Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 16
February 17, 1992 

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.

(MUHAMMAD ISHAUQE)
Senior Deputy Director
       
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