How to invoice foreign clients from Pakistan

To invoice a foreign client from Pakistan, agree the price, currency and payment terms in writing first, then send a numbered invoice in that currency with your full bank details for an international transfer. The money arrives through a Pakistani bank, which converts it or credits your foreign currency account, and income tax is collected at source on the proceeds. Your job is to make each of those steps easy to match to the one before it.

Before the first invoice: agree the terms

Most payment problems with clients abroad start before any invoice exists. A short written agreement, even an email the client replies to, settles the questions that otherwise turn up as a dispute two months later.

• The currency. Price in the currency you will be paid in, usually USD, GBP or EUR, so the invoice and the transfer show the same figure.
• The basis: a fixed fee, a monthly retainer, or an hourly or daily rate with a cap.
• Payment terms, such as 14 or 30 days from the invoice date, and whether a deposit is due before work starts.
• Who pays the transfer charges. Ask the client to send the payment with all sender charges paid (often shown as OUR on a SWIFT form), or agree that you absorb them and price accordingly.
• The legal name and billing address of the client's company, and any purchase order number their finance team needs on the invoice.

If the scope is not fixed yet, send a quotation first. When the client accepts it, the invoice can quote the same reference and the same figures, which is what a finance team abroad looks for before it releases money.

What the invoice itself needs

An invoice to a client abroad is an ordinary commercial invoice with three differences: it is in a foreign currency, it shows no Pakistani sales tax, and its bank block has to work for an international transfer. Include the following.

• Your name or business name exactly as your bank account holds it, your address, and your NTN
• The client's legal name and address, and their purchase order or contract reference
• A unique invoice number from an unbroken sequence, the issue date and the due date
• Line items that name the work and the period, for example 'Mobile app development, 1 to 30 September 2026'
• The currency code beside every total, so USD 3,000.00 can never be read as rupees
• A clear statement that no sales tax is charged because the service is exported
• Bank details: account title, IBAN, SWIFT or BIC code, bank name and branch address

Sales tax on services in Pakistan is a provincial matter, collected by the SRB, PRA, KPRA or BRA depending on where you are. Exported services are generally zero rated, but if you are registered with one of those authorities, confirm with them how an export should be shown on your return.

A worked example

A developer in Lahore, registered with the Pakistan Software Export Board, bills a company in London for one month of work.

Income tax on export proceeds

Income from exporting services is taxed under section 154A of the Income Tax Ordinance 2001, and the tax is collected at source when the foreign exchange comes in. FBR's current withholding rate card gives two rates for these proceeds: a lower one for software, IT and IT enabled services by people registered with the Pakistan Software Export Board, and a higher one for every other export of services.

Export of services under section 154A: 0.25% for computer software, IT services or IT enabled services by persons registered with the Pakistan Software Export Board, and 1% in any other case, for export proceeds from tax year 2024 up to tax year 2029. FBR, Withholding Income Tax Rate Card, updated to 30 June 2026

Two things follow for the invoice. First, never add this tax to the client's total: it is your tax, taken from what you receive. Second, the rate depends on your registration, so if you do IT work and are not yet registered with the PSEB, find out whether you qualify before your next large payment. Whether the tax collected is your final liability or can be adjusted against your return depends on your circumstances, so confirm that with a tax adviser rather than assuming either way.

How the money reaches you

A direct bank transfer to your own Pakistani account is the cleanest route, because the bank records the payment as an export receipt under a purpose code. The State Bank of Pakistan asks banks to tag your account with the kind of service you provide, based on a one-time declaration, so you are not asked to explain every payment again.

• Your bank must process an inward export receipt within one working day of receiving the funds.
• IT companies and freelancers no longer have to submit Form R to the bank for their export receipts.
• If one payment is for a different kind of service from the one tagged on your account, tell the bank, so it is reported under the right purpose code.

Revised instructions for IT companies and freelancers: processing of inward export receipts within one working day, purpose codes tagged from a one-time declaration, and no Form R for export receipts. State Bank of Pakistan, EPD Circular Letter No. 06 of 2026, Annex

If a client insists on paying through a platform or a payment service instead, the invoice still matters: put the platform's payment reference on it once the money arrives, so your records show which transfer settled which invoice.

Keeping part of it in dollars

You can keep part of your export earnings in foreign currency in an Exporters' Special Foreign Currency Account (ESFCA), instead of having all of it converted to rupees on arrival. The limit is set by the State Bank, and banks have to credit the permitted amount to the ESFCA unless you ask them in writing not to.

IT companies and freelancers may retain USD 5,000 (or equivalent) per month or 50% of the export proceeds, whichever is higher, in their ESFCAs, and authorised dealers must credit the permissible amounts. State Bank of Pakistan, EPD Circular Letter No. 06 of 2026, Annex

In the example above, the USD 3,000 payment is below the USD 5,000 monthly figure, so the whole amount could stay in dollars. In a month where USD 12,000 arrives, half is USD 6,000, which is more than USD 5,000, so 6,000 could stay. Ask your bank how it applies the limit when several payments land in one month.

The paper trail to keep

Each payment should be traceable from the agreement to the bank statement without guesswork. Keep these together for every client:

1. The agreement or accepted quotation, with the currency and payment terms
2. Each invoice, numbered in sequence, including any you cancelled with a credit note
3. The bank's advice or certificate for each inward payment, showing the amount received and the tax collected
4. The statement line from your PKR account or ESFCA that matches it
5. Any note that explains a difference, such as a deduction by an intermediary bank

Invoicora keeps your invoices and quotations in your own browser, on your own device. Nothing is uploaded and no account is needed, so the sequence of numbers stays in your hands.

When you are ready to bill, open the Pakistan export invoice generator: it is set up for a foreign currency, a zero rated total and the bank details an international transfer needs. If the price is still being agreed, start with a quotation, and if a client asks for the total written out in words, the amount in words tool does that in dollars or rupees.