New mechanism to enable companies to conveniently remit disinvestment proceeds to foreign shareholders

On 27 October 2020, the State Bank of Pakistan introduced a new mechanism to enable companies in Pakistan to conveniently remit disinvestment proceeds to their foreign shareholders. The goal is to make Pakistan a more attractive place for investment by increasing investors’ confidence and support ease of doing business. As per the previous mechanism, a designated bank required prior approval of the State Bank for remittance of disinvestment proceeds above market value, for listed securities and, above breakup value, for unlisted securities. Under the new mechanism, the bank designated by the company has the authority to remit the entire disinvestment proceeds to non-resident shareholders, upon submission of required documents, without referring the case to SBP.

• Type:

  • Treatment and operation (Capital transfer and FOREX)

• Industry:

  • Not industry specific

• Sources:

  • State Bank of Pakistan, SBP introduces a transparent mechanism with complete delegation to banks for remitting disinvestment proceeds to facilitate foreign direct investment, https://www.sbp.org.pk/press/2020/Pr-27-Oct-20.pdf, 27 Oct 2020
  • The News International, Pakistan eases investment exit rules to attract FDI, https://www.thenews.com.pk/print/735694-pakistan-eases-investment-exit-rules-to-attract-fdi, 28 Oct 2020