SBP Extends Facility Allowing Freelancers to Keep 35% of Export Earnings in FCY Accounts

SBP Extends Facility Allowing Freelancers to Keep 35% of Export Earnings in FCY Accounts

Karachi, June 7, 2023 – The State Bank of Pakistan (SBP) has announced an extension of the facility that allows freelancers in the Information Technology (IT) sector to retain 35% of their export earnings in their foreign currency (FCY) accounts.

This decision aims to further incentivize and support IT freelancers in the country.

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The facility was initially granted on January 13, 2023, with a validity period until March 31, 2023. However, the SBP has extended this facility until June 30, 2024, as part of its ongoing efforts to promote the export of IT services.

The SBP emphasized the importance of the IT sector and its contributions to the country’s economy. By allowing freelancers to retain a significant portion of their export earnings in foreign currency accounts, the SBP aims to encourage the repatriation of foreign exchange earnings and promote economic growth.

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To benefit from this facility, freelancers are required to be registered with either the Pakistan Software Export Board (PSEB) or the Pakistan Software Houses Association (P@SHA). Additionally, they should be engaged in the export of Software, Information Technology (IT) services, or IT Enabled Services (ITeS).

Under the previous circular issued by the SBP, banks were instructed to credit 35% of the export proceeds into the exporters’ special foreign currency accounts. The SBP stated that these instructions would be reviewed based on the IT sector’s export performance and the realization of export proceeds during this period.

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The SBP further directed banks to assist exporters in opening their exporters’ special foreign currency accounts and facilitate remittance transactions from these accounts. This includes providing corporate debit cards and digital platforms such as an FX digital portal. Banks were also advised to train their staff to ensure seamless facilitation of IT-based exporters and freelancers, establishing dedicated help desks and lead coordinators within their branches.

To enhance transparency and accessibility, the SBP has instructed banks to publish the names and contact details of the lead coordinators and designated officers on their websites promptly.

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The extension of this facility by the SBP demonstrates the government’s commitment to supporting the IT sector and encouraging freelancers to bring their foreign exchange earnings into the country. It is expected that this measure will provide a boost to the IT industry, promote economic growth, and strengthen Pakistan’s position in the global IT market.

The SBP’s continued efforts to create an enabling environment for freelancers and exporters in the IT sector underline the importance of this industry as a significant contributor to the country’s economy.