Foreign Investments


Foreign Establishments in Pakistan

The regulatory regime in respect of foreign investments in Pakistan is covered both through a regular statute as well as policy/administrative decisions of the Board of Investment (the “BOI”). The policies of the BOI are quite fluid and there is a great deal of space which one can achieve in working with it. The BOI has no statutory authority and in the commercial field the strict enforcement of its policies are not evidenced. The major element in the past that induced prompt compliance with BOI policies and the policies of its predecessor, Investment Bureau of Pakistan (“IPB”), was that remittance out of Pakistan could not be made except through the State Bank of Pakistan without IPB/BOI approval. The foreign exchange regime has been liberalized in Pakistan and is governed mainly through Foreign Exchange Regulation Act.

Options For Foreigners For Opening Up A Limited Liability Company In Pakistan

A foreign national or a foreign company can form a limited liability company incorporated in Pakistan in the following three ways subject to security clearance: -Branch Office -Liaison Office -Incorporate a New Company -Acquisition of shares in an already incorporated company.

Security Clearance Requirement For Foreigners Registering/Acquiring A Company In Pakistan.

A shareholder or director of the Company who is a foreign national will have to submit additional documents with Securities and Exchange Commission of Pakistan, at the time of filing documents for registration of a company, for the purpose of seeking security clearance from the Ministry of Interior.

Repatriation Of Foreign Investment

The Company can repatriate the profits of the foreign investment by obtaining a prior ‘Entitlement Certificate’ issued by State Bank of Pakistan for investment in Pakistan on repatriate basis. The State Bank, on the request of the company, authorizes an authorized dealer for the purpose of remittance of dividend to non-resident shareholders as per procedure outlined in Foreign Exchange Manual. The authorized dealers are Schedule Banks and all inward and outward remittance should be done through the said dealer.