Karachi July 11 2024: State Bank of Pakistan made changes in Foreign Exchange Manual, which contains framework for Equity Investment Abroad (EIA) by residents in order to facilitate IT companies.
In order 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, the provisions of Para 13(II)A of Chapter 20 of Foreign Exchange Manual (FEM) have been revised.
The major revisions include:
- 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.
