Profit repatriation by foreign investors from Pakistan jumps 27%

Foreign investors sharply increased the repatriation of profits and dividends from Pakistan in the first half of the current fiscal year, reflecting stronger earnings by some multinational firms and improved ease of transferring foreign exchange, according to data released by the central bank.

The State Bank of Pakistan said that foreign companies repatriated $1.559 billion in profits and dividends during July-December of fiscal year 2026, up 27% from $1.226 billion in the same period a year earlier. The increase represents an additional $333 million sent abroad as returns on foreign direct and portfolio investments.

Analysts said the higher outflows point to improved profitability in key sectors and fewer constraints on profit transfers compared with last year, when foreign exchange shortages had slowed repatriation.

“The rise in profit and dividend repatriation suggests that earnings of foreign-owned firms have improved and that the central bank has allowed relatively smoother foreign exchange outflows,” said an analyst at a Karachi-based brokerage firm. “This is a positive signal for investor confidence, even though it adds pressure on the external account.”

According to the central bank, returns on foreign direct investment accounted for about 96% of total outflows, while portfolio investment made up the remaining 4%. Multinational companies repatriated about $1.5 billion in FDI-related profits during the period, up 29% from $1.16 billion a year earlier.

In contrast, returns on foreign portfolio investment declined slightly to $60 million from $64 million in the same period of the previous fiscal year, despite improved performance of the domestic equity market.

On a monthly basis, foreign investors repatriated about $89 million in December, including $81 million in FDI profits and $8 million from portfolio investment.

Sector-wise, the financial sector recorded the highest profit and dividend outflows in the first half of FY26, with repatriations totaling $369 million, more than double the $164 million recorded a year earlier.

The power sector ranked second, with $359 million sent abroad during the period, compared with $178 million in the corresponding months of the previous fiscal year.

Analysts cautioned that while higher repatriation reflects healthier corporate earnings, sustained increases could weigh on Pakistan’s balance of payments if not offset by stronger capital inflows or export growth.