In a bid to boost exports, the State Bank of Pakistan has allowed exporters of goods and services to retain a certain portion of their exports proceeds in their Special Foreign Currency Accounts (SFCA).
The funds from these accounts, however, could be utilised for specified purposes only. 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 SFCAs can be utilised. 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.
Exporters shall be able to use SFCAs to make payments abroad for a number of additional purposes including advertisement, promotion, marketing, brand building etc; payments for registration of patents, copyrights, drug registration, license fee etc.
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 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.