KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI), has said that recent amendments by the Securities and Exchange Commission of Pakistan (SECP) in the Companies Ordinance are going to enhance foreign investors’ confidence in the country, however, there is room for further improvements to attract substantial foreign direct investment (FDI) amid Covid-19.
The chamber, along with other leading business association, has in the past challenged some of the over-regulatory conditions introduced in the Companies Act 2017 without the adequate engagement of the key stakeholders. The amendments to the Companies Act 2017, according to OICCI members, will further improve the regulatory environment in line with regional practices.
OICCI Secretary-General M Abdul Aleem while commenting on the amendments mentioned that foreign investors have always supported the regulatory environment, which is predictable, consistent and transparent. The recent revisions made on April 30, 2020, in the Companies Act 2017 had been under discussion between the SECP and other stakeholders, including OICCI during a series of “Consultative session and feedback” meetings held in 2018 and 2019 and acceptance of several recommendations should be a matter of satisfaction for business entities.
He further added that a few recommendations are still not part of the proposed reformations and “we shall request SECP to also review these so as to attract sizeable foreign direct investment (FDI) in these challenging times.
Pakistan’s FDI for the past several years has been less than 1% of the gross domestic product (GDP) against the regional norm of 3% and above.
A concern recommended by the OICCI, and other stakeholders, to eliminate the reference to ‘lineal ascendants and descendants’ from the ambit of related parties has not been addressed and OICCI has again requested the exchange commission to review this important matter.
“Negative perception of Pakistan among potential foreign investors has been a key impediment in attracting sizeable FDI in the country,” Aleem concluded.
Published in The Express Tribune, May 19th, 2020.