High tax rates hinder investment, says Swedish envoy

KARACHI: High tax rates and energy prices discourage Swedish companies from investing in Pakistan, Sweden’s ambassador to Islamabad said on Thursday.

Alexandra Berg von Linde said Swedish companies are facing challenges like high tax rates when it comes to foreign investment besides high energy prices and the difficulties in transferring foreign currencies.

“More than 40 Swedish companies have set up shop in Pakistan over the years. A number of these are known brands and have been present here for decades,” she said in an address to the Karachi Chamber of Commerce and Industry (KCCI) on Thursday.

“These companies have supported Pakistan’s growth and are acquainted with the complexities of the local business climate,” the ambassador said.

These companies see the potential for investment here, but addressing the challenges they face is crucial to creating conducive environment for foreign investment, Alexandra Linde emphasised.

The Swedish envoy said her country was interested in enhancing cooperation with Pakistan, particularly in digitalisation and green transition. “These areas offer a win-win opportunity for both countries. For Pakistan to stay competitive and relevant in the EU market, a green transition is essential,” she said.

The ambassador said the Swedish Business Council was an entry point for companies interested in the Pakistani market.

About GSP Plus, Alexandra Linde said it “is an open and generous system that promotes economic growth and sustainable development”.

“But we all know that there are conditions attached to the GSP system in terms of implementation of international conventions about workers’ rights, environmental regulations or governance principles. I know that Pakistan is working closely and continuously with the European Union to stay aligned with GSP regulations,” she said.

“We are also pleased to see talented and highly educated students travelling from Pakistan to Sweden every year to pursue higher education. These students serve as excellent ambassadors as they contribute to their country’s progress with the specialised knowledge they acquired in Sweden,” Ambassador Linde said.

Ziaul Arfeen, senior vice president of KCCI, expressed satisfaction over a recent understanding between Pakistan and Sweden to deepen economic collaboration and coordinate their stands at multilateral forums, including the United Nations and the European Union.

The EU has consistently been Pakistan’s largest export destination, with exports surpassing the $8 billion mark in FY24. “Sweden has emerged as a significant trading partner for Pakistan,” Ziaul Arfeen added.

Published in Dawn, November 22th, 2024