All
Authorised Dealers
in Foreign Exchange,
Dear
Sirs,
INVESTMENT
POLICY 1997
Government
of Pakistan have allowed foreign investment on reportable
basis in Services / Infrastructure, Social and Agriculture
Sectors subject to certain conditions as spell out in the
Investment Policy – 1997. Permission is hereby given
to all those companies, which may be set up under this policy,
to issue shares to those foreign investors who make investment
in foreign exchange after the companies have obtained 'Entitlement
Certificate' from the State Bank of Pakistan. The 'Entitlement
Certificate' will be issued on submission of the following
to the Joint Director, Investment Division, Foreign Exchange
Department, State Bank of Pakistan, Central Directorate,
Karachi through a designated Authorized Dealer:-
1)
Encashment Certificate (EC) and / or Proceeds Realization
Certificate (PRC) from an Authorized Dealer in original
showing the amount of foreign currency received and its
rupee equivalent paid to the company. Where the whole or
part of the foreign equity is desired to be retained in
Special Foreign Currency Account for the purpose of import
of plant and machinery for the project, permission for such
retention would be given by the State Bank on the basis
of the Financing Plan of the company and the 'Entitlement
Certificate' will be issued after the foreign equity contribution
has been credited to the foreign currency account of the
company.
2)
Memorandum & Articles of Association and Certificate
of Incorporation.
3)
An attested copy of Board of Investment's Registration Letter
alongwith confirmation of the company that all required
formalities / approvals have since been completed / obtained.
4)
Particulars of sponsor shareholders with name, address,
nationality, proposed number and fare value of shares to
be issued.
Once the shares have been issued to the non-residents on
reportable basis, the share certificates can be exported
and remittance of dividend and dis-investment proceeds will
be permissible in accordance with the procedure laid down
in the Foreign Exchange Manual. In the case of investment
in the agriculture sector / reclamation and cultivation
of land, however, where transfer / sale of land leased by
the Government requires specific permission of the Federal
and concerned Provincial Government, the permission for
remittance of dis-investment proceeds will be given on specific
basis on submission of the permission given by the Federal
/ concerned Provincial Government.
Authorized Dealers are requested to advise their clients
of the above instructions and add the following as paragraph
6A in Chapter XX of Foreign Exchange Manual:-
"Issue
of shares by companies incorporated in Services / Infrastructure,
Social and Agriculture Sectors, to 'persons resident outside
Pakistan' on reportable basis against payment in foreign
exchange, provided the conditions prescribed in the Government's
current Investment Policy have been fulfilled and an 'Entitlement
Certificate' issued by the State Bank".