SBP eases regulations to empower freelancers, IT exporters

WEB DESK: In a significant move aimed at boosting the exports of information technology (IT) and IT-enabled services, the State Bank of Pakistan (SBP) unveiled a set of new measures on Monday.

These measures are tailored to facilitate IT exporters and freelancers, paving the way for an enhanced export landscape in the country.

One of the key initiatives taken by SBP involves raising the permissible retention limit for IT exporters. Previously set at 35 per cent of their export proceeds, this limit has now been increased to 50 per cent.

1/2 To facilitate IT exporters, #SBP has increased the retention limit of export proceeds, from 35% to 50%. Now, such exporters can also make foreign payments from the retained amount without approval from SBP or banks.https://t.co/xTFlkUa9RI pic.twitter.com/JlWChB35C5

— SBP (@StateBank_Pak) October 23, 2023

This boost allows IT exporters to retain a larger portion of their earnings in the Exporters’ Specialised Foreign Currency Accounts (ESFCAs).

Moreover, accessing the funds stored in ESFCAs has been streamlined for IT exporters. They are now empowered to make payments directly from these accounts without the need for prior approval from SBP or banks.

To further facilitate seamless transactions, banks have been instructed to issue debit cards to IT exporters, enabling them to conduct online payments using the funds available in their ESFCAs.

In addition to these changes, SBP has introduced a comprehensive framework tailored for freelancers.

This initiative aims to simplify the process of opening bank accounts for freelancers and allow for a higher retention of funds in their foreign currency (FCY) accounts.

Notably, freelancers now have the flexibility to open bank accounts either digitally or through physical means, with minimal documentation requirements.

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Crucially, freelancers will have their ESFCAs set up simultaneously with the opening of their primary Pakistani rupee (PKR) accounts, streamlining the entire process.

Under these new guidelines, freelancers can retain 50 per cent of their export proceeds, or a minimum of USD 5,000 per month, in their ESFCAs.

Importantly, they are authorised to make all necessary payments directly from these accounts, eliminating the need for approval from SBPs or banks.

This forward-looking approach by SBP not only simplifies financial processes for IT exporters and freelancers but also fosters a conducive environment for the growth of IT exports and services in Pakistan.

These measures are expected to significantly enhance the country’s IT export sector and empower freelancers, thereby contributing to the overall economic development of Pakistan.