Pakistan allows all non-residents to operate bank accounts to boost foreign investment

Pakistan has relaxed rules for opening and operating bank accounts by overseas Pakistanis in financial institutions in the country, allowing almost all the non-resident individuals and companies to maintain accounts, according to a State Bank of Pakistan (SBP) notification.

The move is aimed to boost foreign investment and financial inflows in the country as such non-resident Pakistanis are allowed to invest in Naya Pakistan Certificates (NPCs), stocks at Pakistan Stock Exchange (PSX), in government debt securities like T-bills and Pakistan Investment Bonds (PIBs), in real estates, mutual and pension funds, and other investment instruments in the country.

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“In order to facilitate foreign investment in Pakistan, it has been decided to broaden the scope of Foreign Currency Value Account (FCVA), Non-Resident Pakistani Rupee Value Account, Foreign Currency Business Value Account, and Non-Resident Rupee Business Value Account.

“Henceforth, all persons either natural or juridical who fall within the definition of non-resident persons under the Income Tax Ordinance, 2001 (XLIX of 2001), shall be eligible to open, operate and maintain the…accounts with Authorised Dealers [banks] in Pakistan,” the SBP notification read.

Authorised dealers [ADs/banks] may also open FCVA for “a resident individual Pakistani who holds assets abroad, as per the wealth statement declared in latest tax return with Federal Board of Revenue (FBR),” the new regulations say.

The dealers shall allow operations in the account through the digital channels e.g. internet/mobile banking, ATM/debit cards. The ADs may also issue cheque book to the account holder, if required.

The FCBVA can be opened and operated by companies, associations, foundations, limited liability partnerships (LLPs), societies, trusts, waqfs, and/or other similar legal arrangements.

“However, this will not include sole proprietorships or unregistered partnerships.”

Another notification of the central bank says the accounts by all non-resident Pakistanis be opened and maintained through Roshan Digital Account (RDA), through which overseas Pakistanis have injected over $12 billion in the country in the past over five years.

Meanwhile, a separate notification reads, “Eligibility criteria applicable to investors in NPCs has been revised, whereby, non-resident persons, whether natural or juridical, eligible to open, operate and maintain Foreign Currency Value Account, Foreign Currency Business Value Account, Non-Resident Pakistani Rupee Value Account and Non-Resident Business Rupee Value Account shall be eligible to purchase the NPCs of both conventional and shariah compliant variants”.