ISLAMABAD: Showing improved business confidence, a vast majority of more than 200 leading foreign investors operating in Pakistan have termed Pakistan a viable destination and better than its peers for foreign investment.
In its biennial Perception and Investment Survey 2025, Overseas Investors Chamber of Commerce and Industry (OICCI) -- a business group of more than 200 leading foreign investors -- said 73pc of its members recommend Pakistan as a viable destination for foreign direct investment (FDI), a notable rise from 61pc in 2023.
The survey released on Tuesday noted this shift as a reflection of improved macroeconomic stability, reduced inflation -- down from 37pc in mid-2023 to 4pc by July 2025 -- and a relatively stable rupee, alongside upgraded international credit ratings.
Overall, the survey revealed a cautiously optimistic outlook from foreign investors on Pakistan's business and investment climate.
OICCI survey shows 73pc of top foreign investors view Islamabad as viable FDI destination
The survey highlighted Pakistan's improved regional standing on investment viability compared to 2023 versus several peers, including Bangladesh, Vietnam, and the Philippines. "Parent company interest has increased, as 35pc of respondents reported that their headquarters are now considering Pakistan a priority destination for new FDI, compared to 24pc in 2023".
Commenting on the Perception Survey 2025, OICCI President Yousaf Hussain said the notable upward shift in investor sentiment demonstrated that economic stability and policy coordination were beginning to deliver results. "Initiatives like the SIFC have provided a structured mechanism for investment facilitation and inter-governmental alignment. In the future, deeper private-sector inclusion and continued reforms in taxation and regulatory efficiency will be key to sustaining this momentum", he said
The survey also found investor perception of business risk to have shifted favourably, moving from a predominantly high-risk to a medium-risk outlook, reflecting improved macroeconomic management and relative stability. However, the findings also indicated that structural bottlenecks continue to constrain Pakistan's investment potential. "Among the most critical concerns, federal-provincial coordination received negative feedback from 57pc of respondents".
According to the survey, 96pc of respondents reported higher energy costs, 95pc faced increased wage expenses, and 91pc cited higher domestic raw material costs. Over 80pc expressed concern over delayed tax refunds, which in most cases take more than two years to process. Furthermore, over half of respondents indicated that commercial disputes take over five years to resolve, highlighting the need for judicial reform and more efficient dispute resolution.
Members' perceptions of Pakistan's economic outlook have improved noticeably since 2023. When asked about their sector-specific expectations for the next two to three years, 58pc of respondents now foresee global economic growth, a significant rise from 40pc in the previous survey. "This improvement mirrors gains in key macroeconomic indicators, including greater inflation stability, exchange rate management, and stronger capital market performance", the OICCI said.
The survey participants also recommended enhancing Pakistan's digital and regulatory landscape, supported by stronger human capital and a comprehensive, sector-focused investment policy. They emphasised developing non-IT industrial capacity to diversify growth.
Strengthening Pakistan's global image was also seen as vital to attracting long-term FDI.
On global perception, 82pc of respondents noted that negative international coverage continues to influence investment decisions, highlighting the need for a proactive communications strategy to project Pakistan's economic recovery and reform progress at global forums.
The survey's recommendations call for broadening the tax base, ensuring policy consistency, strengthening coordination between federal and provincial governments, and enhancing intellectual property rights enforcement to sustain investor confidence and attract long-term FDI.
Published in Dawn, October 29th, 2025