Pakistan's New Policy to Boost Freelancers and Digital Economy

The Government of Pakistan has recently unveiled a new policy aimed at supporting and promoting freelancers in the country. 

The primary objective is to position Pakistan as a leading global market for freelancers and enhance its foreign exchange earnings.

Under the newly launched "National Freelancing Policy," freelancers registered with the Pakistan Software Export Board (PESB) will benefit from a reduced sales tax rate of up to 2%. Additionally, freelancers with a track record of at least two years of IT export remittances exceeding $5,000 will be granted visa facilitation.

The collaboration between PESB and the State Bank of Pakistan (SBP) aims to streamline the inward foreign exchange remittance process for freelancers. 

The SBP will introduce a defined code specific to freelancing, enabling eligible freelancers to benefit from income tax exemptions.

Moreover, PESB and SBP are working together to facilitate registered freelancers in opening foreign exchange bank accounts.

This offers freelancers a convenient means to manage their foreign exchange earnings effectively.

The National Freelancing Policy is designed to support the growth of the freelance industry and strengthen Pakistan's financial sector through increased foreign exchange inflows. 

The goal is to foster an enabling environment for freelancers, bolster the country's digital economy, and enhance Pakistan's position in the global freelance market.

In an effort to encourage freelancers, the SBP will permit them to retain 35% of their foreign exchange income in associated foreign exchange business accounts. 

Furthermore, PESB, in collaboration with the Federal Board of Revenue (FBR) and the Ministry of Finance (MoF), will ensure tax exemptions for foreign exchange export remittances received under freelancing codes until 2030.

Visa facilitation will also be provided to freelancers who have achieved a minimum of two years of IT and ITeS export remittances exceeding $5,000 annually through formal banking channels. This initiative acknowledges the valuable contributions of freelancers to the IT services sector and simplifies the visa process for them.

The policy also offers registered freelancers various opportunities, such as subsidized home loan schemes, provided they can demonstrate a minimum of five years of freelancing export remittances totaling more than $12,000 annually. 

This new system aims to assist freelancers in securing affordable housing.

Additionally, the policy focuses on expanding access to international markets, projects, and clients, as well as providing growth opportunities for freelancers. 

To achieve this, a comprehensive promotional plan and robust marketing strategy have been developed to showcase the skills and capabilities of Pakistani freelancers on a global scale.

To facilitate the registration process, PESB offers freelancers the opportunity to register for a nominal fee of Rs 1,000, with an annual renewal fee of only Rs 3,500. 

This registration provides access to various PESB programs and initiatives, including free and subsidized training, certifications, and subsidized office space at Software Technology Parks (STPs) across the country. 

It also offers access to international marketing and matchmaking opportunities.

The government's measures aim to create a supportive environment for freelancers in Pakistan by providing them with multiple incentives and resources to thrive in the freelance industry. 

These initiatives will contribute to the growth of Pakistan's digital economy.

Furthermore, in collaboration with other government sectors, PESB facilitates visa processes for freelancers with a proven record of ITeS export remittances exceeding $5,000 annually through formal banking channels. 

Banks have also been urged to establish technology-focused branches in major cities, staffed with technology-aware personnel who can assist freelancers.

As part of the policy, registered freelancers can benefit from an income tax holiday until 2030 on their export income, revenue, or receipts. 

Additionally, PESB plans to establish a dedicated freelance desk where freelancers can seek information and assistance regarding taxation, banking, intellectual property rights (IP), voice-over IP VPN access, and other commercial matters. 

Moreover, PESB, in collaboration with government officials, will explore avenues to provide subsidized life insurance, health insurance, and employee liability insurance to registered freelancers through existing and future initiatives and subsidies.

Pakistan's new policy to support freelancers is set to propel the country's freelance industry and contribute to its digital economy, positioning Pakistan as a prominent player in the global freelance market.