KARACHI: State Bank of Pakistan (SBP) has allowed banks to release a maximum amount of $200,000 per year as payment for digital services provided by foreign companies.
The central bank on Thursday issued a new mechanism for payments to globally recognized digital service provider companies against acquisition of digital services by local companies for ease of doing business in the country.
The SBP amended Foreign Exchange Manual and allowed general permission to banks to release foreign exchange up to a maximum of USD 200,000/-, or equivalent in other currencies, per year, for each company/ firm/ sole proprietorship incorporated/ established in Pakistan on account of commercial payments, pertaining to digital services, in favor of digital service provider companies.
The release of payment is limited to foreign companies listed by the SBP, which are included:
4. Alibaba Group
13. Digital Ocean
30. LinkedIn Corporation
34. Microsoft Corporation
36. Oracle Corporation
38. Pipe Drive
40. Intuit/ QuickBooks
41. Red Hat/ OpenShift
44. SAP SE / SAP
47. Slack Technologies/Slack
62. Zoom/ Video Communications
The SBP said that the ultimate beneficiary of remittances should only be the company (including their affiliates or associated entities).
However, up to a maximum amount of USD 25,000/-, out of the total annual limit of USD 200,000/-, can be remitted to those digital service provider companies which are not listed in the Appendix V 147, against acquisition of digital services.
The remittances should only be made by an Authorized Dealer designated by the remitter for this purpose under acknowledgement to Foreign Exchange Operations Department (FEOD) SBP-BSC. No Authorized dealer will remit funds under this general permission unless it has been acknowledged as designated Authorized Dealer by the FEOD SBP-BSC.
The SBP said that the banks will ensure that it has satisfied itself with the genuineness and bonafides of the applicant, through appropriate CDD and customer risk profiling, specifically in light of AML/CFT regulations.