All
Authorized Dealers
In Foreign Exchange,
Dear
Sirs,
PAYMENT
OF ROYALTY AND TECHNICAL
FEE
TO NON-RESIDENTS
Attention
of Aut1horised Dealers is invited to the instructions
contained in F.S. Circular No. 55 dated the 17th
July, 1984 concerning payment of royalty &
technical fee to the non-residents in accordance with
the standard terms prescribed for transfer of‑technology
agreements.
2.
The Government of Pakistan has further liberalized
its Industrial Policy by, interalia abolishing the ceilings
on the ,payment of royalty‑ and technical fee copy
of' the revised Guidelines for agreements for transfer
of technology is enclosed, All agreements conforming
to the standard terms of the Guidelines executed by the
industrial undertakings in the private sector with the
foreign firms 'will be registered by State Bank,, Remittances
of royalty and technical fees will be effected under the
registered agreements by the designated banks without
the approval of the State Bank of Pakistan,
3.
To this end the following procedure will be followed
i)
The local company will designate any of the
Authorised Dealer through whom payments under the
agreements will be made
ii)
The original agreement alongwith four copies thereof
will
be submitted by the company to State bank of Pakistan,
exchange Control Department (Investment Division)
Central Directorates Karachi through the designated bank
for registration within 30 days from the date of
agreement, no original agreement will be returned to the
designated bank duly registered the same conforms to the
standard terms.
4.
As regards royalty/technical fee agreements made
by the industrial undertakings in the public sector with
the foreign firms the same will continue to be approved
by the Ministry of Industries/Investment Promotion Bureau.
A copy of the agreement approved by the Government will
be furnished to the State Bank through the designated
Bank for
record. The designated banks 'will effect remittances
under the agreement approved by the Government
5.
accordingly
para 10 (a), Chapter XIV of Exchange Control Manual (Sixth
Edition) is amended
as under:-
“10
(a) Remittances,
of royalty/technical
fee may
be allowed by the Authorised
Dealer, designated. For the purpose, without the
prior approval of the State, Bank under the agreements
registered with, State Bank of Pakistan/approved
by the Government of Pakistan as the case may be
subject to the following
i)
The applicant Company must be incorporated and operating
in Pakistan.
ii)
Application for remittances of royalty technical
fee is submitted
by the Company concerned in the prescribed form (Appendix
V-52) induplicate alongwith a Photostat copy of the relative
sanction given by the State Bank/Investment Promotion
Bureau as the case may be.
iii)
The correctness of the information furnished
in the
application Appendix V-52) must be certified by the
auditors of the Company in the space provided for the
.
purpose ,And additional statement showing the calculation
of
royalty/technical fee and the change of royalty/technical
fee
and the change is equity of the foreign beneficiary held
in the
Pakistani Company if an, duly certified by the auditors
should
also be enclosed with the application.”