SBP overhauls foreign exchange rules to boost IT exports

WEB DESK: The State Bank of Pakistan (SBP) has taken significant steps to bolster export-oriented enterprises, particularly those in the IT sector, by updating its Foreign Exchange Manual (FEM).

A recent circular from the SBP’s Exchange Policy Department announced revisions aimed at facilitating these companies in expanding their global presence and enhancing the nation’s exports.

Key amendments under Para 13(II)A of Chapter 20 of the FEM include the introduction of a new category under the Exporters’ Investment Account (EIA) tailored for IT-focused export firms.

Notably, the requirement for prior bank designation for exporters using funds from Exporters Special Foreign Currency Accounts (ESFCAs) has been lifted, streamlining financial operations.

Additionally, export-oriented IT companies now have the green light to acquire stakes in foreign entities, marking a pivotal relaxation in ownership regulations. Furthermore, restrictions limiting these companies to establishing or acquiring only one entity per jurisdiction have been eased, facilitating broader international market access.

These revisions are poised to empower IT export firms, enabling them to navigate global markets more effectively and contribute significantly to Pakistan’s export landscape.

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