State Bank of Pakistan (SBP) has notified revisions in chapter 20 of the Foreign Exchange Manual to facilitate Start-ups, Fintechs and Exports. The new equity investment policy abroad would attract foreign direct investment through the establishment of Pakistani fintech and start-up holding companies; the promotion of exports by encouraging the establishment of subsidiaries or branches outside Pakistan by exporters; and the acquisition of sweat equity by resident Pakistanis, among other amendments to the Foreign Exchange (FX) regulations.
Further reforms to foreign exchange regulations would encourage the country’s portfolio investment through Pak Rupee-based Roshan Digital Account (RDA) and Special Convertible Rupee Account Funds, including mutual funds, exchange traded funds (ETFs) and Real Estate Investment Trust (REIT) funds (SCRA).
Following approval by the Federal Government, SBP introduced three new categories of foreign investment under its updated policy regulating foreign equity investment and allowed banks to allow remittances under newly introduced categories.
Establishment of a holding company abroad by residents to collect capital from abroad: the investment regime in Pakistan is very liberal, allowing complete independence for sales, dividends and capital to be repatriated.
