PAKISTAN: Cross-Border Commercial Payment Procedures Streamlined
26 August 2021
In a bid to simplify the cross-border commercial payment process, the State Bank of Pakistan (SBP) has amended a number of the provisions of the country’s Foreign Exchange Manual. This sees banks now entitled to register relevant party agreements and process royalty, franchise and technical fee (RFT) remittances without a prior SBP sign-off. In addition, in a raise on previous limits, manufacturers are now permitted to remit up to US$1 million as an upfront payment and up to 8% of net sales, excluding taxes and the cost of imported parts, via their bank. In a further move, Pakistani entities with overseas counterparts are to be permitted to remit recurring royalty payments of up to 10% of net export sales, after taxes and the cost of imported inputs.
At the same time, the amendments see the annual limit assigned to 62 white-listed digital service providers increased from US$200,000 to US$400,000, while the annual remittance limit on the purchase of digital services from other providers rises from US$25,000 to US$40,000. New arrangements have also been put in place with regards to logistics-related cross-border payments, such as container detention charges, port demurrage charges, and the payment of charter costs direct to the owner of a ship or aircraft.
- Banking Services
- Other Asian Countries