How to open a foreign currency account in Pakistan?

For people and companies involved in international trade, regular overseas transactions, or looking to diversify their investment portfolio, opening a foreign currency account in Pakistan is an essential first step. We will guide you through the process of creating a foreign currency account in Pakistan in this extensive tutorial, including the prerequisites, advantages, and crucial factors.

Foreign Currency Accounts in Pakistan

The State Bank of Pakistan (SBP) has approved foreign currency accounts, or FCAs, which are offered by approved Pakistani banks. These accounts make it simpler for people and companies to participate in overseas markets, conduct international trade, and manage foreign exchange risks by facilitating transactions in foreign currencies.

Advantages of Creating a Foreign Currency Account

Prior to exploring the procedures for opening a foreign currency account, it’s critical to comprehend the benefits of owning one:

1. Diversification of currencies

You can diversify and lessen your exposure to changes in the value of the Pakistani Rupee (PKR) by holding numerous foreign currencies in foreign currency accounts.

2. Global Commerce

FCAs streamline international transactions for companies that deal internationally, making it simpler to pay suppliers and accept payments in other currencies.

3. Possibilities for Investment

Foreign currency accounts allow investors to take advantage of international investment opportunities, such as foreign exchange markets, equities, and bonds.

4. Protecting Against Changes in Exchange Rates

FCAs reduce currency risk by acting as a natural buffer against unfavorable changes in exchange rates.

5. Simple Entry into International Markets

A foreign currency account makes it simple to access foreign markets, invest in foreign assets, and buy goods and services from overseas.

How to Open a Pakistani Foreign Exchange Account

Let’s now go over how to open a foreign exchange account in Pakistan:

1. Select a Bank That Is Authorized

Choosing a Pakistani bank that is permitted to provide foreign currency accounts is the first step. You can check the status of these banks on the State Bank of Pakistan’s official website, which keeps a list of them.

2. Speak with the Bank

To obtain the required application forms and instructions, go to the bank’s closest branch or visit their website. As an alternative, you can get information about how to open an account by getting in touch with the bank’s customer support.

3. Compile the necessary paperwork

You must submit a number of documents to create a foreign exchange account with the following details:

a. Application for Account

Fill out the application for an account that the bank has provided. Important details regarding the account holder and the kind of foreign exchange account you want to open are gathered by this form.

b. A passport or CNIC

For individual account holders, provide a copy of your valid passport or Computerized National Identity Card (CNIC). Companies will be required to submit registration paperwork, including the Certificate of Incorporation.

c. Evidence of Income

Depending on their source of income, people must present documentation of their earnings, such as pay stubs, tax returns, or a company income statement.

d. Funding Source

Indicate the account’s funding source, which may include export revenue, foreign remittances, profits from overseas jobs, or any additional acceptable foreign exchange source.

e. Address Verification

A utility bill or any other official document proving your current address should be presented. Companies will be required to provide their registered office address.

f. NTN Certificate

Businesses and individuals should provide their National Tax Number (NTN) certificate if appropriate.

g. Additional Documentation Needed

Additional documentation can be needed, depending on the particular needs of the bank and the kind of foreign currency account you’re opening.

4. Finish the KYC procedure

To guarantee adherence to anti-money laundering (AML) and counter-terrorism financing (CTF) laws, the bank will conduct a Know Your Customer (KYC) verification procedure. Photographs, biometric verification, and other KYC-related paperwork can be required.

5. Choose the Type of Account

Select the kind of foreign monetary account that meets your requirements. Typical account types consist of:

• For those who want to save in foreign currencies, a foreign currency savings account is the best option.
• Foreign Currency Current Account: Ideal for companies and people that often transact internationally.
• Residents of Pakistan who earn money abroad can open a resident foreign currency account.

6. The First Payment

To open the foreign currency account, make the first deposit that the bank requires. Each bank may have a different minimum deposit amount.

7. Put your signature on the Account Agreement

Examine and sign the bank’s foreign exchange account agreement carefully. The terms and conditions of the account are described in this agreement.

8. Activation of Accounts

The bank will process your application after receiving the required paperwork, the first deposit and activate your foreign exchange account. 

Final Thoughts

A significant financial instrument, opening a foreign currency account in Pakistan with a renowned Bank such as JS Bank has many advantages, including simpler international trade and investment opportunities as well as currency diversification. You can effectively open and manage a foreign currency account that meets your personal or professional needs by following the instructions in this article and keeping up with regulatory regulations.