SBP relaxes foreign payment rules for exporters

KARACHI: The central bank on Friday allowed exporters of goods and services to retain a certain portion of their exports proceeds in their special foreign currency accounts for spending abroad.

The fund from these accounts, however, could be utilised for specified purposes only, the State Bank of Pakistan (SBP) said in a statement.

“Over time the types of payments that exporters need to make have increased as exports are becoming more diversified. In order to facilitate the exporters, SBP has now broadened the purposes for which the funds retained in these special foreign currency accounts (SFCAs) can be utilised,” said the SBP. “Banks are allowed to make payment from the accounts for a number of new purposes in addition to existing ones. However, there is no change in the percentage of export proceeds allowed to exporters for retention in these accounts.”

The SBP said exporters will be able to use SFCAs to make payments abroad for a number of additional purposes including advertisement, promotion, marketing, brand building abroad, subscription fee for participation in foreign exhibitions and fairs, payment for foreign consultant’s fee, travel expenses abroad, warehousing services, insurance expenses and shelf space expenses aboard; lab testing charges, audit/inspection/certification charges; logistics charges, refund of advance payment received against goods or services; payments for registration of patents, copyrights, drug registration, licence fee.

Moreover, payment for acquisition of digital services from abroad, operational expenses of liaison/ marketing/ representative offices abroad etc. and investment in subsidiaries or joint ventures abroad can also be made using the funds held in above-mentioned accounts subject to applicable regulatory framework.

“It is expected that the revised instructions would help a great deal to our exporters in promoting their products and brands abroad, which would not just increase their footsteps in foreign jurisdiction but would also increase their exports business.

SBP would continue with its resolve to facilitate the business community, particularly the exporters, through creating an enabling regulatory environment conducive to fulfill their legitimate needs,” said the SBP.

The new instructions come on the heels of relaxation for exporters to transfer money from Pakistan to set up subsidiary offices in foreign markets. This aims at to help them build brands and improve footprints internationally.