The State Bank of Pakistan (SBP) has introduced comprehensive reforms to facilitate IT exporters and freelancers, aiming to simplify export realisation procedures, standardise documentation requirements, set timelines for transaction processing, and strengthen complaint resolution mechanisms. The measures are designed to boost Pakistan’s IT export earnings and enhance the ease of doing business for the technology sector.
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The central bank announced that IT companies and freelancers will no longer be required to submit Form ‘R’ for every individual export transaction. Instead, they will provide a one-time declaration, clearly specifying the nature of services being offered overseas, at the time of opening a new account. For existing customers, such declarations will be required as and when needed.
Simplified Documentation and Faster Processing
Authorised dealers (banks) will tag the relevant service and purpose code with the exporters’ account for reporting and processing export transactions, unless advised otherwise by the exporter. A maximum turnaround time of one working day has been introduced for processing inward export receipts and outward remittances from Exporters’ Special Foreign Currency Accounts (ESFCAs).
| Measure | Detail |
|---|---|
| Form ‘R’ Requirement | Eliminated for individual transactions; one-time declaration only |
| Processing Time | Maximum 1 working day for inward/outward ESFCA transactions |
| ESFCA Retention Limit | $5,000/month or 50% of export proceeds (whichever is higher) |
Increased Retention Limits
IT companies and freelancers will be allowed to retain $5,000 (or equivalent) per month or 50% of the export proceeds, whichever is higher, in their ESFCAs. Authorised dealers will mandatorily credit the permissible amounts in these ESFCAs, unless the exporter specifically requests, in writing, preferably at the time of account opening, that a lesser amount or no export proceeds be credited.
Flexible Use of ESFCA Balances
Balances held in the ESFCAs of IT companies may be utilised for making all types of payments of a current account nature (for example, imports, acquisition of services from abroad, profit and dividend repatriation against registered shares, etc.) for their own business purposes without SBP’s prior approval. This flexibility is expected to significantly ease operational constraints for IT exporters.
Standardised Documentation and Digitalisation
Documentation requirements for outward remittances from ESFCAs for acquiring services from abroad have been standardised to promote clarity and consistency across banks. Banks have been instructed to establish effective internal systems to ensure the timely resolution of complaints raised by IT companies and freelancers, thereby enhancing service quality and responsiveness.
The reporting requirements for exporters and importers of services have also been simplified through revisions in Form ‘R’, the Inward Remittance Voucher (IRV), and Form ‘M’. The threshold level for obtaining Form ‘R’ has been increased to above $25,000 (or equivalent in other currencies) , providing greater convenience to beneficiaries.
Banks have been advised to digitalise Form ‘R’ and Form ‘M’ with auto-population functionality for the customer’s basic data to further promote ease of doing business.
About the State Bank of Pakistan
The State Bank of Pakistan (SBP) is the central bank of the country, responsible for regulating the monetary and credit system, ensuring financial stability, and promoting economic growth. The SBP oversees the banking sector and implements policies to support Pakistan’s export industries.
