The State Bank of Pakistan (SBP) has updated its Foreign Exchange Manual (FEM) to help companies that focus on exporting, especially those in the Information Technology (IT) sector. This move aims to make it easier for these companies to expand internationally and increase Pakistan’s exports.
New Rules for IT Exporters
The SBP’s Exchange Policy Department released a circular on Thursday detailing the changes. These changes are designed to support export-oriented IT companies by simplifying certain rules and removing some restrictions. The main updates are:
New Category for IT Exporters
A new category called Export Incentive Account (EIA) has been introduced specifically for IT companies that focus on exporting. This category aims to provide better support and incentives for these companies to grow.
No More Bank Designation Requirement
Previously, companies needed to designate a specific bank before using funds from their Exporters Special Foreign Currency Accounts (ESFCAs). This requirement has now been removed, making it easier for companies to manage their finances.
Acquiring Shares in Foreign Companies
IT companies can now acquire shares in foreign companies. This means they can own a part of businesses outside Pakistan, which can help them grow and become more competitive in the global market.
Setting Up Multiple Entities Abroad
Earlier, IT companies were restricted to establishing or acquiring only one entity per country. This restriction has been relaxed, allowing companies to set up or acquire multiple entities in the same country. This change can help companies expand more freely and strategically.
Ensuring Compliance
The SBP has incorporated these changes into Para 13, Chapter 20 of the FEM. Authorized Dealers have been instructed to inform all their clients about these new rules and ensure they are followed carefully.
