Pakistan Business Council (PBC) has welcomed State Bank of Pakistan (SBP) latest revision in its Foreign Exchange (FE) Manual, saying that it will heighten the presence of Pakistani exporters abroad.

“PBC thanks SBP, Government of Pakistan for accepting its recommendations on investment abroad by exporters. It will enable exporters to heighten their presence abroad by buying/establishing marketing companies and branch offices,” said PBC in a statement.

“Under the revised policy exporters may invest up to 10% of average annual exports of last 3 years or $100,000, whichever is higher, to establish subsidiaries/branch offices abroad,” it added.

SBP on Wednesday notified revisions in chapter 20 of the Foreign Exchange Manual to facilitate startups, fintechs and exports.

The new policy for equity investment abroad will attract foreign direct investment through the establishment of holding companies by Pakistani fintechs and startups; support exports by facilitating exporters to establish subsidiaries or branch offices outside Pakistan; and, allow resident Pakistanis to acquire sweat equity, amongst other changes to the Foreign Exchange (FX) regulations.

It is expected that current changes will help the mutual fund and private equity fund industry to grow by attracting foreign investment in the country. It will also facilitate overseas Pakistanis with Pak Rupee based Roshan Digital Account (RDA) and the non-residents in general to invest in funds in Pakistan.

Furthermore, PBC also welcomes the changes allowing establishment of holding companies abroad and overseas investment by residents within prescribed limits. “Similarly, investment in mutual/PE funds by non-residents will boost inflows and is a welcome change,” it stated.