OVERSEAS INVESTORS CHAMBER OF COMMERCE AND INDUSTRY ANNUAL REPORT 2018 THE DOTS ON THE TITLE PAGE REFLECT THE OICCI MEMBERS’ REPRESENTATION FROM 35 COUNTRIES ACROSS THE WORLD Vision To be the premier body for promoting new and existing overseas investment in Pakistan by leveraging world-class expertise of OICCI members for the benefit of the investors and the country QUAID-E-AZAM MOHAMMAD ALI JINNAH BEING WELCOMED BY THE CHAIRMAN, R. L. COGHLAN, AT THE CHAMBER’S ANNUAL CONFERENCE IN 1948 Mission • To assist in fostering a conducive, open and equitable business environment in Pakistan • To facilitate the transfer of best global practices to Pakistan • To enhance the image of overseas investors in Pakistan and of the country abroad Contents 01 OICCI Profile Report of the Managing Committee 03 09 Managing Committee Members 2018 Summary of OICCI Activities 2018 11 a) Policy Reforms and Advocacy b) Investment Promotion c) Profile Building and Networking d) Information Dissemination e) OICCI’s Representation on Various Bodies 40 Financial Statements Notice of the 159th Annual General Meeting 59 60 Meetings of the Managing Committee List of OICCI Members 61 OICCI Profile The Overseas Investors Major contributor to the economy of Chamber of Commerce and Pakistan Industry (OICCI) is the • About one third of the total taxes and levies in collective voice of all major Pakistan are collected from OICCI members foreign investors in Pakistan. • Total value of members’ assets in excess of PKR 10 trillion Established over 150 years ago in 1860, primarily as a • Annual new capital expenditure in excess of PKR 297 billion business chamber for foreign • Members provide direct and indirect investors, the OICCI is employment to around one million people engaged in promoting Foreign • Significant role in various CSR activities across Direct Investment (FDI) in the country – over 60 million beneficiaries in Pakistan, besides protecting 2017-18 the interest of existing foreign Incentives for Foreign Investors in investors/OICCI members. Pakistan Through its diversified • 100% foreign shareholding allowed in legal activities, the OICCI entities incorporated in Pakistan contributes significantly to • No restriction on repatriation of dividends, royalties and capital supporting commerce and • Business losses can be carried forward for six industry across the country. years for tax purposes • No minimum capital requirement except in the banking sector • Avoidance of double taxation agreements with • 187 Members belong to 35 countries and over sixty countries involved in 14 key sectors of Pakistan economy • Several fiscal incentives like tax holidays and accelerated tax depreciation • 56 OICCI members are listed on Pakistan Stock • Level playing field – no discrimination between Exchange foreign and local investors • Intellectual Property Rights law enacted in • 50 Members are associates of the 2018 Global 2012 Fortune 500 Companies • Ease of hiring expatriates • Other fiscal incentives: Special Export Processing Zones 01 OICCI OICCI Members Country of Origin Others United States of America United Kingdom Netherlands United Arab Emirates Emirates United Arab Japan Switzerland Germany Singapore France France Hong Kong Hong Kong Italy China 27 25 20 13 13 12 11 07 06 04 04 03 42 Members’ Representation in all Major Business Sectors Oil / Gas Energy Banking / Insurance / Banking / Insurance Finance & Leasing Pharmaceutical / Chemicals / Pesticides Cement / Paints/ Fertilizers Trading & Other Services Trading Food / Consumer Products Food Engineering / Industrial Products IT & Communication Shipping & Airlines Automobile Printing & Publishing Telecommunications Tobacco Security Services 31 29 23 23 22 21 12 09 05 03 03 03 02 01 Annual Report 2018 02 Report of the Managing Committee The Managing Committee (MC) Members of the Overseas Investors Chamber of Commerce and Industry (OICCI) are pleased to present the Annual Report of your chamber along with the audited financial statements for the year ended December 31, 2018 and the Auditors’ Report thereon. Overview of the It is encouraging that the government has managed to boost the depleting foreign Business Environment exchange reserves of the country with assistance from few friendly countries As expected, 2018 has been a and has shown commitment to kick start challenging year for the country with the economic growth by addressing intense political activity and far reaching issues relating to shortfall in tax revenue, impact on the economy and business growing level of circular debt and confidence. Following a poor necessary measures required to boost performance on Balance of Trade and exports. There is, however, a need for the Balance of Payment, the Pakistani Rupee government to layout its mid-term came under tremendous pressure and economic recovery strategy showing a depreciated over 25% since the clear roadmap for sustainable economic beginning of the year including 15% since growth during the next few years. The July 2018. The State Bank of Pakistan government needs to share soon its (SBP) raised the Policy Discount Rate to strategy to diversify and enhance a record level of 10% in November, and exports, and more importantly the Inflation also increased rapidly in the last Industrial Policy for 2019 and beyond, so six months of the year, partially due to as to attract sizeable domestic and increasing international oil prices and foreign investment in manufacturing and rupee devaluation. The new government job creating ventures. The key economic has already introduced, in September stakeholders are also seeking more 2018, a Supplementary Finance Act information about the way forward on which is expected to be followed by a mini CPEC projects and the role private sector budget in January 2019 with the aim to can play in harnessing full economic consolidate the economic fundamentals benefit of this great China-Pakistan of the country. The rapid change in the initiative of “One Belt One Road.” The economic landscape especially during progress on government’s strategy to the last six months, though it may have arrest the huge financial burden from the been unavoidable, is bound to negatively loss making State Owned Enterprises impact the business and investment (SOE), we hope, will be visible during environment and may slow down the 2019. GDP growth in the ongoing fiscal year 2018-19. 03 OICCI The Foreign Direct Investment (FDI) inflow into the Pakistan and for promoting the FDI opportunities to country, during the fiscal year 2017-18 at USD 2.8 potential foreign investors and diplomats, as well as billion, stayed flat as compared to the previous year. the fact that OICCI members are significant investors During the first five months of the ongoing fiscal year in the country and made capital investment of over 2018-19, the FDI at USD 0.9 billion is substantially USD 10.4 billion in the past 6 years. We also raised lower than the already low FDI of USD 1.4 billion in the members’ concern on various issues including the corresponding period last year. The downward slide in long pending tax refunds, growing number of the FDI trend is a matter of great concern for all the interprovincial coordination issues, lack of stakeholders. You will be pleased to know that despite harmonization of food standards among the the low FDI inflow into the country, the OICCI provinces, and delays in settlement of issues like members have once again given a visible vote of pharma pricing following PKR devaluation. We also confidence to the potential of the country and invested offered to the government, OICCI members’ expertise USD 2.7 billion, in the previous year in new capital in improving EODB, streamlining taxation structure, expenditure to enhance industrial capacities and implementing the Energy Reform recommendations modernize their facilities. and building up a positive image of the country overseas by sharing the success stories of our Your MC in its two meetings with the Prime Minister, in members operating in Pakistan and in sharing January and December 2018, as well as in regular strategies which have worked internationally in meetings with the government ministers and boosting investment and exports. functionaries, diplomats and various foreign visitors and delegations have presented a balanced view of The Chamber’s President, Irfan Wahab Khan, also the FDI environment and opportunities, but more presented to the Prime Minister the OICCI importantly identified what actions are required to ‘Recommendations on National Program for Digital facilitate large scale FDI in the country. Significantly Transformation’ which if acted upon could lead the improved security situation together with improved country into an era of digital and financial inclusion energy supply and smooth transition of political and good governance and help in the positive leadership, for the third time in the past ten years, branding of Pakistan. support the positive opportunities available to attract large FDI in the country. The OICCI is an active The Prime Minister acknowledged the contribution of participant in the Prime Minister-led efforts to improve OICCI members and promised full support to foreign the Ease of Doing Business (EODB), which together investors in their business growth plans. The Prime with predictable, consistent and transparent policies Minister was also appreciative of the OICCI initiative and its implementation are needed to attract on Digital Recommendations which will be leveraged international investors to Pakistan.
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