The State Bank of Pakistan (SBP) has permitted foreign currency and rupee accounts to be opened by corporate entities established abroad with a majority shareholding of non-resident Pakistanis (NRPs).
To assist businesses incorporated abroad with a majority shareholding of NRPs, the central bank has decided to introduce two distinct categories of foreign currency and Pak rupee accounts, namely Foreign Currency Business Value Account (FCBVA) and Non-Resident Rupee Business Value Account (NRBVA), it was announced in a circular on Tuesday.
According to the SBP, banks may open NRBVAs for foreign-incorporated or -registered legal entities that are the majority (51 percent or more) owned and/or controlled by non-resident Pakistanis (NRPs) and/or POC holders.
The entities may be corporations, partnerships with restricted liability, foundations, organizations, trusts, Waqfs, or other similar legal structures. However, it was clarified that unregistered partnerships and sole proprietorships would not be included.
According to the circular, “Banks or the authorized dealers (ADs) may permit operations in NRBVA through electronic channels in addition to conventional modes in practice.”
If the authorized account operators so request, ADs may also issue chequebooks. “ADs shall devise a mechanism, in accordance with applicable regulations, to digitally reactivate the account in the event that these accounts become dormant as a result of non-operation,” it was noted.
The owners of NRBVA could receive money transfers through banking channels. Additionally, they are able to transfer money from their own bank’s foreign exchange business value account.
Remittances from abroad received through banking channels, transfers from its own NRBVA held in rupee with the same banks, and profit, mark-up, return, or proceeds of sale or maturity of permitted investments can all be used to credit the foreign currency business value account.