All Authorized Dealers
In Foreign Exchange,

Dear Sirs,

Enquiries have been received regarding the rate of exchange to be applied for determining the value of shares to be issued to foreign sponsors in cases other than the one mentioned in sub-Para (a) of paragraph 7, Chapter XX of the Foreign Exchange Manual. The following clarifications are issued:-

1. In case the foreign sponsor remits his contribution towards equity to Pakistan for credit to the company’s Rupee account, shares may be issued for the rupee equivalent paid by the Authorized Dealer.

2. In case the equity of foreign sponsors is paid into a foreign currency account of the company maintained either in Pakistan or abroad with the State Bank of Pakistan or abroad with the State Bank of Pakistan’s approval, shares can be issued as soon as the amount is paid, applying Authorized Dealers’ TT Clean buying rate for public on the date on which the amount is credited to the company’s account.

3. In case of foreign sponsors’ contribution in the shape of plant and machinery shares may be issued after the exchange entitlement certificate has been obtained, which will be issued on submission of import documents viz. Bills of Entry, Invoices, Import Licenses etc. in original through Authorized Dealer. (The rate of exchange applicable in such cases is the average of Authorized Dealers’ TT Clean Buying and Selling Rate for public prevailing on the date(s) of filing of Bill (s) of Entry (for Bond) with the Customs)