trade Zones/Free Ports/Trade Facilitation

Providing unique fiscal and institutional incentives exclusively for export-oriented industries, the government established the first Export Processing Zone (EPZ) in Karachi in 1989. Subsequently, EPZs were established in Risalpur, Gujranwala, Sialkot, Saindak, Gwadar, RekoDek, and Duddar; today, only Karachi, Risalpur, Sialkot, and Saindak remain operational. EPZs offer investors tax and duty exemptions on equipment, machinery, and materials (including components, spare parts, and packing material); indefinite loss carry-forward; and access to the EPZ Authority (EPZA) “Single Window,” which facilitates import and export authorizations. The 2012 Special Economic Zones (SEZ) Act allows both domestically-focused and export-oriented enterprises to establish companies and public-private partnerships within SEZs. Despite offering substantial financial, investor service, and infrastructure benefits to reduce the cost of doing business, Pakistan’s SEZs have struggled to attract investment due lack of basic infrastructure.

As announced in April 2015, Pakistan intends to establish nine SEZs under China Pakistan Economic Corridor (CPEC). Despite significant media attention, CPEC SEZs are still in nascent stages. These SEZs provide investors with a tax holiday of 20 years and are open to all investors.

Apart from SEZ-related incentives, the government offers special incentives for goods under the Export-Oriented Units (EOU) – a stand-alone industrial entity exporting 100 percent of its production. EOU incentives include duty and tax exemptions for imported machinery and raw materials, as well as the duty-free import of vehicles. EOUs are allowed to operate anywhere in the country. Pakistan provides the same investment opportunities to foreign investors and local investors.

Performance and Data Localization Requirements

Obtaining a visa for Pakistan remains challenging for U.S. business officials, as application processing times can be long and most visas issued are single-entry with a short duration validity – though longer-validity visas are sometimes obtainable upon request. The Pakistani government has re-activated a “business visa on arrival” program that allows citizens of 68 countries, including the United States, to receive a visa on arrival, as long as they comply with the program requirements, which include a sponsor in Pakistan who must supply an invitation letter to the appropriate port of entry prior to arrival. (For more information, visit the Ministry of Interior web site.) Once in country, No Objection Certificates (NOCs) are required for U.S. business officials to visit locations outside of Islamabad, Karachi, or Lahore, making it difficult to inspect factories, supply chains, or goods outside of these three cities. Technical and managerial personnel working in sectors that are open to foreign investments are typically not required to obtain special work permits. Even so, Pakistani officials often lament the perception that the U.S. travel advisory for Pakistan discourages U.S. business people from traveling to Pakistan, thereby hurting Pakistani industries.

Foreign investors are not required to use domestic content in goods or technology or hire Pakistani nationals, either as laborers or as representatives on the company’s board of directors. Likewise, there are no specific performance requirements for foreign entities operating in the country, and the same investment incentives are available to both local and foreign investors. Similarly, there are no special performance requirements on the basis of origin of the investment.

Foreign investors are allowed to sign technical agreements with local investors without disclosing proprietary information. According to the country’s 2013 Investment Policy, manufacturers introducing new technologies that are unavailable in Pakistan receive the same incentives available to companies operating in Pakistan’s SEZs.

Post has not received complaints regarding encryption issues from IT companies operating in Pakistan. Officially, accreditation from the Electronic Certification Accreditation Council (under the Ministry of Information Technology) is required for entities using encryption and cryptography services, though it is not consistently enforced. Despite the company’s April 2016 announcement that it would employ end-to-end encryption, WhatsApp is widely used. Yet Research in Motion (RIM), the makers of BlackBerry mobile devices, faced scrutiny from the government regarding its use of encryption. The Pakistan Telecommunication Authority (PTA) initially demanded unfettered access to BlackBerry customer information, but the issue was resolved when RIM agreed to assist law enforcement agencies in the investigation of criminal activities. PTA and SBP prohibit telecom and financial companies from transferring customer data overseas. Other data, including emails, can be legally transmitted and stored outside the country.

5. Protection of Property Rights

Real Property

Though Pakistan’s legal system supports the enforcement of property rights and both local and foreign owner interests, it offers incomplete protection for the acquisition and disposition of property rights. With the exception of the agricultural sector, where foreign ownership is limited to 60 percent, no specific regulations regarding land lease or acquisition by foreign or non-resident investors exists. Corporate farming by foreign-controlled companies is permitted if the subsidiaries are incorporated in Pakistan. There are no limits on the size of corporate farmland holdings, and foreign companies can lease farmland for up to 50 years, with renewal options.

The 1979 Industrial Property Order safeguards industrial property in Pakistan against government use of eminent domain with insufficient compensation for both foreign and domestic investors. The 1976 Foreign Private Investment Promotion and Protection Act guarantees the remittance of profits earned through the sale or appreciation in value of property.

Though protection for legal purchasers of land is provided, even if unoccupied, clarity of land titles remains a challenge due to enforcement issues. Improvements to land titling have been made by the Punjab, Sindh, and Khyber Pakhtunkhwa provincial governments, which have dedicated significant resources to digitizing land records.

Intellectual Property Rights

The PML-N government, which came into power in May 2013, has identified intellectual property protection as a key area for its second generation economic reforms. Pakistan’s Intellectual Property Organization (IPO) controls trademarks, patents, and copyrights – areas that were previously handled by offices in three separate ministries. Although IPO represents an important step in the government’s recognition of IPR, the organization has not yet delivered meaningful results in the enforcement of the widespread violations throughout Pakistan.

The government established IP tribunals in 2015 in Lahore, covering Punjab province; in Karachi, covering Sindh and Baluchistan; and in Islamabad, covering Islamabad and Khyber Pakhtunkhwa. While the Lahore and Islamabad IP tribunals became operational in 2015, the Karachi tribunal did not come online until April 2017. While all the tribunals are functioning, it is too early to assess their influence on Pakistan’s IPR environment. The tribunals have yet to make a landmark IPR decision.

Pakistan has sought to encourage investment in the seed industry through enhanced regulatory structure. Over the past three years officials have revised the 1976 Seed Act, cautiously resumed the biotechnology approval process, and received parliamentary approval of the Plant Breeders’ Rights Act (approved December 2016), which, once implementing rules are written, is expected to provide Pakistan’s first-ever intellectual property protection for seeds. While current and potential investors have expressed concerns over enforcement capacity and would like the approval process for new technologies to accelerate, the Government of Pakistan is taking steps to solidify federal (rather than provincial) oversight of the sector and respond to industry input. Access to modern seed technology is vital to the development of Pakistan’s agricultural sector.

Pakistan is a party to the Berne Convention for the Protection of Literary and Artistic Works, and is a member of the World Intellectual Property Organization (WIPO). In July 2004, Pakistan acceded to the Paris Convention for the Protection of Industrial Property. Pakistan has not yet ratified the WIPO Copyright Treaty or the WIPO Performances and Phonograms Treaty.

In 2016, Pakistan was upgraded from Priority Watch List to Watch List with an Out-of-Cycle Review on the U.S. Trade Representative’s Special 301 Report. The Out-of-Cycle Review and 2017 regular review confirmed Pakistan on the Watch List. The 2018 Special 301 report acknowledged certain achievements by the government but highlighted the lack of enforcement on violations, particularly with respect to copyrights, pharmaceutical data, and media piracy.

Pakistan does not track and report on seizure of counterfeit goods.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

6. Financial Sector

Capital Markets and Portfolio Investment

Pakistan’s three stock exchanges (Lahore, Islamabad, and Karachi) merged to form the Pakistan Stock Exchange (PSE) in January 2016. As a member of the Federation of Euro-Asian Stock Exchanges (FEAS) and the South Asian Federation of Exchanges (SAFE), PSE is also an affiliated member of the World Federation of Exchanges and the International Organization of Securities Commissions. In 2016, the PSE was Asia’s best performing stock market. In 2016, the government imposed a capital gains tax of 10 percent on stocks held for less than 6 months, and 8 percent on stocks held for more than 6 months but less than a year and no capital gains tax for holdings that exceed 12 months. However, in 2017, the government modified the capital gains tax and imposed 15 percent on stocks held for less than 12 months, 12.5 percent on stocks held for more than 12 but less than 24 months, and 7.5 percent on stocks held for more than 24 months. The 2012 Capital Gains Tax Ordinance appointed the National Clearing Company of Pakistan Limited to compute, determine, collect, and deposit the capital gains tax. Per the Foreign Exchange Regulations, foreign investors can invest in shares and securities listed on the PSE and can repatriate profits, dividends, or disinvestment proceeds. The investor must open a Special Convertible Rupee Account with any bank in Pakistan to make portfolio investments.

The free flow of financial resources for domestic and foreign investors is supported by financial sector policies, with the SBP and SECP providing regulatory oversight of financial and capital markets. Interest rates depend on the reverse repo rate (also called the policy rate). The SBP steadily lowered the policy rate from a high of 10 percent at the fourth quarter 2014 to 6 percent in November 2017. The five largest banks, one of which is state owned, control 52.6 percent of all banking sector assets. In FY 2017, total assets of the banking industry were USD 159.6 billion. As of December 2017, net non-performing bank loans totaled approximately USD 818 million – 1.5 percent of net total loans.

Commercial banks lend a majority of their deposits to the government rather than the private sector. Though lending has decreased, much of the new lending is designated towards large-scale government-directed energy and infrastructure projects. Banks ensure that total debt does not exceed 25 percent of the bank’s equity exposure to any domestic or foreign entity. Foreign-controlled manufacturing, semi-manufacturing (i.e., goods that require additional processing before marketing), and non-manufacturing concerns are allowed to borrow from the domestic banking system without regulated limits.

The private sector predominantly accesses credit from commercial banks, but credit can be difficult to secure for all but the most credit-worthy companies. Domestic corporate bonds, commercial paper, and derivative markets are virtually nonexistent in Pakistan. According to the 2013 Investment Policy, foreign investors’ domestic credit lines are subject to the rules and regulations of the SECP and SBP, and observance of the required debt-to-equity ratio. The policy also extends to loans.

Recent capital market reforms include the introduction of minimum capital requirements for brokers, linking of exposure limits to net capital, strengthening of brokers’ margin requirements, the introduction of system audit regulations (mandating audit of 60 percent of brokers), the introduction of over the-counter (OTC) markets to facilitate registration of new companies with less paid-up capital, and the establishment of a National Clearing and Settlement system. In 2015, the SECP implemented a number of other regulations, including on clearing houses, margin trading, proprietary trading, and abolition of the group account facility. Capital market legal, regulatory, and accounting systems are consistent with international norms.

Pakistan has adopted and adheres to international accounting and reporting standards, with comprehensive disclosure requirements for companies and financial sector entities.

Money and Banking System

SBP requires that foreign banks hold at minimum USD 300 million in capital reserves at their Pakistan flagship location, and maintain at least an 8 percent capital adequacy ratio. In addition, foreign banks are required to maintain the following minimum capital requirements, which vary based on the number of branches they are operating:

  • 1 to 5 branches: USD 28 million in assigned capital;
  • 6 to 50 branches: USD 56 million in assigned capital;
  • Over 50 branches: USD 94 million in assigned capital.

Foreign Exchange and Remittances

Foreign Exchange Policies

The SBP maintains strict controls over the exchange rate and monitors foreign exchange transactions in the open market. Banks are required to report and justify outflows of foreign currency. Travelers leaving or entering Pakistan are allowed to physically carry a maximum of USD 10,000 in cash. While cross border payments of interest, profits, dividends, and royalties are allowed without submitting prior notification, banks are required to report loan information so SBP can verify remittances against repayment schedules. Exchange companies are permitted to buy and sell foreign currency for individuals, banks, and other exchange companies, and can sell foreign currency to incorporated companies to facilitate the remittance of royalty, franchise, and technical fees. Exchange companies are playing an increasingly important role in facilitating remittances from Pakistanis working overseas.

Remittance Policies

The 2001 Income Tax Ordinance of Pakistan exempts taxes on any amount of foreign currency remitted from outside Pakistan through normal banking channels. Remittance of full capital, profits, and dividends over USD 5 million are permitted while dividends are tax-exempt. No limits exist for dividends, remittance of profits, debt service, capital, capital gains, returns on intellectual property, or payment for imported equipment in Pakistani law. However, large transactions that have the potential to influence Pakistan’s foreign exchange reserves require approval from the government’s Economic Coordination Committee. Similarly, banks are required to account for outflows of foreign currency. Investor remittances must be registered with the SBP within 30 days of execution and can be made only against a valid contract or agreement.

Sovereign Wealth Funds

Pakistan does not have its own sovereign wealth fund (SWF) and no specific exemptions for foreign SWFs exist in Pakistan’s tax law. Foreign SWFs are taxed like any other non-resident person unless specific concessions have been granted under an applicable tax treaty to which Pakistan is a signatory.

7. State-Owned Enterprises

The second round of the Pakistani government’s extensive 15-year privatization campaign came to an abrupt halt after 2006 when the Supreme Court reversed a proposed deal for the privatization of Pakistan Steel Mills, setting a precedent for future offerings. As a result, large and inefficient state-owned enterprises (SOEs) retain monopolistic powers in a few key sectors, requiring the government to provide annual subsidies to cover SOE losses. Three of the country’s largest SOEs include Pakistan Railways (PR), Pakistan International Airlines (PIA), and Pakistan Steel Mills (PSM). According to the IMF, the total debt of SOEs now amounts to 4 percent of GDP.

When the PML-N assumed office in June 2013, SOE privatization figured prominently in the party’s economic reform agenda and under the country’s IMF EFF program (approved in October 2013), under which 31 state-owned companies were identified for privatization. Despite these commitments, the government has failed to deliver, in large part due to resistance from labor unions and opposition political parties. Although the IMF program officially ended in 2016, USAID extended the contract of its financial specialist to continue providing technical support to Pakistan’s Privatization Commission. This technical support officially ended February 2018.

PR is the only provider of rail services in Pakistan and the largest public sector employer with approximately 90,000 employees. PR’s freight traffic has declined by over 75 percent since 1970 and of PR’s 458 locomotives, only about 250 are serviceable. PR has attempted to recapture the market share previously ceded to the trucking industry, and in 2016 the company purchased 55 new locomotives from GE for its freight operations; PR has received commitments for USD 8.2billion in CPEC loans and grants to modernize its mail rail lines. PR relies on monthly government subsidies of approximately USD 2.8 million to cover its ongoing obligations. In FY 2017, government payments to PR totaled approximately USD 336 million. Pakistan no longer intends to privatize PR, and the Privatization Commission has removed it from the list of SOEs identified for privatization.

Even though the government is still publicly committed to privatizing its national airline, the process has been stalled since early 2016 when three labor union members were killed during a violent protest in response to the government’s decision to convert PIA into a limited company, which would have allowed shares to be transferred to a non-government entity and paved the way for privatization. While a bill was eventually passed by the legislature, it requires that the Pakistan government retain 51 percent equity in the airline if it is privatized, reducing the attractiveness of the company to potential investors.

Established to avoid importing foreign steel, PSM has accumulated losses of approximately USD 3.77 billion per year. The company loses USD 5 million a week, and has not produced steel since June 2015, when the national gas company cut power supplies due to over USD 340 million in outstanding bills. Like PIA, the government attempted to privatize PSM under the IMF program but was stymied by domestic and political opposition. The government is reportedly considering leasing or selling a portion of PSM’s 19,000 acres, coupled with a basket of incentives that would provide for a 10-year tax holiday and duty-free import of any machinery and equipment upgrades to potential leases.

Privatization Program

Terms to purchase public shares of SOEs and financial institutions for both foreign and local investors are the same. Under the 2013 IMF EFF program, the government identified 31 SOEs for either partial or total privatization. In 2015, the government successfully offloaded stakes in several banks and publicly traded firms, and in 2016 sold its 40 percent stakes in PSE. However, due to significant political resistance, the government postponed plans to privatize its largest and most inefficient SOEs, namely PIA, PSM, and several power generation and distribution companies.

8. Responsible Business Conduct

There are no unified set of standards defining responsible business conduct in Pakistan. Though large companies, especially multi-national corporations, have an awareness of Responsible Business Conduct (RBC) standards, there is a lack of wider awareness. The Pakistani government has not established standards or strategic documents specifically defining RBC standards and goals. The Ministry of Human Rights published its most recent Action Plan for Human Rights in May 2017. Although it does not specifically address RBC or business and human rights, one of its six thematic areas of focus is implementation of international and UN treaties. Pakistan is signatory to nearly all International Labor Organization (ILO) conventions.

In late 2016 and early 2017, two separate deadly incidents – a series of explosions, and a fire – occurred at the Gadani shipbreaking yards in Balochistan. The incidents underscored the lack of safety and environmental standards in the industry. The Prime Minister’s office launched a probe into the 2016 explosion and concluded that negligence by ship owners and government officials caused the incident. The government suspended officials found guilty of negligence, and announced that families of the incident’s victims would receive compensation. The subsequent January 2017 fire prompted officials to halt the scrapping of oil and liquid petroleum gas tankers at the shipyard.

International organization, civil society, NGO, and labor union contacts note there is a lack of adequate implementation and enforcement of labor laws. Some NGOs, worker organizations, and business associations are working to promote RBC, but not on a wide scale.

Pakistan does not have domestic measures requiring supply chain due diligence for companies sourcing minerals originating from conflict-affected areas and does not participate in the Extractive Industries Transparency Initiative (EITI) or the Voluntary Principles on Security and Human Rights.

9. Corruption

Pakistan was ranked 117 out of 180 countries on Transparency International’s 2017 Corruption Perceptions Index. Following the institution of the 18th Amendment, which devolved certain powers from the federal to provincial governments, corruption at the provincial level has increased. According to Transparency International, corruption problems persist due to the lack of accountability and enforcement of penalties, followed by the lack of merit-based promotion, and relatively low salaries.

Bribes are criminal acts punishable by law and exist at all levels of government. Although high courts are widely viewed as more credible, lower courts are often considered corrupt, inefficient, and subject to pressure from prominent wealthy, religious, and political figures. Political involvement in judicial appointments increases the government’s influence over the court system.

The National Accountability Bureau (NAB), Pakistan’s anti-corruption organization, suffers from insufficient funding and staffing. Like NAB, the CCP’s mandate includes anti-corruption authorities, but its effectiveness is hindered by resource constraints.

UN Anticorruption Convention, OECD Convention on Combating Bribery

Pakistan is not a signatory to the OECD Convention on Combating Bribery, but is a signatory to the Asian Development Bank/OECD Anti-Corruption Initiative. Pakistan has also ratified the UN Convention against Corruption.

Resources to Report Corruption

Justice (R) Javed Iqbal
Chairman
National Accountability Bureau
Ataturk Avenue, G-5/2, Islamabad
+92-51-111-622-622
chairman@nab.gov.pk

Sohail Muzaffar
Chairman
Transparency International
5-C, 2nd Floor,Khayaban-e-Ittehad, Phase VII, D.H.A., Karachi
+92-21-35390408-9
ti.pakistan@gmail.com

10. Political and Security Environment

The presence of foreign and domestic terrorist groups within Pakistan poses a significant danger to U.S. interests and citizens. Terrorist attacks have targeted civilians, government, military officials, and foreign personnel and organizations. The Embassies of many countries, including the United States, United Kingdom, Canada, Australia, and New Zealand, have issued travel advisories against non-essential travel to Pakistan, and many multinational companies operating in Pakistan employ private security and risk management firms to mitigate the significant threats to their business operations. Violence by non-state militant groups remains an issue, although fatalities from terrorist attacks have been on the decline since their peak in 2009. Despite historic violence in Karachi, carried out by criminal gangs with alleged political affiliations, targeted killings have declined since Pakistan’s paramilitary Rangers began an intensive campaign of operations to counter violent crime.

In the past, BOI, in collaboration with Provincial Investment Promotion Agencies, has coordinated airport-to-airport security and secure lodging for foreign investors. To inquire about this service, investors can contact the BOI for additional information.

11. Labor Policies and Practices

Pakistan has a complex system of labor laws. Each province is in the process of developing its own labor law regime, and the provinces are at different stages of labor law development.

Due to the 18th Amendment, jurisdiction over labor matters is managed by the provinces. In Punjab, Sindh, Khyber Pakhtunkhwa, and Islamabad, the minimum wage is PKR 15,000 per month (USD 135). In Baluchistan, it is PKR 14,000 per month (USD 125). Legal protections for laborers are uneven across provinces, and implementation of labor laws is weak nationwide. Required labor inspections are infrequent, and labor courts are generally considered corrupt and strongly biased in favor of employers.

According to Pakistan’s most recent workforce survey (conducted 2014-2015), the civilian workforce consists of approximately 60 million workers. Women are extremely under-represented in the labor force. The survey estimated overall labor participation at approximately 45 percent, with male participation at 68 percent and females at 22 percent. The majority of the labor force works in the agricultural sector (43 percent), followed by the services (34 percent), and manufacturing (23 percent) sectors. Officially, the unemployment rate hovers at around 6 percent, but the actual figure is likely significantly higher with unemployment and underemployment, particularly for people between the ages of 15 and 24. In 2017, the UN Population Fund estimated that 65 percent of Pakistan’s population was below 24 years old. According to official survey estimates, unemployment for 15 to 19 year-olds was 11.7 percent, while that of 20-24 year olds was 9.2 percent.

Pakistan is a labor exporter, particularly to Gulf Cooperation Council (GCC) countries. According to Pakistan’s Bureau of Emigration and Overseas Employment’s 2016 Export of Manpower Analysis, the bureau had registered more than 9.6 million Pakistanis going abroad for employment, more than 96 percent of whom were going to work in GCC countries. Pakistanis working overseas sent nearly 20 billion dollars in remittances each year between 2015 and 2017.

Pakistani government sector contacts say their workforce is insufficiently skilled. Federal and provincial government initiatives such as the National Vocational and Technical Training Commission and the Punjab government’s Technical Education and Vocational Training Authority aim to increase the employability of the Pakistani workforce. However, the ILO’s 2016-2020 Pakistan Decent Work Country Programme notes that “Neither a comprehensive national policy nor coherent provincial policies for skills and entrepreneurship development are being applied.”

The ILO’s 2016-2020 Pakistan Decent Work Country Program notes that “a small fraction of vulnerable workers are covered by social security in one form or another, while access to comprehensive social protection systems is also limited.” The ILO’s 2014 Decent Work Country Profile states that in 2013, only 9.4 percent of the economically active population – excluding public sector employees – were contributing to formal social security systems such as old age, survivors’, and disability pensions.

Freedom of association is guaranteed under article 17 of Pakistan’s constitution. However, the ILO indicates that the Pakistani state and employers have used “disabling legislation and repressive tactics” to make union formation and collective bargaining “extremely difficult.” The Pakistan Institute of Labour Education and Research in its 2015 Status of Labour Rights in Pakistan noted that according to non-official data, there were 949 registered trade unions with a total membership of 1,865,141 – approximately 4 percent of the total estimated labor force. Provincial labor departments are responsible for managing trade union and industrial labor disputes. Each province has its own industrial relations legislation, and each has labor courts to adjudicate disputes. Recent strikes have been spearheaded by public sector workers, such as teachers and public health workers.

The ILO’s 2016-2020 Pakistan Decent Work Country Programme states that “exploitative labour practices in the form of child and bonded labour remain pervasive…” and notes “the absence of reliable and comprehensive data to accurately assess the situation of hazardous child labour, worst forms of child labour, or forced labour.” The report also identifies weak compliance with, and enforcement of, labor laws and regulations as contributing to poor working conditions – including unhealthy and unsafe workplaces –and the erosion of worker rights.

On January 25, 2017 the Sindh Provincial Assembly passed the Sindh Prohibition of Employment of Children Act, 2017. The Senate passed the Domestic Workers (Employment Rights) Act in March 2016 (http://www.senate.gov.pk/uploads/documents/1390294147_766.pdf), but the bill has not progressed in the National Assembly. An amendment to the federal Employment of Children Act, 1991, which would raise the minimum age of employment to sixteen, has been pending in the National Assembly since January 2016.

The Balochistan government, in collaboration with ILO, supported tripartite consultations regarding the Balochistan Prohibition of Employment of Children Bill. The draft legislation prohibits employment of children in 39 worst forms of labor or hazardous labor, including domestic labor. Negotiations were ongoing as of March 2018, and NGO and international organization contacts said they expected the Provincial Assembly to enact the law in 2018.

Pakistan is a GSP beneficiary, which requires its government to uphold labor standards.

12. OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) maintains an active portfolio of projects worth USD 900 million in Pakistan, including new investments in renewable energy and electricity distribution efficiency.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) (M USD ) 2017 USD 318,622 2016 USD 291,063 IMF – http://data.imf.org/?sk=85b51b5a-b74f-473a-be16-49f1786949b3
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in Partner Country (M USD , Stock Positions) 2017 USD 194 2016 USD 409 BEA (Bureau of Economic Analysis)
Direct Investment and
Multinational Enterprises

Statistics: Direct Investment and MNEs
Host Country’s FDI in the United States (M USD, Stock Positions) 2017 USD 149 2016 USD -131 BEA (Bureau of Economic Analysis)
Direct Investment and
Multinational Enterprises

Statistics: Direct Investment and MNEs
Total inbound stock of FDI as % Host GDP 2017 12.8% 2016 0.002% IMF – http://data.imf.org/?sk=85b51b5a-b74f-473a-be16-49f1786949b3

Table 3: Sources and Destination of FDI

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 3,435 100% Total Outward 704 100%
China 1,258 36.6% United States 149 21.2%
Netherlands 489 14.2% U.A.E. 115 16.3%
United Kingdom 248 7.2% Norway 108 15.3%
U.A.E 235 6.8% China 54 7.7%
United States 194 5.6% Germany 52 7.4%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries -328.5 100% All Countries 118.52 100% All Countries 223.16 100%
Saudi Arabia 104 31.7% Saudi Arabia 89.27 75.3% U.A.E 45.97 20.6%
U.A.E 49.36 15% Virgin British Islands 10.50 8.9% Turkey 32.78 14.7%
Turkey 32.78 9.9% United Kingdom 9.35 7.9% United States 25.17 11.3%
United States 25.48 7.8% U.A.E 3.40 2.9% Qatar 23.92 10.7%
Cayman Islands 24.94 7.6% Cayman Islands 2.92 2.5% Cayman Islands 22.02 9.9%

14. Contact for More Information

U.S. Embassy Islamabad, Econ Section
U.S. Embassy Islamabad, Islamabad 44000, Pakistan
IVG 787-5668
IslamabadECONAmericans@state.gov

2018 Investment Climate Statements: Pakistan
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