The State Bank of Pakistan (SBP) has revised Foreign Exchange Manual (FEM) to facilitate export-oriented companies.
A circular issued by the Exchange Policy Department of the central bank on Thursday said that the amendments have been made to further facilitate export oriented companies, particularly those operating in the IT sector, in expanding their footprints abroad and increase the exports of the country.
Under the revision, following changes have been made in provisions of Para 13(II)A of Chapter 20 of Foreign Exchange Manual (FEM):
- Introduction of a new EIA category for export oriented companies operating in the IT sector.
- Removal of requirement of prior designation of bank for exporters utilizing funds for EIA from Exporters Special Foreign Currency Accounts (ESFCAs).
- Permission for export oriented companies in the IT sector to acquire interest (percentage of shareholding) in entities abroad.
- Relaxation of restriction of establishing/acquiring one entity per jurisdiction for export oriented companies in the IT sector.
The relevant amendments have been incorporated in Para 13, Chapter 20 of FEM. The central bank has also advised Authorized Dealers to bring the above development to the notice of all their constituents and ensure meticulous compliance.
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