How to pay Chinese suppliers from Pakistan

How to pay a Chinese supplier from Pakistan: the short answer

A Pakistani importer pays a Chinese supplier through its authorized dealer bank. An authorized dealer is a bank licensed by the State Bank of Pakistan (SBP) to handle foreign exchange. The rules sit in Chapter 13 (Imports) of the SBP Foreign Exchange Manual and in circulars that amend it, and every import is recorded on Pakistan Single Window (PSW), the government's online platform for trade declarations to Pakistan Customs.

The usual sequence for an order from China is:

1. Agree the price, the payment terms and the Incoterm with the supplier, and get a proforma invoice. An Incoterm is a standard trade term, such as FOB or CFR, that sets who pays freight and insurance. A proforma invoice is the supplier's priced quotation for the order.
2. Associate your bank with your PSW profile, using the account's IBAN. IBAN is the International Bank Account Number, the standard account number format used by Pakistani banks.
3. Ask the bank to pay the supplier by advance payment, letter of credit, collection or open account. For every mode except open account, the bank sends PSW a financial instrument for the import.
4. When the goods arrive, file the goods declaration on PSW and attach the financial instrument, so customs and the bank can match the goods to the payment.
5. Pay any balance within the deadline for the mode you used, and keep the bank's payment records with the declaration.

The payment itself is a SWIFT transfer from the bank to the supplier's account. SWIFT is the international messaging network banks use for cross-border payments, and each bank has an 8 or 11 character SWIFT code. For the supplier's side, see our guide on how to pay suppliers in China.

SBP rules on paying for imports

Advance payments

EPD Circular Letter No. 01 of 2024, issued on 30 January 2024, revised Paragraph 30 of Chapter 13. Authorized dealers may now make import advance payments without seeking prior SBP approval, against an irrevocable letter of credit or an invoice, of up to 100% of its value. The circular requires appropriate due diligence. As reported by Business Recorder, the bank must also check that the advance matches the customer's profile, the goods and market prices, obtain an undertaking from the importer on the prescribed form, and may ask for collateral or a guarantee. The goods must be imported within 120 days of the advance payment, or 730 days for plant and machinery. If they are not, an interim penalty of 0.1% a day on the outstanding advance applies.

Open account imports

Under FE Circular No. 09 of 2017, a bank may pay for goods imported on open account, where the supplier ships first and the buyer pays later, without the original shipping documents. The bank keeps copies of the bill of lading or airway bill and the proforma and commercial invoices. Payment must be made within six months of the goods declaration (GD) filing date and may not exceed the declared value of the goods imported into Pakistan. The bank checks the GD against the import record before it pays.

Sources: State Bank of Pakistan, EPD Circular Letter No. 01 of 2024 and FE Circular No. 09 of 2017; Business Recorder, 1 February 2024. As published on 29 October 2026. Confirm current rules with your bank.

Financial instruments on PSW

PSW has replaced the Electronic Import Form (EIF) and Electronic Form E with electronic trader profiles and financial instruments (FIs) that banks exchange with PSW in real time. An FI is the bank's electronic record of how an import is being paid for, such as an advance payment or a letter of credit. PSW lists the modes as letter of credit, advance payment, contract or collection, and open account. Open account imports need no FI before the declaration. When you file the GD, the FI must be active, unexpired and in the same payment mode and currency as the declaration. One FI can cover several declarations, and several FIs can cover one declaration.

Paying in US dollars or Chinese yuan

Most Chinese suppliers invoice in US dollars. Pakistan also allows trade with China in yuan. In January 2018 the SBP stated that imports, exports and financing transactions can be denominated in Chinese yuan (CNY), and that the yuan is on par with the US dollar, the euro and the Japanese yen as an approved foreign currency in Pakistan.

The SBP said it had already put the regulatory framework in place, including letters of credit and yuan financing. After signing a currency swap agreement with the People's Bank of China, it allowed banks to accept yuan deposits and extend yuan trade loans, and set up a mechanism for banks to borrow yuan from the SBP to lend to importers and exporters. Industrial and Commercial Bank of China (ICBC) Pakistan was allowed to set up local yuan settlement and clearing, and several Pakistani banks held onshore yuan accounts in China at the time.

Sources: Profit by Pakistan Today, report of the SBP statement of 2 January 2018; Pakistan Single Window, elimination of EIF and EFE. As published on 29 October 2026.

Paying in yuan saves the supplier a conversion, and some suppliers price a yuan order lower for that reason. Your side still converts rupees, so compare the yuan quote at your bank's rate with the dollar quote before you choose.

How the money reaches a Chinese supplier

Many Chinese factories invoice through a Hong Kong trading company with a Hong Kong bank account, and others give a mainland account. The beneficiary on the payment should be the company named on the proforma invoice and the contract.

Routes as described in this guide; payment modes from Pakistan Single Window; supplier-side checks from PNC Bank's summary of China's goods trade foreign exchange rules. As published on 29 October 2026.

What the supplier's bank checks

China manages foreign exchange through the State Administration of Foreign Exchange (SAFE). As summarized by PNC Bank, a Chinese company must be on SAFE's list of companies with goods trade foreign exchange business, and banks cannot handle foreign exchange for companies that are not on it. The supplier's bank checks each receipt for a genuine trade background, using documents such as the contract, invoice and customs declaration. The same summary states that the remitter and the beneficiary must be the parties to the contract. A payment that arrives from someone other than the buyer on the contract can be held while the supplier's bank asks questions.

Deposit, balance and payment terms

Many Chinese factories ask for a deposit when the order is confirmed and the balance before the goods ship, against a copy of the bill of lading. A bill of lading is the document the shipping line issues when it receives the goods. In Pakistan each payment falls under one of the modes your bank records on PSW.

Sources: State Bank of Pakistan, EPD Circular Letter No. 01 of 2024 and FE Circular No. 09 of 2017; Pakistan Single Window; Business Recorder, 1 February 2024. As published on 29 October 2026.

A letter of credit (LC) is a bank's written promise to pay the seller when it presents documents that comply with the credit's terms. It protects you against paying for goods that were never shipped, but it does not check quality. A collection sends the shipping documents through the banks, and you receive them only after you pay or accept a bill of exchange. Advance payment puts the most risk on you: the goods must also arrive within the SBP deadline, or the penalty runs. Book a pre-shipment inspection before releasing the balance on a large order, and diary the 120 day date from the first payment.

What it costs: published bank charges

Pakistani banks publish schedules of charges. The table shows Bank AL Habib's import charges for July to December 2026, as an example of the items to budget for on each order.

Source: Bank AL Habib, Schedule of Bank Charges, 1 July to 31 December 2026, International Banking, Imports. As published on 29 October 2026. Other banks set their own charges.

On a US$40,000 order paid fully in advance in two payments, a 0.17% service charge comes to US$68 in rupees, plus the fixed SWIFT and handling charges on each payment. The costs outside the schedule are the exchange rate at which the bank sells dollars or yuan, correspondent bank charges deducted on the way to China, and the supplier's own bank charge.

Charge codes

Every SWIFT payment carries a charge code. OUR means you pay all transfer fees and the supplier receives the full invoice amount. SHA shares the fees, so intermediary banks can deduct theirs from the amount. BEN puts all fees on the supplier. A payment that arrives short delays shipment while the supplier queries the gap, so agree in the contract who bears bank charges.

Documents that tie the payment to customs

The bank, PSW, Pakistan Customs and the supplier's bank each match the same facts: the supplier's name, the invoice number, the goods and the value. Keep them identical across every document.

Sources: Pakistan Single Window, elimination of EIF and EFE; State Bank of Pakistan, FE Circular No. 09 of 2017; Business Recorder report of EPD Circular Letter No. 01 of 2024. Typical sequence; requirements vary by bank and product. As published on 29 October 2026.

If the goods will not arrive within 120 days of an advance payment, talk to your bank before the date passes, not after. If the supplier changes its bank details, confirm the change by telephone on a number you already hold before the bank sends the payment.

Hawala, agents and crypto: what goes wrong

Some importers pay a Chinese supplier through a hawala or hundi dealer, an agent who collects rupees in Karachi and pays from an account in China, or a crypto trader. Hawala and hundi are informal money transfer systems that settle through a network of dealers rather than through banks. The facts below are what an importer should weigh before using these routes.

• The import has no financial instrument. Customs clears goods against a GD with the bank's FI attached, except on open account, where the bank still pays against the GD. A payment made outside your bank leaves no FI and no bank payment record against the declaration.
• Open account imports must be paid through the bank. FE Circular No. 09 of 2017 requires payment within six months of the GD, has the bank follow up with the importer, and states that regulatory or legal action may be taken against an importer that does not pay in time.
• The supplier's bank may query it. China's rules expect the payer to be the party on the contract. A transfer from an agent's account is a payment from a third party.
• There is no trace. A SWIFT transfer from your bank carries a reference and can be traced through the banks. Cash handed to a dealer cannot.
• Virtual asset services need a PVARA license. On 27 April 2026, as reported by Dawn, the Pakistan Virtual Assets Regulatory Authority (PVARA) said any agreement or pilot that enables virtual asset services for users in Pakistan, including stablecoin transfers for cross-border payments, requires its prior authorization. A USDT transfer to a supplier also creates no FI or bank record for the import.

A note on foreign accounts and Helm

Helm does not currently provide USD account details to companies based in Pakistan. For an importer in Pakistan, the route set out in this guide is through an authorized dealer bank, with the financial instrument and goods declaration on PSW. Pakistani exporters receiving dollars can read how proceeds reach Pakistani banks in our Pakistan exporters guide.

A checklist for paying a Chinese supplier from Pakistan

• Associate your bank with your PSW profile before the first order.
• Get a proforma invoice and check that the seller on it is the company you will pay.
• Choose the payment mode with your bank: advance payment, letter of credit, collection or open account.
• For an advance, give the bank the importer's undertaking and diary the 120 day import deadline, or 730 days for plant and machinery.
• Decide between USD and CNY by comparing both quotes at your bank's rate.
• Agree in the contract who bears bank charges, and use OUR if the supplier must receive the full amount.
• File the GD on PSW with an active financial instrument in the same mode and currency.
• On open account, pay through your bank within six months of the GD and no more than the declared value.
• Keep each SWIFT confirmation with the invoice, bill of lading, FI and GD.

For how importers elsewhere organize supplier payments, see the importers page. Check the supplier bank's SWIFT code with our SWIFT code lookup before the first payment.

Questions

References

1. State Bank of Pakistan: EPD Circular Letter No. 01 of 2024, advance remittances for import of goods
2. Business Recorder: ADs allowed to make import advance payments without prior SBP approval (1 February 2024)
3. State Bank of Pakistan: FE Circular No. 09 of 2017, payment against imports made on open account basis
4. Pakistan Single Window: Elimination of EIF and EFE
5. Profit by Pakistan Today: SBP approves CNY for bilateral trade and investment activities (2 January 2018)
6. Bank AL Habib: Schedule of Bank Charges, July to December 2026
7. Dawn: PVARA says any deals, pilots involving virtual assets require prior authorisation (27 April 2026)
8. PNC Bank: Navigating China's regulations on foreign exchange for goods trade

This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.