The government has reportedly begun rejecting security clearances for foreign investors, prompting the Pakistan Tax Bar Association (PTBA) to express serious concerns about the process.Â
In a letter addressed to Federal Minister for Interior Syed Mohsin Raza Naqvi, the PTBA highlighted challenges foreign investors face under the security clearance requirements mandated by the Companies Regulations, 2024.
The regulations require all foreign subscribers and directors to file GR-Performa, undertakings, and other necessary documents through the Securities and Exchange Commission of Pakistan (SECP) to the Ministry of Interior for clearance. After incorporation, companies typically proceed with investments and establishing their premises to begin operations in Pakistan.
However, according to the PTBA, companies have started receiving rejection letters from the SECP, stating that the security clearances for foreign subscribers and directors have been denied. These letters, the PTBA noted, do not specify the reasons for rejection nor provide an opportunity for the affected parties to address any discrepancies or defects.
“This practice sends a negative signal to foreign investors who have already committed to Pakistan’s market,” the PTBA said. “Being informed post-investment that they are not security cleared jeopardizes their entire business operations and contradicts the government’s stated goal of attracting foreign investment.”
The PTBA has urged the interior minister to intervene immediately to resolve the issue and ensure a transparent and fair security clearance process, warning that failure to address the problem could undermine Pakistan’s investment climate.
