Ayesha Saba

The Institute of Cost and Management Accountants of Pakistan (ICMA) has recommended a series of policy reforms aimed at improving the investment climate, restoring investor confidence and retaining multinational companies operating in Pakistan.

The proposals are part of ICMA’s “Revive, Reform, Reinvest” framework included in its latest research report on multinational exits and restructuring trends.

According to the report available with Wealth Pakistan, although several multinational firms have scaled down or adjusted their operations, Pakistan continues to offer potential for long-term investment in sectors such as automotive, energy, technology, digital services and Special Economic Zones. ICMA emphasises that targeted policy measures are essential to ensure that these opportunities translate into sustained foreign participation.

The institute calls for greater regulatory predictability to support long-term business planning. The report notes that sudden tariff changes, retroactive taxes and administrative delays create uncertainty for companies considering new investments. Clearer, consistent and transparent policies, according to ICMA, would enable multinationals to make strategic decisions with more confidence.

ICMA also highlights the need to address high operational costs, including energy tariffs and logistics inefficiencies, which affect production competitiveness. Improvements in energy supply reliability, infrastructure upgrades and streamlined customs procedures are identified as critical areas for reform.

Foreign exchange stability is another priority identified by the institute. The report notes that past restrictions on profit repatriation discouraged reinvestment and created challenges for multinational financial planning. While repatriation flows improved in FY2024 and FY25, ICMA stresses that maintaining a predictable foreign exchange management framework is essential for investor confidence.

The report further recommends strengthening administrative efficiency by simplifying processes for obtaining permits, approvals and tax clearances. ICMA notes that reducing bureaucratic hurdles can significantly improve the operating environment for foreign companies.

In addition, the institute highlights the importance of skill development and workforce capacity. The report states that gaps in digital, technical and managerial expertise increase recruitment and training costs for multinational firms. Enhancing local skills, especially in technology-driven sectors, would support business expansion and improve productivity.

ICMA’s proposed framework emphasises coordinated efforts by institutions such as the Special Investment Facilitation Council (SIFC), the Board of Investment (BOI) and relevant ministries to create an investor-friendly ecosystem. The report states that sustained collaboration among government stakeholders is necessary to provide clarity, reduce compliance burdens and attract high-value investments.

The institute concludes that Pakistan’s strong market fundamentals can be reinforced through supportive policies that encourage multinationals to expand, reinvest and establish long-term commitments in the economy.

Credit: INP-WealthPk