Profit, dividend: Foreign investors repatriate $1.622bn in FY21

KARACHI: Foreign investors repatriated $1.622 billion on account of profit and dividend during the last fiscal year (FY21).

With improved economic activities, the repatriation of profit and dividend by foreign investors rose by 20 percent in July-June FY21. The higher outflow of profit and dividend also reflects that foreign investors are getting better margins of their investments in Pakistan.

According to the State Bank of Pakistan (SBP), foreign investors repatriated some $ 1.622 billion during the last fiscal year as compared to $1.346billion during FY20, depicting an increase of $ 276 million.

The detailed analysis revealed that major outflow of profit and dividend was recorded from the Foreign Direct Investment (FDI) and cumulatively some 92 percent of repatriated amount was sent as returns on FDI. During the period under review, Repatriation on account of FDI posted an increase of 24 percent increase, while repatriation from Foreign Portfolio Investment (FPI) recorded a slight decline of 7 percent.

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Repatriation of profit and dividend on account of return on FDI was $ 1.49billion during the July-June FY21 versus $ 1.2billion outflow in the corresponding period of FY20.The repatriation of profit and dividend on account of FDI is lower than overall FDI amounted to $1.84 that arrived Pakistan during last fiscal year.

Similarly, foreign investors repatriated $ 132 million on account of returns on portfolio investment in FY21down from $143 million of FY20.

The highest outflow of profit and dividends amounting to $337 million was from the financial sector followed by $ 231 million from food sector during the last fiscal year. An amount of $234 million was repatriated from communication, $ 136 million from transport and $ 134 million from Chemical. Month-on-month basis, foreign investors repatriated $ 126 million including $108 million of FDI returns and $ 17.7 million of return on portfolio investment in June 2021.

Pakistan has allowed 100 percent transfer of profit and dividend to foreign investors to attract foreign investment in the country. Therefore, foreign investors are taking full advantage of the government policy by sending their earnings abroad.

Copyright Business Recorder, 2021