Tuesday, June 25, 2024

SBP has Allowed Pakistanis to Invest in India by First Seeking Permission from the Central Bank

The State Bank has allowed Pakistanis to make equity investments in India, but prior to doing so, investors must first get permission from the central bank.

Now, the bank has made it easier to make investments in countries that allow the repatriation of capital and income to Pakistan. Hopes are that profits can be repatriated when Pakistanis invest abroad to make their subsidiaries.

Startups, fintech and export companies have been permitted by the changes in the law. It is important that the records of individuals or organizations must be clean in order to create an investor or office abroad.

On behalf of export-oriented firms, State Bank has allowed banks to remit funds abroad, up to 10 percent of their average annual export earnings over the last three calendar years, or $100,000 whichever is higher.

From the second year onwards, banks were permitted to remit $30,000 to meet the annual budgeted expenses of a representative office founded or acquired abroad with an annual increase of 10 percent in expenses, subject to valid reason.

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