Before investing, most foreign companies ask one question: can we get our money out? In Pakistan the legal answer is yes. In practice, how smoothly it works depends on whether the investment was registered correctly at the start and on the bank handling it. This guide explains the rules and the paperwork.
It is an orientation based on official sources, not legal or tax advice. Foreign exchange rules change; confirm current requirements with your bank and advisers.
The legal basis
The Foreign Private Investment (Promotion and Protection) Act 1976 allows foreign investors in any sector to repatriate profits, dividends and other funds, subject to the procedures in the State Bank of Pakistan’s (SBP) Foreign Exchange Manual (BOI, FAQs). Royalties and other fees earned in Pakistan can also be converted and remitted, subject to the same rules.
Everything runs through a designated bank
A Pakistani company with foreign shareholders chooses one bank as its designated Authorised Dealer. That bank registers the shares issued to non-residents and later handles dividend and disinvestment remittances. Since the SBP’s May 2026 changes, banks also report non-resident shareholdings monthly through a Non-Resident Shareholding Registration System (SBP, FE Circular 2 of 2026, Annex A). Choosing a bank with experience of foreign investment saves time later.
Paying dividends to foreign shareholders
Banks may remit dividends to non-resident shareholders without the SBP’s prior approval. Before doing so, the bank checks that:
- the shares are held by the non-resident under SBP permission and registered at a foreign address;
- the shares were not acquired on an undertaking not to claim dividends;
- the remittance is net of Pakistan tax, supported by an auditor’s certificate in the SBP’s prescribed form from a well-known audit firm.
Withholding tax on dividends is set by the Income Tax Ordinance 2001 and may be reduced under a double taxation treaty with the investor’s country, so tax advice belongs in the plan from the start.
Selling out: disinvestment proceeds
When a foreign investor sells shares, the designated bank can remit the proceeds after reviewing standard documents: the broker’s memo for listed shares or a break-up value certificate for unlisted shares, the share purchase agreement, the latest audited accounts and a buyer’s undertaking on related parties. If the price exceeds market or break-up value, the bank also needs the buyer’s justification and a valuation report, and an independent review applies where remittances exceed USD 50 million within six months (SBP, FE Circular 5 of 2020).
What causes delays
- Investment that was not registered through a designated bank when it came in.
- Missing auditor certificates or tax documentation.
- Periods of foreign exchange pressure, when remittances have at times taken longer to process.
Checking these points is part of good due diligence before an acquisition.
How PIVRA can help
PIVRA’s investment due diligence (from USD 4,500) reviews the regulatory and operating environment behind an investment, including foreign exchange and repatriation questions, and expert consultations (from USD 500) connect you with Pakistani specialists. We work alongside your bank, lawyers and tax advisers. Request a quote.