SBP updates FEM to support export oriented IT companies

SBP updates FEM to support export oriented IT companies

By: Communicators - Business Team (July 12, 2024)

State Bank of Pakistan (SBP) has updated its Foreign Exchange Manual (FEM) to support export-oriented companies, especially in the IT sector. These revisions, detailed in a circular from the Exchange Policy Department, aim to help these companies expand internationally and boost national exports. Key changes in Para 13(II) A of Chapter 20 of the FEM include:

• New EIA Category: A new Exporter Internationalization Account (EIA) category for IT sector companies.

• Bank Designation Requirement Removed: Exporters no longer need prior bank designation for using funds from Exporters Special Foreign Currency Accounts (ESFCAs) for EIA.

• Acquiring Interest Abroad: IT companies can now acquire shares in foreign entities.

• Relaxed Jurisdiction Restrictions: The restriction on establishing or acquiring only one entity per jurisdiction has been relaxed for IT companies.

Authorized Dealers are instructed to inform all relevant parties and ensure compliance with these updates.