Act as a lawyer of finance and so this is what I want to do I want to open a bank account so that people can pay me in the United States for my freelancing services and I want to use it in Pakistan. How is prove to me that it is illegal to do and prove to me again as a second lawyer that it is absolutely legal.
LAWYER #1: THE “IT’S ILLEGAL” GUY (a.k.a. Mr. Doom-n-Gloom)
Ladies and gentlemen of the imaginary jury,
Let’s be clear: If you’re a Pakistani resident using a U.S.-based bank account to receive freelancing payments and then spend the funds in Pakistan without proper disclosures or compliance with State Bank of Pakistan (SBP) regulations, there are legal risks. Why?
1. Violation of Pakistani Foreign Exchange Regulations:
Under the Foreign Exchange Regulation Act (FERA) in Pakistan, all foreign income must be declared. If you’re bypassing formal remittance channels (like Western Union or bank inward remittance), the SBP may see this as circumventing their monitoring system.
2. Tax Evasion Concerns:
If you earn money abroad but do not declare it as foreign income in your Pakistani tax returns, the Federal Board of Revenue (FBR) might consider it undeclared income. That’s a legal headache no freelancer wants.
3. Money Laundering Laws (FATF compliance):
International laws (especially those followed by U.S. banks) require transparency. If you’re routing funds without proof of services or proper invoicing, it could flag you or your account under AML (Anti-Money Laundering) compliance rules.
In short:
If you use a U.S. bank and spend the money in Pakistan without reporting or registering, you may be violating both U.S. banking laws and Pakistani financial regulations. Now let’s hand it to our optimistic, loophole-loving friend…
⸻
LAWYER #2: THE “IT’S TOTALLY LEGAL” GUY (a.k.a. Captain Chill)
Your Honor,
Let’s inject some reality here. Freelancers all over the world do exactly this every day—legally. Here’s why:
1. It’s Your Money. You Earned It.
If you’re offering services online (say, on Upwork, Fiverr, or your own platform), and your clients in the U.S. pay you into a legal U.S. bank account in your name, there’s nothing inherently illegal about that. You are not stealing. You are not laundering. You’re just being efficient.
2. Pakistan Allows Foreign Currency Accounts (FCAs):
You are allowed to maintain foreign currency accounts. If you report the earnings properly to the FBR and declare the existence of your foreign bank account in your tax documents (under Section 116 of the Income Tax Ordinance), then it’s all above board.
3. You’re Not Smuggling Money—You’re Earning Digitally.
The money you spend in Pakistan isn’t being smuggled in a briefcase. You can remit it officially, use Payoneer, Wise, or a legal debit card. The State Bank doesn’t ban digital workers from holding offshore accounts.
4. IRS & SBP Don’t Care—As Long As You’re Honest.
As long as you are filing taxes in Pakistan and declaring your foreign income, neither the U.S. IRS nor the SBP has a problem. If you’re below the FBAR threshold ($10,000+ in offshore accounts), you don’t even have to tell the IRS unless required. And Pakistani law doesn’t prohibit you from keeping the money abroad.
⸻
Verdict:
It’s not illegal to have a U.S. bank account as a Pakistani freelancer, as long as:
• You declare it in your tax returns in Pakistan.
• You do not hide the income from Pakistani authorities.
• You follow proper remittance procedures if you bring the money into Pakistan.
Act as a lawyer of finance and so this is what I want to do I want to open a bank account so that people can pay me in the United States for my freelancing services and I want to use it in Pakistan. How is prove to me that it is illegal to do and prove to me again as a second lawyer that it is absolutely legal.
LAWYER #1: THE “IT’S ILLEGAL” GUY (a.k.a. Mr. Doom-n-Gloom)
Ladies and gentlemen of the imaginary jury,
Let’s be clear: If you’re a Pakistani resident using a U.S.-based bank account to receive freelancing payments and then spend the funds in Pakistan without proper disclosures or compliance with State Bank of Pakistan (SBP) regulations, there are legal risks. Why?
1. Violation of Pakistani Foreign Exchange Regulations:
Under the Foreign Exchange Regulation Act (FERA) in Pakistan, all foreign income must be declared. If you’re bypassing formal remittance channels (like Western Union or bank inward remittance), the SBP may see this as circumventing their monitoring system.
2. Tax Evasion Concerns:
If you earn money abroad but do not declare it as foreign income in your Pakistani tax returns, the Federal Board of Revenue (FBR) might consider it undeclared income. That’s a legal headache no freelancer wants.
3. Money Laundering Laws (FATF compliance):
International laws (especially those followed by U.S. banks) require transparency. If you’re routing funds without proof of services or proper invoicing, it could flag you or your account under AML (Anti-Money Laundering) compliance rules.
In short:
If you use a U.S. bank and spend the money in Pakistan without reporting or registering, you may be violating both U.S. banking laws and Pakistani financial regulations. Now let’s hand it to our optimistic, loophole-loving friend…
⸻
LAWYER #2: THE “IT’S TOTALLY LEGAL” GUY (a.k.a. Captain Chill)
Your Honor,
Let’s inject some reality here. Freelancers all over the world do exactly this every day—legally. Here’s why:
1. It’s Your Money. You Earned It.
If you’re offering services online (say, on Upwork, Fiverr, or your own platform), and your clients in the U.S. pay you into a legal U.S. bank account in your name, there’s nothing inherently illegal about that. You are not stealing. You are not laundering. You’re just being efficient.
2. Pakistan Allows Foreign Currency Accounts (FCAs):
You are allowed to maintain foreign currency accounts. If you report the earnings properly to the FBR and declare the existence of your foreign bank account in your tax documents (under Section 116 of the Income Tax Ordinance), then it’s all above board.
3. You’re Not Smuggling Money—You’re Earning Digitally.
The money you spend in Pakistan isn’t being smuggled in a briefcase. You can remit it officially, use Payoneer, Wise, or a legal debit card. The State Bank doesn’t ban digital workers from holding offshore accounts.
4. IRS & SBP Don’t Care—As Long As You’re Honest.
As long as you are filing taxes in Pakistan and declaring your foreign income, neither the U.S. IRS nor the SBP has a problem. If you’re below the FBAR threshold ($10,000+ in offshore accounts), you don’t even have to tell the IRS unless required. And Pakistani law doesn’t prohibit you from keeping the money abroad.
⸻
Verdict:
It’s not illegal to have a U.S. bank account as a Pakistani freelancer, as long as:
• You declare it in your tax returns in Pakistan.
• You do not hide the income from Pakistani authorities.
• You follow proper remittance procedures if you bring the money into Pakistan.
