The State Bank of Pakistan (SBP) has introduced a new mechanism to enable companies in Pakistan to
conveniently remit out disinvestment proceeds to their foreign shareholders. The goal of this initiative is
to make Pakistan a more attractive place for investment by increasing investors’ confidence and support
ease of doing business. The new mechanism also incorporates feedback received from investors and other
stakeholders.
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. This requirement presented numerous constraints for investors.
Under the new mechanism, the bank designated by the company has been delegated the authority to
remit the entire disinvestment proceeds to non-resident shareholders, upon submission of required
documents, by following a convenient mechanism without referring the case to SBP. The number of
required documents would be in accordance with the size of the transaction.
This initiative of State Bank will increase the investors’ confidence and would facilitate the local
companies in particular the start-ups to attract more foreign investment for their businesses. The
circular issued to banks announcing these measures can be accessed at the following link:
https://www.sbp.org.pk/epd/2020/FEC5.htm
