📉 The Great Pullback: Why Multinationals Are Leaving Pakistan

Published by: S&B Advisors and Consultants (Private) Limited

Author: Ms. Saima Morkas

Date: October 03, 2025

In recent years, a notable trend has reshaped Pakistan’s corporate and investment landscape: major multinational companies have either exited, downsized, or divested significant stakes. From pharmaceuticals and energy to technology and consumer goods, these departures reflect deeper structural issues undermining Pakistan’s appeal for foreign direct investment (FDI).

This is not a series of isolated events—it is a systemic signal of challenges that require urgent policy and business environment reforms.

🗓 Timeline of Major Exits & Divestments

Company	Sector	Exit / Divestment Year	Notes
Eli Lilly	Pharmaceuticals	Dec 2022	Ceased operations
Airlift	Mobility / Logistics	2022	Shutdown
Sanofi	Pharmaceuticals	Apr 2023	Exit from Pakistan
Viatris	Pharmaceuticals	Apr 2023	Divestment
Bayer	Pharma / Crop Sciences	Jun 2023	Reduced footprint
Lotte Chemical	Chemicals	May 2023	Scale-down / exit
Shell	Energy / Oil & Gas	Mid 2023	Sold stake
Telenor	Telecom	Dec 2023 (deal)	100% stake sold to PTCL
Careem	Tech / Mobility	Apr 2024	Scaled down
Pfizer	Pharmaceuticals	May 2024	Phased withdrawal
TotalEnergies	Energy / Oil & Gas	Aug 2024	Partial/complete exit
Microsoft	Technology / Software	Jul 2025	Closed local office
BASF	Chemicals	Dec 2025	Exit plan announced
Yamaha	Manufacturing / Autos	Mid 2026 (projected)	Anticipated exit
P&G	Consumer Goods	May 2026 (announced)	Switching to distributor model

🔍 Core Drivers Behind the Exodus

1. High Operating Costs – Unreliable energy, expensive inputs, and logistics overheads.
2. Currency Instability – Rupee depreciation and restrictions on profit repatriation.
3. Regulatory Uncertainty – Sudden tax changes, licensing delays, and bureaucratic hurdles.
4. Shrinking Margins – High duties on imports and inflation-driven demand compression.
5. High Financing Costs – Elevated interest rates make capital-intensive operations unfeasible.
6. Global Restructuring – Parent companies adopting leaner, partner-led models.
7. Scale & Competition Constraints – Lack of scale in telecom and manufacturing sectors.
8. Risk Premiums – Political instability and security concerns raising perceived risks.

🧭 Spotlight Cases

Microsoft – After 25 years, closed its Pakistan office in July 2025. Operations shifted to regional hubs. The decision aligned with its global “partner-led” model.

Telenor – Sold its Pakistan business to PTCL in a PKR 108 billion deal. Leadership cited limited scale and regulatory complexity as key reasons for exit. Regulatory approvals dragged until October 2025, further underlining Pakistan’s bureaucratic hurdles.

🧾 Implications for Pakistan

1. Investor Confidence Erosion: High-profile exits reinforce perceptions of risk.
2. Job Losses & Brain Drain: Skilled professionals may migrate abroad.
3. Reduced Innovation: Loss of R&D, training, and technology transfer opportunities.
4. Lower Revenues & FX: Decline in corporate tax contributions and foreign inflows.
5. Market Consolidation: Fewer large players, potential dominance of select local firms.

📌 Roadmap for Rebuilding Investor Trust

1. Policy Certainty – Multi-year tax, energy, and trade frameworks.
2. Energy & Infrastructure Reform – Reliable power supply and modern logistics.
3. Ease of Doing Business – Streamlined approvals, one-window clearances.
4. Currency Flexibility – Liberal profit repatriation and hedging mechanisms.
5. Local Value Addition – Incentives for domestic raw material production.
6. Public-Private Dialogue – Formal investor forums to identify and resolve bottlenecks.
7. Sectoral Guarantees – Targeted support for telecom, pharma, and energy investors.
8. Macro Stability & Rule of Law – Inflation control, deficit reduction, and predictable dispute resolution.

📝 Conclusion

The wave of multinational exits from Pakistan is a wake-up call. It highlights structural issues that hinder investment and growth: unpredictable policy, macroeconomic volatility, regulatory inefficiencies, and rising costs.

The costs of inaction are significant—lost jobs, diminished innovation, and weakened investor confidence. Yet, with a focused reform agenda, Pakistan can reverse this tide and re-establish itself as a competitive destination for global capital.

✨ At S&B Advisors, we’re more than accountants — We’re partners in your success.

📞 +92 300 0632823

📍 Office No. 1, Ground Floor, Marium Arcade, BC5, Block 9, Clifton, Karachi-75600

🌐 www.sbconsultantsltd.com

#SBAdvisors #BusinessAdvisory #AccountingExcellence #BusinessResilience #SMEs #FinancialStrategy #ModernFinance #TaxAdvisory #BusinessGrowth #PartnersInSuccess #FDI #PakistanEconomy #EaseOfDoingBusiness #InvestorConfidence #EmergingMarkets #GlobalBusiness #EconomicReform