Pakistan tax association says foreign investment at risk as authorities deny security clearances

In this picture taken on January 11, 2022, a foreign currency dealer counts US dollar notes at a shop in Karachi, Pakistan. (AFP/File)
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Updated 24 January 2025
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Pakistan tax association says foreign investment at risk as authorities deny security clearances

  • Pakistan Tax Bar Association says foreign subscribers, directors getting ‘unilateral’ rejection letters with no reason given
  • Union says the actions go against the government’s stated aim of inviting foreign companies to invest in Pakistan

ISLAMABAD: The Pakistan Tax Bar Association (PTBA) has written a letter to the interior minister this week raising concern about the ‘unilateral’ rejection of security clearances for foreign investors, which the union said could jeopardize their business activities in the country.

The government of Prime Minister Shehbaz Sharif says it is committed to improving Pakistan’s investment climate as the South Asian country struggles to meet external financing needs. In 2023, Pakistan set up the Special Investment Facilitation Council to attract foreign funds and projects. In recent months, Saudi Arabia has promised to expedite a $5 billion investment plan for Pakistan, while the UAE and Kuwait have committed $10 billion each in promising sectors and Qatar has pledged $3 billion.

However, potential investors in Pakistan face many challenges such as taxation, persistently high inflation, red tape, weak rule-of-law, inconsistent regulation, corruption, political uncertainty, security concerns and a lack of transparency in public-sector decision-making.

“We are writing to you to raise a very serious issue in terms of rejection of security clearance for foreign investors who have incorporated a 100 percent foreign equity company in Pakistan,” the PTBA, a private body, said in the letter to Interior Minister Mohsin Naqvi on Wednesday. 

As per the Companies Regulations, 2024, every foreign subscriber and director is required to seek security clearance by filing required documents to the interior ministry through the Securities and Exchange Commission of Pakistan. After the incorporation, companies start their investments and set up their premises and factories to commence business operations in Pakistan. 

“Nowadays, companies have been receiving unilateral rejection letters from the SECP, informing them that the security clearance for their foreign subscribers and directors have been rejected,” the PTB said. “These letters neither specify the reasons for such rejection nor any opportunity of hearing to explain the defects/discrepancy if any.”

The union said these actions were sending a “very negative message” to foreign investors.

“Pakistan and one fine morning they are informed that they are not security cleared,” PTBA said. “This jeopardizes their entire business set up in Pakistan, which is against the government’s stated aim of inviting foreign investors to invest in Pakistan.”

The PTBA urged Naqvi to “immediately” address the issue, which was “adversely” affecting Pakistan’s ability to attract foreign investment.

The interior ministry has not yet commented on the PTBA’s letter.

Pakistan in 2023 nearly defaulted on the payment of foreign debts when the International Monetary Fund rescued it by agreeing to a $3 billion bailout to Pakistan. 

Last year, Islamabad secured a new $7 billion loan deal from the IMF. Since then, the country’s economy has started improving with weekly inflation coming down from 27 percent in 2023 to 1.8 percent earlier this month. Sharif has vowed to reduce dependence on foreign loans in the coming years and to seek more foreign investments.


Ex-Pakistan spy chief sentenced to 14 years for engaging in political activities, misusing authority

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Ex-Pakistan spy chief sentenced to 14 years for engaging in political activities, misusing authority

  • Hameed was arrested in August 2024 over accusations he was involved in land grabbing, snatching property from housing society owner
  • Pakistan military says Hameed provided all legal rights during court martial, can appeal against decision “at the relevant forum”

ISLAMABAD: Former Pakistan spymaster Lt. Gen. Faiz Hameed has been sentenced to 14 years of rigorous imprisonment by a military court after being convicted of engaging in political activities, violating the Official Secrets Act and misusing his authority and government resources, the Pakistan army said on Thursday.

Hameed, who served as the director-general of Pakistan’s powerful Inter-Services Intelligence (ISI) agency from June 2019 until October 2021, was arrested in August 2024 over accusations he was involved in land grabbing and snatching valuables and property from the owner of a housing society. The military said at the time multiple instances of violations of the Pakistan Army Act post-retirement had also been established against Hameed, court martial proceedings had been initiated and that he was in the army’s custody.

Investigations against senior officers of Pakistan’s powerful army are extremely rare in Pakistan, where the military has ruled for almost half of the country’s history and wields considerable influence even during periods of civilian rule. The development takes place days after Field Marshal Syed Asim Munir was appointed as the country’s first chief of defense forces. 

In its latest statement, the Pakistan military said court marital proceedings under Hameed began on Aug. 12, 2024, under the provisions of the Pakistan Army Act. It said the accused was tried under four charges related to engaging in political activities, violating the Official Secrets Act and misuse of authority and government resources, and causing “wrongful loss to persons.”

“After lengthy and laborious legal proceedings, accused has been found guilty on all charges and sentenced to 14 years rigorous imprisonment by the Court which has been promulgated on 11 December 2025,” the Inter-Services Public Relations (ISPR) said. 

The statement further said the military trial process complied with all legal provisions, adding that Hameed was provided all legal rights, including the right to select a defense team of his choosing. It said the former spymaster had the right of appeal at “the relevant forum.” 

“Involvement of convict in fomenting vested political agitation and instability in cahoots with political elements and in certain other matters is separately being dealt with,” the ISPR said. 

The military had said last year that Hameed was being investigated for creating agitation and unrest, which had led to multiple incidents of “instability,” including but not limited to riots by alleged pro-Imran Khan protesters on May 9, 2023. 

The nationwide riots broke out when the former prime minister was briefly detained on corruption charges. Thousands of Khan supporters took to the streets in anger, allegedly torching government and military buildings across the country. This was done, the military said, at “the behest of and in collusion with vested political interests.”

The violence led to a nationwide crackdown against Khan’s supporters and party leaders. The former premier and his party deny they instigated people to attack military and government buildings. 

Hameed is widely seen as close to being Khan, who has also been in jail since August 2023 on a slew of charges that he says are politically motivated.

In the past, Hameed, who retired from the army in December 2022, was widely accused by the ruling Pakistan Muslim League-Nawaz (PML-N) party of Prime Minister Shehbaz Sharif of bringing down the government of his elder brother, Nawaz Sharif, in 2017. 

The PML-N alleges Hameed worked with then opposition leader Khan to plot Nawaz’s ouster through a series of court cases, culminating in the Supreme Court’s disqualifying of him from office in 2017 for failing to disclose income and ordering a criminal investigation into his family over corruption allegations.

TOP CITY CASE

At the time of Hameed’s arrest in August 2024, the army said it had held a detailed inquiry against him in compliance with the orders of the Supreme Court on a petition filed by the management of the Top City housing society.

The petition, filed by the owner of Top City, Moeez Ahmed Khan (applicant), said the former ISI chief “misused” his office and under his direction, crimes were committed against Moeez and his family, including raids on his residence and business offices and arrests of him and his family members.

The petition said the applicant and his family members were robbed of their properties, the applicant was robbed of his business properties and compelled to transfer his businesses into the names of those nominated by Hameed, and false cases were registered against the applicant, his family and employees.

“Complying with the orders of Supreme Court of Pakistan, a detailed court of inquiry, was undertaken by Pakistan Army, to ascertain correctness of complaints in Top City Case made against Lt Gen Faiz Hameed (Retd),” the ISPR said last year. 

Days after Hameed’s arrest, the Pakistani military said it had arrested three more retired officers in connection with the proceedings against the ex-spy chief. 

Political parties and critics often accuse that the ISI spy agency interferes in politics and government in Pakistan. The military denies the allegations.