Foreign exchange company offers currency exchange and international payments to companies and private individuals. A Foreign Exchange Company has the legal right to exchange one currency for another. In Pakistan, subject to below mentioned conditions, the exchange Companies are authorized to deal with foreign currency notes, coins, postal notes, money orders, bank drafts, travellers’ cheques, transfers and other businesses as allowed by State Bank of Pakistan.

A non-banking foreign exchange company also called a foreign exchange broker or in short a forex broker is a company that offers currency exchange and international payments to private individuals and organisations. The term is typically used for currency exchange companies that offer physical delivery rather than speculative trading. i.e., there is a physical delivery of currency to a bank account. Foreign exchange companies are normally distinct from money transfer companies or remittance companies and they usually perform high-value transfers unlike their money transfer counterparts that focus on high-volume or low-value transfers generally by economic migrants back to their home country or to provide cash for travellers. Transactions can either be spot transactions or forward transactions.

In Pakistan, the Relevant Legislation/Rules for Foreign Exchange Companies are as follows:

  • Foreign Exchange Regulation Act, 1947;
  • The regulations of State Bank of Pakistan; and
  • The Companies Act, 2017


The State Bank of Pakistan is the only authority that can provide NOC for a company to deal in foreign currency notes, coins, postal notes, money orders, bank drafts, travellers cheques and transfers.

The first step is that the Proposed Exchange Company should obtain the name availability certificate from Securities & Exchange Commission of Pakistan (SECP).

Once the name availability certificate is obtained, an application will be made for the Grant of NOC on the prescribed form (Annexure-2) along with the payment to the State Bank of Pakistan.

A non-refundable application processing fee of Rs. One Million (Rs 1,000,000) will be charged by State Bank. The pay order / bank draft for this amount must be accompanied along with the application.

The decision of all completed applications will be intimated within one month from the date of submission of such application.

After receiving NOC from the State Bank, the applicant will submit an application to the Securities and Exchange Commission of Pakistan (SECP) for incorporation under the Companies Act, 2017.

Once the Exchange Company is registered by SECP under the Companies Act 2017, the applicant would apply to the State Bank for issuance of license for commencement of operations.

The State Bank after going through the application, made in accordance with the regulations can grant or refuse to grant the license. If there is a refusal, the State Bank would assign reasons for such rejection. However, issuance of the license can be restricted once the limit has been reached, which will be at the mere discretion of State Bank.

The license of the Exchange Company cannot be transferred to any other entity of whatsoever nature, through any means.


The license will be issued initially for a period of three years (3). Once the initial period of three years is expired then the License can be renewed up to five years from the date of expiry of the initial licence. The request for renewal must reach State Bank at least sixty days before expiry of the license along with relevant deposit / payment receipt of Rs. 500,000/- issued by the bank, as evidence of having paid the applicable fee.



The Exchange Company must not include the word “Bank”, “Financial Institution”, “Investment / Commercial / Finance / Real Estate” or any other description that indicates activities other than exchange business.


Minimum authorized and paid-up capital the Company is Rs. 200 million.

The Minimum Capital Requirement is calculated as under:

Minimum Capital Requirement = Paid-up Capital less Accumulated Losses

Exchange Companies must ensure to meet their respective minimum capital requirements at all times.

Exchange Companies are allowed to have foreign participation in their equity up to a maximum of 50%. State Bank would permit repatriation of profits in proportion up to the extent of foreign equity.

The affairs of the company should only run with the declared capital of the company. Neither the shareholders and Directors of the company shall withdraw funds from the company as loan nor shall they extend loan (subordinated loan) to the company unless specific approval, in writing, from State Bank has been obtained.


A SLR with 25% of the capital should be maintained in the State Bank as unencumbered approved government securities. State Bank would extend current account and SGLA facilities to Exchange Companies.


A Prior approval of State Bank regarding enhancement of authorized and paid-up capital by the existing Directors/shareholders will not be required. The Exchange Company may directly approach Securities & Exchange Commission of Pakistan (SECP) for fulfilment of applicable formalities to increase its authorized or paid-up capital.


A prior approval of State Bank will be mandatory for any change in the significant parameter including but not limited to:

  • Memorandum & Articles of the Company
  • Directorship
  • Shareholding
  • Statutory Auditors
  • Chief Executive Officer
  • Locations of Head Office / Outlets


The Foreign Exchange company can develop the standard policies related to Internal Controls, Audit, Human Resources, Information Technology, (AML/ CFT/ CPF) Policy etc.


A non-refundable processing fee of:

New outlet at the time of proposal of Annual Network Expansion Plan (ANEP) = Rs. 50,000

Substitution of location of an outlet = Rs.25,000

Relocation of each outlet = Rs. 25,000

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