KARACHI: The State Bank has authorised banks to register and transfer shares by local companies to non-residents — a move to facilitate foreign investments in the country.

The bank issued a circular on Monday to explain to all authorised dealers (ADs) the process of designation and registration of shares/units in accordance with the Foreign Exchange Manual.

“In order to promote ease of doing business and facilitate foreign investors, it has been decided to delegate the functions of registration of shares/units on repatriable basis issued/transferred by local companies/funds to non-residents and designation of ADs for the purpose of remittance of dividend and disinvestment proceeds to non-resident shareholders/unit holders to ADs,” said the circular.

Furthermore, paperwork for registration of shares/units on repatriable basis has been simplified, it added.

State Bank simplifies paperwork for registration of shares

In order to provide guidance to ADs regarding the above-mentioned delegated functions and ensure consistency across the industry, Standard Operating Procedures (SOPs) have been developed and made part of the revised instructions.

“In order to allow ADs adequate time to put in place the required institutional arrangements, these instructions shall be effective one month after issuance of this circular,” said the central bank.

Through another circular issued the same day, the State Bank spelt out details about the implementation of non-resident shareholding registration system.

“In pursuance of its strategic goal to enhance efficiency and effectiveness of the financial system, the State Bank has developed Non-Resident Shareholding Registration System (NSRS) to streamline and automate the record keeping of registration of non-residents’ shareholding in locally incorporated companies, and subsequent repatriation of dividend/disinvestment proceeds,” said the circular.

Reporting mechanism

The said reporting mechanism contains four Data File Structures (DFS) mentioned below, each of which offers a different functionality related to foreign inward investment and subsequent repatriation transactions carried out by ADs: designation of bank; shares issuance; shares dividend repatriation and shares disinvestment.

“The ADs are required to report, on a monthly basis, all designation and share registration transactions undertaken by them and all dividend and disinvestment transactions carried out by them through the respective DFS, latest by the fifth working day of the following month through Data Acquisition Portal (DAP),” the circular said.

The first such reporting is to be carried out for the month of July this year by Aug 5, it added. With regard to reporting for legacy data about dividend and disinvestment transactions carried out by ADs, it will be done by ADs in three phases.

Phase I: From Jan 1, 2021, to June 30, 2026: within four months of the issuance of Monday’s circular; phase II: from Jan 1, 2016, to Dec 31, 2020: within six months of the issuance of this circular; and phase III: from Jan 1, 2006 to Dec 31, 2015: within one year.

After conclusion of the third phase, the authorised dealers will have to submit a compliance report within 15 days.

Published in Dawn, May 26th, 2026