Latest news with #MNCs
Arab News
a day ago
- Business
- Arab News
Heavy taxes, inconsistent policies forcing multinationals to leave Pakistan, trade representative says
KARACHI: Many multinational corporations (MNCs) have 'packed up' and left Pakistan in recent years because of the country's 'inconsistent policies and a complicated tax regime,' Overseas Investors Chamber of Commerce & Industry (OICCI) CEO Abdul Aleem said this week. Prime Minister Shehbaz Sharif's government has imposed as much as 29 percent taxes on corporate incomes to increase the cash-strapped country's revenues with the help of International Monetary Fund (IMF) that wanted Islamabad to tax incomes from agriculture, real estate and retail sectors in the fiscal year 2025-26 budget that Finance Minister Muhammad Aurangzeb is expected to present on June 10. 'Basically the issue with our members and which generally the foreign investors are facing is that the consistency of policy is not there,' Aleem told Arab News in an interview on Friday. Pakistan's existing tax regime is 'very complicated' and leads to a lot of litigations while abrupt changes in the government's corporate policies have seen global giants like Shell plc., TotalEnergies SE and some pharmaceutical firms divest their shares in the country, the world's fifth most populous nation and thus a big consumer market. The OICCI is the biggest taxpayer in Pakistan that has been paying Rs15 billion ($53.2 million) daily in taxes, which is about one-third of the total taxes the nation collects in a year, according to its CEO. Its members include Pepsi-Cola International (Private) Limited, Pakistan Kuwait Investment Company, Citibank N.A., Toyota's Pakistan unit Indus Motor Company Ltd. and Maersk Pakistan (Pvt.) Ltd. 'Many of the companies packed up a few years back,' Aleem said. TotalEnergies SE sold 50 percent of its shareholding in Total PARCO Pakistan Ltd. to Gunvor Group last year, while Shell plc sold a majority stake in its Pakistan business to Wafi Energy LLC of Saudi Arabia in November 2023. Higher taxes on the incomes of corporate and salaried persons is another area of concern for foreign investors who directly or indirectly employ around one million Pakistanis. Sharif's government has been charging businesses as much as 10 percent as super tax, 18 percent sales tax, and 29 percent as corporate tax this fiscal year, which ends on June 30. 'In comparison to the region, it is higher,' Aleem said about the corporate tax, which he said should be slashed to 25 percent through a one percent annual reduction. The 18 percent sales tax too should be reduced on the same pattern to 15 percent that will align the levy to what is being paid in the region, according to the OICCI CEO. The 10 percent super tax should be abolished in the next three years so that the MNCs operating in Pakistan could be more competitive. The government should provide relief to the heavily-taxed salaried persons in FY26 budget to stop the so-called brain drain from the country. Record number of skilled individuals and professionals deserted Pakistan for other countries and inflicted a huge loss on the South Asian nation in the form of human capital and resources, Bloomberg News reported in October. The Pakistani government, which is charging salaried persons as much as 35 percent tax on incomes, has said it wants to provide some relief to them in the new budget, which will take effect from July. 'The salary taxes in Pakistan are very high. It should be reduced immediately because it is having an impact,' the OICCI chief said. 'It is very necessary that we get good quality people to remain in the country and work for the industry as well. And there should be an element of fairness in taxation.' In recent years, PM Sharif's government has been trying to attract foreign direct investment (FDI) into the country and has established a Special Investment Facilitation Council (SIFC), a civil-military forum, to rid foreigners of bureaucratic hurdles. However, the investment inflows have been dismal and could not increase beyond $3 billion a year. 'The government has to facilitate the existing foreign investors by not only streamlining the tax rates but also streamlining the systems, tax system, compliance system so that more and more foreign investment is attracted,' Aleem said. The OICCI, he said, was the largest foreign investor in Pakistan and had brought about $20 billion fresh FDI besides reinvesting more than $23 billion in Pakistan over the last one decade. 'We are the largest taxpayers and I think there is need to rationalize the tax regime,' Aleem said, adding that the government could increase Pakistan's 10.6 percent tax-to-GDP ratio to 14 percent by taxing services, agriculture and trades. The OICCI chief said the government should decrease its expenses by 'offloading' loss-making, state-owned enterprises, including the Pakistan International Airlines, as well as plug leakages in its revenue from tobacco industry. The two MNCs, Pakistan Tobacco Company Ltd. of British American Tobacco Group and Phillip Morris International, were paying 99 percent taxes while their market share stays at 53 percent. 'That tells you that the other 47 percent or half of the industry is not paying its tax which is Rs300 billion,' he said. 'There is need for more robust action from the authorities.' Arab News contacted Qamar Sarwar Abbasi, spokesperson for the finance ministry, regarding the concerns raised by the OICCI official, but he did not offer any comment.
Economic Times
4 days ago
- Business
- Economic Times
What's there in store for metal stocks? Amnish Aggarwal explains
Live Events You Might Also Like: Amnish Aggarwal on where to find value in capital market theme (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Head-Research,, discusses the metal sector rally, noting raw material gains drove profits. Volume growth is crucial for further gains. Safeguard duties offer price support. MNCs are diluting stakes in Indian ventures due to valuation differences. Commitment levels and technology dependence are key factors. Stake reductions below 51% may signal reduced interest. The impact varies by company and metal stocks have already seen a rally and if you look at the numbers, the volumes in all the metal stocks have not been that encouraging for most of the companies. The margins have been there mainly because raw material prices have been benign. So, it is not the product pricing, but it is the raw material gains which have given them incremental profits and that is very well reflected in the stock prices because the stock prices have moved up by anywhere between 20% to 30% in the past two-three incrementally, the volume growth has to pick up. Safeguard duty is responsible for giving some hopes that the prices will be sustained and the profitability will remain healthy. If the profitability remains healthy, we will not see any big cut happening in the stock prices of all the metal companies. But incrementally, from here on, the returns should be more moderate than what we have seen particularly in the last month or have to look at this on a case-to-case basis because many of these companies or MNCs today are holding stocks not because they had come in very willingly or something, but because the government regulations at that point of time permitted them to hold. Today, in many of these large MNCs, the kind of valuations which are there in India whether you look at say some of these durable companies like LG Electronics or even Hindustan Unilever or others, the market cap seems to be disproportionately higher in terms of valuations because the Indian companies trade at a significant premium to where their MNC parents are trading today at. That is prompting some of these MNC parents to dilute some holding over there and reallocate their resources elsewhere globally where they see more growth or do some buybacks and things like as far as growth is concerned, it depends upon how much commitment is there. For example, if there is some MNC parent which reduces a stake to say 15%, 20%, then they are gradually losing interest in that particular company and it also depends on the business of the company that how much that business is technologically or otherwise dependent upon the MNC parent. In many of the sectors where the companies need to get a continuous flow of technology from the parent, reduction of the stake below say a level of 51% in certain cases, I think that I would see that as some of the companies which you showed in the chart, particularly some of these MNCs which are in the capital goods sectors like your ABB Siemens and many of these names, there the stakes are anywhere between say 51% to 75%, a couple of them I think maybe GE Vernova has also cut down stake below 51, although the company is growing technically speaking, any company reducing the stake below 51% is not a very welcome signal because then you are not the majority holder of that company and in the longer term where your strategies are going to be, slightly difficult to say and that is how I would read and rest it all depends upon how much and what type of company it is, what type of technology transfer happens and how critical are the operations of the domestic entity for its parent.
Time of India
4 days ago
- Business
- Time of India
What's there in store for metal stocks? Amnish Aggarwal explains
Tired of too many ads? Remove Ads Also Read: Amnish Aggarwal on where to find value in capital market theme Tired of too many ads? Remove Ads , Head-Research,, discusses the metal sector rally, noting raw material gains drove profits. Volume growth is crucial for further gains. Safeguard duties offer price support. MNCs are diluting stakes in Indian ventures due to valuation differences. Commitment levels and technology dependence are key factors. Stake reductions below 51% may signal reduced interest. The impact varies by company and metal stocks have already seen a rally and if you look at the numbers, the volumes in all the metal stocks have not been that encouraging for most of the companies. The margins have been there mainly because raw material prices have been benign. So, it is not the product pricing, but it is the raw material gains which have given them incremental profits and that is very well reflected in the stock prices because the stock prices have moved up by anywhere between 20% to 30% in the past two-three incrementally, the volume growth has to pick up. Safeguard duty is responsible for giving some hopes that the prices will be sustained and the profitability will remain healthy. If the profitability remains healthy, we will not see any big cut happening in the stock prices of all the metal companies. But incrementally, from here on, the returns should be more moderate than what we have seen particularly in the last month or have to look at this on a case-to-case basis because many of these companies or MNCs today are holding stocks not because they had come in very willingly or something, but because the government regulations at that point of time permitted them to hold. Today, in many of these large MNCs, the kind of valuations which are there in India whether you look at say some of these durable companies like LG Electronics or even Hindustan Unilever or others, the market cap seems to be disproportionately higher in terms of valuations because the Indian companies trade at a significant premium to where their MNC parents are trading today at. That is prompting some of these MNC parents to dilute some holding over there and reallocate their resources elsewhere globally where they see more growth or do some buybacks and things like as far as growth is concerned, it depends upon how much commitment is there. For example, if there is some MNC parent which reduces a stake to say 15%, 20%, then they are gradually losing interest in that particular company and it also depends on the business of the company that how much that business is technologically or otherwise dependent upon the MNC parent. In many of the sectors where the companies need to get a continuous flow of technology from the parent, reduction of the stake below say a level of 51% in certain cases, I think that I would see that as some of the companies which you showed in the chart, particularly some of these MNCs which are in the capital goods sectors like your ABB Siemens and many of these names, there the stakes are anywhere between say 51% to 75%, a couple of them I think maybe GE Vernova has also cut down stake below 51, although the company is growing technically speaking, any company reducing the stake below 51% is not a very welcome signal because then you are not the majority holder of that company and in the longer term where your strategies are going to be, slightly difficult to say and that is how I would read and rest it all depends upon how much and what type of company it is, what type of technology transfer happens and how critical are the operations of the domestic entity for its parent.
New Straits Times
4 days ago
- Business
- New Straits Times
Fuelling global ambitions through high impact investments
DESPITE global uncertainties, Malaysia remains a resilient and competitive investment destination. As it advances towards becoming a high-income economy, global business hubs are central to this goal. At the forefront is InvestKL, which is leading strategic initiatives to elevate Greater Kuala Lumpur (Greater KL) as a top destination for global businesses. InvestKL chief executive officer Datuk Muhammad Azmi Zulkifli said multinational corporations' (MNCs) confidence in Greater KL reaffirms its position as a hub for modern services and cutting-edge activities. He said these investments go beyond capital. They drive knowledge transfer, strengthen local capabilities, create job opportunities and spark innovation. "Notably, InvestKL has successfully achieved its key performance indicator of securing RM35 billion in committed investments ahead of its initial target. "We are now entrusted with a new target of RM50 billion in committed investments by 2030, reinforcing our role in advancing Malaysia's economic ambitions. "With a clear strategy and a strong investor pipeline, we are confident of meeting this goal and creating wider economic spillovers that benefit Malaysia as a whole," said Azmi. INVESTMENT PERFORMANCE In 2024, InvestKL secured RM4.08 billion in foreign direct investments from 12 leading global companies, further strengthening Greater KL's position as a strategic gateway to the region. To date, InvestKL has attracted over 150 global companies, contributing a cumulative RM33.8 billion in investments and generating 31,849 executive jobs. "With 80 per cent of hires being Malaysians, InvestKL is committed to connecting MNCs with the country's talent pool. "Through partnerships with universities and upskilling initiatives, we are ensuring professionals are equipped to thrive in high-demand industries, strengthening Malaysia's position as a hub for skilled talent in the region. "Our role goes beyond investment attraction. We support MNCs in regulatory compliance, talent acquisition, business expansion and connections to key stakeholders across the ecosystem," said Azmi. A MAGNET FOR GLOBAL INVESTORS At InvestKL's 2024 Performance Highlights event, investors cited Greater KL's rich business ecosystem, access to skilled talent and supportive regulatory frameworks as key drivers in their decision to establish regional hubs there. Malaysia's pro-investment and pro-trade stance further reinforces Greater KL's position as a gateway to Asean and beyond. One of the investors is MODEC, a global provider of floating production solutions. Its vice-president, project execution and Malaysia country manager, Masataka Utsumi, said: "Greater KL stood out due to its strong pool of industry-ready talent, robust business environment, and well-established oil and gas ecosystem. Driven by a mature and integrated energy industry and a steady pipeline of graduates, Malaysia provides a natural fit for our operations." He highlighted InvestKL as a vital partner throughout MODEC's investment journey. The agency provided end-to-end support in navigating Malaysia's regulatory landscape, enabling a smoother and more efficient setup process. Leading software provider Access Group Malaysia managing director Lim Chee Gay said InvestKL was instrumental in its office launch. "They helped us connect with key agencies and supported us in accessing tax incentives and grants. Greater KL's talent pool and innovative ecosystem impressed our leadership and will support the Access Group's expansion." Meanwhile, Vale in Malaysia chief administrative officer Afzal Mohsin said Malaysia offers strategic connectivity in the Asia-Pacific region. "In 2023, we realigned our corporate presence by moving key functions to Malaysia, bringing our operations and corporate leadership closer together. Asia-Pacific is critical for us—it's the region that consumes the most iron ore globally." "Greater KL's strategic location within the region made it the ideal choice," Afzal said. He said InvestKL played a key role in supporting Vale's transition and has facilitated Vale's connections with institutional and regulatory bodies, making it easier for the company to navigate the setup process. "They also helped us address niche talent needs through mobility support and local upskilling efforts. For a company like ours, with very specific technical requirements, this partnership has been essential," he said. Global customer experience leader Foundever chose Greater KL as its first multilingual hub in Southeast Asia, citing the area's diverse and multilingual talent pool as a key factor. "The average Malaysian speaks multiple languages, and that makes Greater KL an ideal location for us to serve our global clients," said Foundever Malaysia finance director Ronald Portula. Portula said InvestKL was key to Foundever's expansion, offering early advisory, valuable market insights, and connections to local partners and ecosystem players, ensuring a seamless setup and effective talent acquisition process. PageGroup shared service centre director Azlinda Ab Kassim highlighted Greater KL's multicultural environment and strong government support as key factors in its market decision. "Greater KL has a robust ability to nurture talent, enabling the development of a skilled workforce that can support both local and international markets," she said. Azlinda commended InvestKL for enabling the group's smooth and efficient market entry into the region. CATALYSING ECONOMIC GROWTH THROUGH TALENT AND INNOVATION Foreign investments are no longer just about capital inflows. They enable national ambitions such as job creation, talent development and innovation-led growth. This emphasis on nurturing local talent is reinforced through strong public-private collaborations, which Azmi describes as a cornerstone of InvestKL's growth. By working closely with ecosystem partners, InvestKL drives knowledge transfer and capability building. A key initiative is the Greater KL Live Lab (GKL Live Lab), now in its fifth year, that brings together MNCs, startups, small and medium enterprises (SMEs) and academia to pilot innovation and commercialised solutions. "Thirteen companies have come onboard, strengthening Greater KL's position as a regional innovation hub," Azmi said. COMMITMENT TO FUTURE GROWTH Guided by the goals of the Madani Economy framework, the New Industrial Master Plan 2030 and the New Investment Incentive Framework, InvestKL continues to play a pivotal role in shaping Greater KL into a thriving hub for global businesses, contributing to Malaysia's progress and transformation.
New Straits Times
4 days ago
- Business
- New Straits Times
Malaysia emerges as strategic real estate hub amid global trade shifts
KUALA LUMPUR: As global trade tensions escalate and tariff policies grow more volatile, multinational corporations (MNCs) are recalibrating their real estate strategies—placing Malaysia in a strong position as a preferred investment destination, according to Knight Frank. In its latest regional report, From Whiplash to Resilience: Corporate Real Estate in the New World Order, Knight Frank highlights that sweeping tariffs—some as high as 124.1 per cent on Chinese imports during the Trump administration—have disrupted trade with over 57 countries. As a result, MNCs are moving away from speculative expansion and instead prioritising operational resilience, seeking locations that offer clarity, agility, and fit-for-purpose real estate solutions. Malaysia is emerging as a standout choice, with the report noting its appeal for cost-efficient, adaptable, and future-ready industrial property offerings. While regional peers such as Vietnam and India remain attractive for their scale, Knight Frank underscores Malaysia's strategic flexibility as a key differentiator in today's fragmented global trade landscape. "In today's fragmented trade landscape, Malaysia is proving attractive not because of bold moves but because of its ability to offer reliable, purpose-built industrial solutions that align with the operational demands of modern businesses," said Keith Ooi, group managing director, Knight Frank Malaysia. Knight Frank's research points to a significant uptick in Chinese investment into Malaysia's manufacturing sector, with inflows jumping from RM3.85 billion in 2017 to RM19.67 billion in 2018. This growth is being fuelled by manufacturers seeking supply chain diversification and a hedge against rising costs elsewhere. This trend, recently revitalised by high-level diplomatic engagements such as President Xi Jinping's state visit, reflects growing demand for build-to-suit facilities offering shorter leases, cost transparency, and customisable fit-outs, attributes increasingly sought in the post-pandemic era. Christine Li, head of research for Asia-Pacific at Knight Frank, added, "Malaysia's real estate market has quietly adapted." "We're seeing a shift from rigid 5-year lease terms to more agile, modular structures, especially in suburban industrial zones. These changes cater to SMEs and MNCs alike who are navigating unpredictable tariff regimes." The report stated that government support is also bolstering investor sentiment. Initiatives like the Johor–Singapore Special Economic Zone (JS-SEZ) aim to boost cross-border SME collaboration and enhance logistics, reinforcing Malaysia's positioning as a strategic—not secondary—player in regional economic realignment. While the global outlook remains cautious, Knight Frank sees Malaysia as offering "mixed but promising" potential, thanks to its strong fundamentals, policy clarity, and ability to adapt to shifting regional demand. "Malaysia may not be the loudest player in the room, but its flexibility, policy clarity, and infrastructure readiness are increasingly winning over global occupiers looking for long-term viability, not just short-term arbitrage," said Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank. As global supply chains decentralise, Malaysia's ability to deliver future-fit, agile real estate solutions may well become its most valuable competitive advantage.
