SBP limit maximum $25,000 for freelancers payment

SBP has raised the payment limit for information technology related freelancers and other services from $5,000 to $25,000/person in a month to encourage business-to-customer transactions via official home remittance channels.

SBP limit maximum $25,000 for freelancers paymentState Bank of Pakistan (SBP) said in a statement that “The enhancement in limit will facilitate freelancers to route greater value of funds through a more economical and efficient channel of home remittances and help in receiving foreign exchange flows through formal banking channels in the country”.

This would also facilitate freelancers to expand their business or operations and engage new freelancers to join the workforce.

SBP added that this move was expected to create employment opportunities and increase foreign exchange earnings in Pakistan. While export of services has been growing in double digits during last year. This enhancement of limits for freelancers will further accelerate growth in export of services in the months ahead”.

SBP had allowed freelancers to receive foreign payments of up to $5,000/individual per month with an aim to receive additional workers’ remittances of at least $1.2 billion per year.

Before that the limit for such foreign payments was capped at $1,500/individual per month for freelancers providing services in computer and information systems and other services to their clients abroad.

There are around 300,000 freelancers working mainly in country’s information technology sector. Despite the increasing size as well as the potential of the industry, receiving payments in the name of services export proceeds and as commercial payments remains cumbersome and complicated.

These hurdles lead to majority of freelancers not to bring the foreign exchange into the country, but spend it overseas. It is estimated that freelance payments worth billions of dollars may still be stuck in foreign bank accounts.