Payments against Digital Services Obtained made easier  
Reform ID   F074
 

Reform Description  

 Before:  Procedure for payment to foreign vendors against digital services obtained was lengthy and involved approval from SBP for each transaction above USD 100,000.   

After: Now State Bank has allowed payment up to USD 400,000 to 62 white listed companies without obtaining approval from State Bank. 
Sector   IT & ITeS 
Beneficiaries  Exporters, IT firms, Banking & Financial Services Businesses 
Jurisdiction/Location   Federal (Entire Pakistan) 
Department  SBP 
Date of Implementation   13-08-2020 
Timeline  Last 01 Year  
 

Details 

 Difficulty 
  • The existing SBP’s instructions on Remittances to Digital Service Provider Companies had a limited scope as the limit prescribed for remittance was also on lower side. 
  • This hindered the businesses from transacting business with their foreign counterparts which were not on the list.  
 

Analysis 
  • It was felt that the limit of remittance may be increased and a list of whitelisted companies be published to facilitate businesses.  
 

 

 

 

 

Solution  
  • After consultation with prominent IT exporters, tech startups, venture capital firms etc. limit of remittance to whitelisted companies (62 service provider companies) has been enhanced to USD 400,000 per annum to whom remittances can be made without prior approval of State Bank.  
  • Besides, a sublimit of USD 40,000 – earlier it was USD 25,000 (out of the total annual limit of USD 400,000) was further provided for those digital service provider companies, which are not included in the list of 62 vendors.  
 

Evidence   

 FE Circular No. 04 dated August 13, 2020 (https://www.sbp.org.pk/epd/2020/FEC4.htm)  

FE Circular No. 7 dated August 5, 2021 

https://www.sbp.org.pk/epd/2021/FEC7.htm 

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