Pakistan’s efforts to attract foreign investment continue to face significant hurdles as worsening security conditions and governance-related challenges erode investor confidence, according to a recent survey conducted among leading foreign companies operating in the country. The findings indicate that concerns over law and order, employee safety and policy inconsistency are increasingly influencing investment decisions and limiting business expansion.
The latest Security Survey 2026 by the Overseas Investors Chamber of Commerce and Industry (OICCI), carried out in June, reveals that security has emerged as one of the three biggest concerns for foreign investors. Around 71 per cent of the participating companies identified the country’s security environment as a major issue affecting their business operations and future investment plans. The survey findings were reported by Pakistani media.
The report points to a deterioration in security perceptions across several regions of Pakistan. Karachi, the country’s commercial hub, witnessed growing apprehension among businesses, with nearly 42 per cent of respondents stating that the city’s security situation had worsened. The picture was even more concerning in Balochistan, where 81 per cent of respondents in Quetta and 86 per cent from other parts of the province reported a decline in overall security conditions. Businesses also expressed increasing concern about the safety of employees commuting to work, particularly in Karachi and Quetta, where incidents linked to insecurity have become a major operational challenge.
Apart from physical security, investors highlighted several administrative and governance-related issues that continue to undermine Pakistan’s investment climate. Respondents cited inconsistent government policies, bureaucratic delays and weak implementation of regulations as persistent obstacles to doing business. Many companies also pointed to demands for unofficial payments by certain law enforcement officials and a lack of transparency in administrative processes, further discouraging fresh investment. These issues, investors said, contribute to an unpredictable business environment that increases operational costs and risks.
The survey also noted that regional instability, much of which lies beyond the direct control of Pakistan’s government, has compounded the country’s economic challenges. Heightened geopolitical tensions and security threats have added to investor uncertainty, making multinational companies more cautious about expanding their presence in Pakistan. Business leaders believe that without meaningful improvements in law and order, attracting substantial foreign capital will remain difficult despite government initiatives aimed at promoting investment.
Pakistan has been attempting to revive foreign direct investment through policy reforms and investment facilitation measures, including initiatives designed to simplify approvals and attract strategic investors. However, analysts note that such efforts are unlikely to deliver the desired results unless accompanied by stronger governance, improved public security and greater policy stability. Investor confidence, they argue, depends not only on economic incentives but also on a predictable operating environment where businesses can function without significant security risks or administrative uncertainty.
The survey underscores that restoring investor confidence will require sustained efforts to improve security, strengthen institutions and ensure consistency in policymaking. As Pakistan seeks to boost economic growth and generate employment through increased foreign investment, addressing these structural concerns is expected to remain one of the country’s most pressing economic priorities. Without tangible improvements in the business environment, experts believe Pakistan could continue to struggle in attracting the level of international investment needed to support long-term economic recovery and development.
