Authorised Dealers will maintain company-wise record of remittances allowed by them on the above account so as to facilitate inspection by the State Bank's Inspection teams.

11. Technical Services and Consultancy Agreements and Engagement of Foreign Technicians.

(i) Foreign experts / technicians may be employed by the local firms in private sector without requiring approval by any Government agency for rendering such technical services as supervision of installation, commissioning of plant and training of personnel.

(ii) Authorised Dealers may accordingly allow remittances for engagement of foreign experts / technicians to foreign firms or establish letters of credit available for payment of such charges on production of beneficiary's service invoices / bills duly certified by the employers in Pakistan. While reporting to the State Bank the remittances effected under this facility in the monthly foreign exchange returns, the Authorised Dealers will attach the following documents with relative form 'M':

(a) Copy of the service agreement entered into with the foreign firms.

(b) Beneficiary's service invoices / bills duly certified by the employers in Pakistan.

(iii) It will be the exclusive responsibility of the Authorised Dealers to ensure that income tax has been correctly deducted from the amount payable to the foreign beneficiaries and paid to the income tax authorities or exemption certificate from the income tax authorities is called and recorded with the Authorised Dealers.

(iv) Engagement of foreign nationals in the private sector for regular work in Pakistan will be subject to prior approval of the Investment Promotion Bureau, Government of Pakistan.

12. Remittance of Profits by Foreign Banks.

(a) Applications from branches of foreign banks operating in Pakistan for remittance of profits to their Head Office abroad should be made to the State Bank on form 'M' duly supported by the following information / documents:

(i) Audited Balance Sheet and Profit & Loss Account of the branch in Pakistan.

(ii) Tax Provision made during the year for the (a) current year and (b) for the prior years alongwith its computation.

(iii) A certificate from the auditors in Pakistan that tax provision made in the accounts is sufficient to meet all tax liabilities in Pakistan, or copies of final assessment orders and forms duly certified by the Income Tax Department.

(iv) Assessment orders for the previous years, if not submitted earlier to State Bank.

(v) Certificate from the auditors showing the liability for staff gratuity as at the close of accounts and provision made thereagainst. If no provision has been made, reasons thereof.

(vi) Details of other / miscellaneous income.

(vii) Amount charged / claimed on account of Head Office expenses for the current year (if not separately shown in the accounts) and the basis of its calculation alongwith Head Office expenses claimed / allowed by the Income Tax Authorities for the preceding 3 years.

(viii) Provision made in the current year for bad and doubtful debts.

(ix) Confirmation to the effect that the amount provided for bad and doubtful debts is not less than the amount required to be provided on the basis of latest Report of the Banking Inspection Department.

(x) Itemwise details of un-realized / accrued income credited to Profit & Loss Account for the year and in the previous year.

(xi) Itemwise details of un-realized / accrued income of the previous years realized in the current year.

(b) Applications for remittance of net remittable profits by the branches of foreign companies operating in Pakistan to their Head Offices abroad should be submitted on form 'M' supported by the following information / documents:

(i) Audited Balance Sheet and Profit & Loss Account of the branch in Pakistan.

(ii) Audited Consolidated Balance Sheet and Profit & Loss Account of the Head Office. If they are not available at the time of making the applications they should be submitted subsequently.

(iii) Reconciliation of the Head Office Accounts.

(iv) Tax provision made during the year for the (i) current year and (ii) prior years along with its computation.

(v) A certificate from the auditors in Pakistan that tax provision in the accounts is sufficient to meet all tax liabilities in Pakistan or copies of final assessment orders and forms duly certified by the Income-Tax Department.

(vi) Assessment orders for the previous years, if not submitted earlier.

(vii) Certificate from the auditors showing the liability for staff gratuity as at the close of accounts and provision thereagainst. If no provision has been made, reasons thereof.

(viii) Details of other / miscellaneous income.

(ix) Amount charged / claimed on account of Head Office expenses for the current year (if not separately shown in the accounts) and the basis of its calculation alongwith Head Office expenses claimed / allowed by the Income-Tax Authorities for the preceding 3 years.

(x) Full particulars of additions, if any, made to fixed assets in Pakistan, during the period and the source of funds utilized for financing such additions.

(xi) The extent to which the proposed remittance will require bank finance.

(xii) In case the applicant is applying for the first time, documentary evidence to the satisfaction of the State Bank that the applicant firm was in existence and conducting business operations in Pakistan prior to 3rd October, 1963. In respect of those branches of foreign firms and companies which were established in Pakistan on or after 3rd October, 1963, original or photo copy of the letter of the Investment Promotion Bureau, Government of Pakistan, granting them permission to conduct business operations in Pakistan, should be submitted with the application alongwith other documents.

(c) A company other than a bank, insurance company, airline and shipping company desiring to avail of the facility of making remittance of profit without prior approval of State Bank, may approach the Senior Deputy Director (Investment Division), Exchange Control Department, State Bank of Pakistan, Central Directorate, Karachi disclosing the name of its banker through whom it would like to make remittance. The State Bank will authorise the bank concerned to effect remittance of profit to the Head Office abroad of the company subject to verification of the remittable amount in the manner to be prescribed by it. While reporting such remittances the designated Authorised Dealers will enclose all the relevant documents with the relative form 'M'.

13. Payment of Dividend to Non-Resident Shareholders.

(a) Authorised Dealers may allow remittance of dividends to non-resident shareholders without the prior approval of the State Bank. For this purpose each company will designate an Authorised Dealer through whom it proposes to remit dividends to its non-resident shareholders. No Authorised Dealer will effect remittance of dividends under this authority unless it has been authorised by the State Bank to do so in respect of a particular company.

(b) Each company which wants to avail of the facility of making remittance of dividends without the prior approval of the State Bank, should advise the Senior Deputy Director (Investment Division), Exchange Control Department, State Bank of Pakistan, Karachi the name of its bankers through whom it would like to make remittance. On receipt of nomination of a bank from the company, the State Bank will authorise the bank concerned to effect remittance of dividends, whether interim or final, to the non-resident shareholders of the company without its prior approval.

(c) Before allowing remittance of dividends, Authorised Dealer must ensure:

(i) that the shares held by the non-residents (other than Indian nationals) under the specific and / or general permission of the State Bank and are registered at their foreign addresses.

(ii) that the shares in question were not acquired by the non-residents on the basis of their undertaking that they will not claim remittance of dividend and

(iii) that the application for remittance of dividend is net of Pakistan tax liability. Authorised Dealers must also ensure that the auditor's certificate to this effect on the application is from a well-known firm of auditors.

(d) The following documents must be seen by the designated Authorised Dealer before allowing the remittance of dividends:

(i) Application in triplicate in the prescribed form (Appendix V-59) duly certified by the Company's auditors. There will be one consolidated application in respect of dividends due to all the non-resident shareholders.

Where the companies/auditors have not accepted the entitlement in respect of some shareholders, the application may be certified with their reservation and entitlement of others released pending reconciliation. Entitlement in respect of un-resolved cases may be realeased through a supplementary consolidated application after the matter is finalized.

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Above Paragraph 13(d) Added  via F.E. Circular 7 dated 28th Marchr, 1998

Above Paragraph Updated via F.E. Circular 29 dated 20th November, 1997.

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(ii) Two certified copies of the audited Annual Profit & Loss Account and Balance Sheet of the company concerned for the year to which the dividend application pertains or two copies of interim Profit & Loss Account duly certified by the auditors for the period to which interim dividend relates.

(iii) Certified true copy of the Shareholders / Directors resolution declaring the dividend.

(iv) In case tax exemption is claimed by them / any of the shareholders, a certificate to this effect is invariably produced from the competent tax authorities.

(e) While reporting remittances allowed by them under the above authority in their monthly exchange returns, the Authorised Dealers will enclose with the relative form 'M' a copy of the supporting application (Appendix V-59) together with one copy of audited Annual / Interim Profit and Loss Account and Balance Sheet and certified true copy of the Directors / Shareholders resolution. In cases where shareholders are resident of different countries and remittances are made in different currencies, the remittances will be reported on different  'M' forms under the relative currency statements.

Reference to the relative monthly currency statements should be made in column 10 of the application (Appendix V-59) against remittances made in different currencies and the application alongwith its supporting documents should be attached to any of the 'M' forms. Duplicate copy of the application form will be retained by the Authorised Dealer concerned for its record.

(f) Authorised Dealers have also general permission to allow payment of dividends due to non-residents (other than Indian) holding shares of companies incorporated in Pakistan on non-repatriation basis, by credit to their private non-resident Rupee accounts maintained with them or with other Authorised Dealers. To this end Authorised Dealers making payment of dividends to non-resident shareholders for credit to their non-resident accounts shall complete the prescribed form A-7 (Appendix V-9) and forward the same alongwith the payment instruments to the Authorised Dealer which maintains the non-resident Rupee account for credit to the account of the shareholders. The receiving Authorised Dealer will report the transaction in its monthly exchange return.

(g) Authorised Dealers should maintain separate company-wise record of payment of dividends made to their non-resident shareholders either by remittance or for credit to their non-resident accounts as the case may be, under the above general permission so as to facilitate their inspection by State Bank's Inspection teams.

14. Export of Dividend Warrants.

Dividend warrants of companies incorporated in Pakistan can be freely exported to the non-resident shareholders provided the shares have been issued with the approval of the State Bank and a statement of such non-resident shareholders has been filed with it.

15. (a) Foreign Articles in Pakistani Newspapers and Magazines.

Authorised Dealers may allow remittances at actuals, without prior approval of the State Bank, in respect of articles contributed by non-resident foreigners for publication in Pakistani Newspapers or Magazines provided a demand note from the non-resident contributors is produced by the publishers of the article to the Authorised Dealers while applying for remittance. Advance remittance may also be allowed subject to the applicant's undertaking to submit the requisite documents in due course.

15. (b) Remittance on account of News, Features, News Picture, Syndication Services, Gambles, Comics, Puzzles, Book Reviews etc.

Authorised Dealers may effect remittances, without prior approval of the State Bank, at the request of the publishers of Newspapers and Magazines of repute having large Circulation or by local agents of the foreign beneficiaries in Pakistan on account of News Feature Services, News Picture Services, Syndication Services, Gambles, Comics, Puzzles, Book Reviews etc. published in Pakistan Newspapers and Magazines. While effecting remittances, Authorised Dealers shall ensure the following:

(i) Form 'M' has been duly signed by the applicant.

(ii) A formal letter of request for remittance has been received from the remitting agency in Pakistan.

(iii) The invoices / demand notes etc. of the foreign beneficiaries are produced in original.

15. (c) Remittance of salary / remuneration as well as Telex / Telefax / Telegram / Telephone Charges to the Overseas Correspondents of Pakistani Newspapers.

Authorised Dealers may allow remittances without prior approval of the State Bank, on account of salary / remuneration as well as Telex / Telegram / Telefax / Telephones charges in favour of correspondents of Pakistani newspapers posted abroad on production of original demand notes / bills / vouchers.

16. Advertisements in Newspapers and Magazines abroad.

Exchange facility is available to exporters / non-exporters for publishing advertisements in foreign newspapers and magazines without any upper ceiling. Authorised Dealers may allow remittances as indicated above for advertisement charges payable to newspapers, magazines, etc., abroad without the prior approval of the State Bank on production and examination of the following documents:

(i) Form 'M' signed by the applicant.

(ii) Invoice / Bill etc., of the beneficiary in original.

(iii) Undertaking from the applicant concerned that he will produce relevant clipping from the newspaper / magazine to them for submission to the State Bank within a period not exceeding three months.

While effecting the above remittances, Authorised Dealers will ensure that the newspaper / magazine in which the advertisement is proposed to be inserted is of good standing and repute and remittance is made only in the name of the concerned newspaper / magazine. In cases of doubt, reference should be made to the State Bank before effecting the remittance.

17. Bank Charges and Sundries.

Authorised Dealers may, without prior approval of the State Bank, effect remittances to their foreign correspondents etc., to cover payments due to them on account of bank charges, cost of cables and other incidental charges arising in the normal course of authorised business other than imports. All such remittances should be reported to the State Bank on form 'M'. In cases where bank charges relating to exports are paid by the Authorised Dealers to their foreign correspondents by deduction from the amount of the export bills they should report the full amount of the export bill as "Purchase" and simultaneously report the deductions as "Sale".

18. Purchase of Tender Forms from abroad.

Authorised Dealers may allow remittances on account of fees for tender forms payable to Government / Semi-Government agencies or a private company or a firm abroad without the prior approval of the State Bank on receipt and examination of the following documents:

(i) Form 'M' duly filled in and signed by the applicant.

(ii) Newspaper cutting / Pakistan / Foreign Embassy's letter or other supporting documents evidencing floatation of tenders and the cost of tender documents.

19. (a) Registration of Patents, Trade Marks in Foreign Countries.

Authorised Dealers may allow remittances covering fees etc., for In registration of patents, trade marks in foreign countries by firms / companies etc., in Pakistan without prior approval of the State Bank on receipt and examination of the following documents:

(i) Form 'M' duly signed by the applicant.

(ii) Debit Notes of the patent attorney / solicitors etc., for the fees for registration of patent / trade mark.

(iii) Undertaking from the remitter to produce within one month from the date of remittance evidence to the effect that the patent / trade mark has been registered abroad.

It will be the responsibility of Authorised Dealers to ensure that the requisite evidence for registration of patent / trade mark is produced to them within the stipulated period.

19. (b) Registration of Exporters of Pharmaceutical products in Foreign Countries.

Authorised Dealers may allow remittances of registration fees by exporters of pharmaceutical products in Pakistan for their registration with the Ministry of Health of a foreign country without the prior approval of the State Bank on production of the following documents:

(i) Form 'M' duly signed by the applicant.

(ii) Evidence from the Ministry of Health of the foreign country concerned demanding payment of registration fee.

(iii) Undertaking from the remitter to produce within 1 1/2 month from the date of remittance, evidence to the effect that the applicant has been registered with the Ministry of Health of the foreign country concerned.

20. Reporting of Remittances.

While reporting remittances to the State Bank allowed by them under paras 17, 18, 19 and 20 in their monthly exchange returns, Authorised Dealers will bunch the  'M' forms under each category separately alongwith the supporting documents on the basis of which remittances have been effected by them. The bunch of form 'M' with the relative documents must have a covering statement in duplicate as per proforma given below:

Covering statement in respect of remittances allowed during the month of .............................. on account of ............................

(State purpose)