Foreign Exchange Company Setup Lawyers in Islamabad and Peshawar

The SBP applies a rigorous Fit and Proper Test to all proposed directors, CEOs, and key executives. Candidates must possess a minimum of five years of experience in the financial sector and must not have been convicted of an offense involving moral turpitude or financial fraud. Legally, any person who has been a wilful defaulter of a bank or has been associated with a company whose license was canceled for malpractice is barred from holding a position. NMK Legal assists in compiling the "Affidavit of No Default" and verifying the "Credit Information Bureau" (CIB) reports required to satisfy the SBP licensing criteria.

While Pakistan generally maintains a market-based exchange rate, the Exchange Policy Department of the SBP monitors the "Spread" between the buying and selling rates of exchange companies. Legally, the spread should not exceed the limits prescribed in the SBP circulars (usually 1.0% to 1.5% for major currencies like the USD). Companies are required to display their Buying and Selling Rates on prominent electronic boards at every branch. Manipulation of rates or "hoarding" of foreign currency to create artificial shortages is a violation of the Code of Conduct for Exchange Companies, which can result in the imposition of heavy penalties or "De-listing" from the active exchange network.

A company cannot open a branch without a specific Branch Commencement Certificate from the State Bank of Pakistan. The application must include the proposed "Tenancy Agreement," a layout plan showing a dedicated "Public Counter," and a security clearance report. For companies operating in Peshawar or border regions, the SBP may require additional "Border Security Clearances." Furthermore, the company must prove that it has the Additional Capital for Branches as required by the SBP (often PKR 5 million to 10 million per additional branch). Our lawyers assist in negotiating the commercial leases and ensuring that the physical site meets all security and safety standards before the SBP inspection team arrives.

The voluntary surrender of license is governed by the SBP’s specific exit protocols. A company wishing to close its operations must pass a special resolution in its Board of Directors and apply to the SBP for a "Closure NOC." Before the license is canceled, the company must settle all outstanding liabilities to the public and ensure that its "No Objection" covers all tax filings with the FBR. If the SBP initiates an "Involuntary Liquidation" due to non-compliance, a Liquidator is appointed to sell the assets and distribute the proceeds according to the priority of claims under the Companies Act 2017. NMK Legal manages this delicate winding-up process to ensure that the directors are protected from personal liability.