Why are Pakistan’s freelancers still treated like outsiders?

Walk through any co-working space in Lahore, Karachi, or Faisalabad and you will meet a new kind of exporter. There is no container, no port and no shipping line; just a laptop, a stable internet connection and a client in another time zone. Pakistan’s freelancers are quietly becoming one of the country’s most dependable sources of foreign exchange.

The numbers are hard to ignore. The Pakistan Software Export Board says freelancers contributed more than USD 1.1 billion to a record USD 4.6 billion in IT and IT-enabled services exports in FY2025-26. The momentum has carried into the new year as freelancers earned a record USD 197 million in export receipts in September 2026, the highest monthly figure in the country’s history.

Yet the official picture is still incomplete. The numbers the State Bank records have historically been lower than the totals cited by PSEB, and analysts have long pointed to how earnings are routed and reported. Many freelancers have understandably preferred informal arrangements, such as personal accounts abroad, hundi channels or payment platforms that make withdrawal cumbersome. The reasons are practical: fear of tax notices, paperwork they do not understand, and conversion rates that look worse at the bank counter than on the street.

Policymakers seem to have noticed. The SBP scrapped Form R for IT exports up to a threshold and raised the reporting threshold to USD 25,000. Separately, reforms allow freelancers to keep up to 50 percent of earnings in foreign currency, alongside a 0.25 percent tax rate locked until 2029. These are sensible steps, because a freelancer who earns USD 800 a month does not want to fill in the same forms as a large exporter.

Still, a few gaps remain. First, banks need to treat freelancers as customers rather than suspects. Account opening, proof of income and Proceeds Realisation Certificates should be simple and quick, ideally done through an app. Second, the tax promise must hold. A rate fixed until 2029 is only reassuring if nobody tweaks it in the next budget. Third, freelancers who want to grow into small agencies need access to credit, and banks rarely lend against future online invoices.

There is also a quieter risk: talent drain. Pakistan’s best freelancers can easily relocate, and some already operate through companies registered abroad. If the domestic environment feels hostile, the earnings will follow the people.

The upside of getting this right is large. The government has set a target of USD 10 billion in annual IT exports by FY29 under its Uraan Pakistan plan. That goal will not be reached by large software houses alone, since individual freelancers and micro-teams are a big part of the pipeline.

For the finance sector, the message is simple. A freelancer is not a small, risky customer. In dollar terms, a freelancer is an exporter with excellent margins and almost no import bill. Banks and regulators that recognise this early will earn loyalty and deposits. Those that wait will keep reading about record freelance earnings that never touched their balance sheets.

Copyright Business Recorder, 2026