Pakistan’s rules on sending money abroad for trading are among the clearest in the region, and they matter for anyone considering a prop firm.

The State Bank’s circular

In EPD Circular Letter No. 08 of 2022, dated 18 March 2022, the State Bank of Pakistan said that remittance of foreign exchange, directly or indirectly, outside Pakistan to overseas foreign exchange trading, margin trading and CFD trading apps, websites and platforms through any payment channel is not allowed, because no permission has been granted under section 5(1) of the Foreign Exchange Regulation Act. It said buying such products by residents of Pakistan is a violation of section 4(1) of the Act, and told banks to stop such payments and to identify and block these platforms on an ongoing basis.

Prop Trading in Pakistan: What Traders Should Know. The State Bank’s circular; The SECP’s warnings; What this means in practice
What this guide covers: 3 key sections at a glance.

The circular does not mention prop firms by name. Whether a prop challenge fee is a payment to a forex trading platform has not been decided publicly, but most prop firms present themselves as forex and CFD trading programmes, and banks are told to block payments to such platforms. Treat the position as restricted, not open.

The SECP’s warnings

The Securities and Exchange Commission of Pakistan has warned the public against unauthorised offshore platforms offering forex and other speculative trading without approval in Pakistan, and says trading in listed securities and commodities can only be done through SECP-licensed brokers. It advises checking a platform’s status on the SECP’s website before depositing money.

Tax

Income received from abroad is reported to the Federal Board of Revenue under the usual rules for residents. Our Pakistan forex tax guide covers the general position; take advice on how payouts would be classified.

What this means in practice

  • Paying an offshore forex-related platform from Pakistan conflicts with the SBP’s circular, whatever the payment channel.
  • Using intermediaries or crypto to get round bank blocks does not change the rule, which covers direct and indirect remittances.
  • Licensed local routes exist for trading listed securities and commodities through SECP-licensed brokers on the PSX and PMEX.

This guide summarises official sources for general information. It is not legal or tax advice; for your own position, speak to a qualified adviser in your country.

Key terms in the circular

TermMeaning
FERAThe Foreign Exchange Regulation Act 1947, which governs foreign exchange dealings in Pakistan
Authorised dealer (AD)A bank or institution allowed by the State Bank to deal in foreign exchange
Section 4(1)Restricts residents from buying or exchanging foreign exchange except through authorised dealers or with SBP permission
Section 5(1)Restricts payments to people outside Pakistan except as the SBP permits
Payment channelAny route used to pay, including cards, transfers and wallets

The circular uses these provisions to say that remittances to offshore forex, margin and CFD trading platforms have no SBP permission, and that banks must stop and block them.

Why prop fees sit in a grey zone that leans one way

A prop firm will argue that its fee buys an evaluation service, not trading. The circular, however, is written broadly: it covers remittances “directly/ indirectly” to forex, margin and CFD trading platforms through “any payment channel”. Most prop firms describe themselves as forex and CFD trading programmes and offer those instruments. That is why we describe paying one from Pakistan as restricted rather than open, and why a bank may decline the payment.

Licensed alternatives in Pakistan

  • Shares on the Pakistan Stock Exchange through an SECP-licensed securities broker.
  • Commodity futures on the Pakistan Mercantile Exchange (PMEX) through an SECP-licensed futures broker.
  • Free demo accounts to practise forex and prop-style rules without any payment abroad.

Our guide to whether forex trading is legal in Pakistan covers the wider position for retail forex.

Scams that target Pakistani traders

The SECP has warned about unauthorised platforms, fake dashboards that show profits until you try to withdraw, and apps impersonating licensed brokers. Prop-style “funded account” offers promoted on social media, especially those asking for payment to a personal account or wallet, fit the same pattern.

Never pay a “funded account” fee to an individual’s account or wallet. Check any platform’s status on the SECP’s website before sending money.

Illustrative example: a blocked payment

A trader in Lahore tries to buy a challenge with a debit card and the payment is declined. A social media contact then offers to pay the fee for them via a wallet transfer. Under the SBP circular, the indirect route is covered too, and the contact has no way to guarantee the account or any payout.

Questions to ask before doing anything

  1. Would this payment be a remittance abroad to a forex, margin or CFD trading platform, directly or indirectly?
  2. Has my bank or an adviser confirmed how it would treat the payment?
  3. Is the platform on any SECP warning, or impersonating a licensed broker?
  4. Am I being asked to pay an individual, a wallet or an agent rather than a company?
  5. Do I understand how I would receive any payout, and how it would be reported to the FBR?

If any answer is uncertain, the safest step is not to pay. Practising prop-style rules on a free demo account costs nothing and involves no payment abroad. Our guide to forex tax in Pakistan covers the reporting side, and prop firm red flags covers the scams that often follow blocked payments.

The position could change if the State Bank or SECP issues new rules or permissions. We will update this guide when they do; until then, read the 2022 circular as the governing statement.

The short version

Pakistan’s central bank says remittances to offshore forex, margin and CFD platforms are not allowed through any channel, and tells banks to block them. Treat prop firm fees as falling under that, use licensed local markets or free demo accounts instead, and avoid anyone offering a way around the rule.

These guides cover the wider regulatory picture and the scams that often follow blocked payments.

Frequently asked

Is prop trading legal in Pakistan?

No Pakistani rule names prop firms, but the State Bank's EPD Circular Letter No. 08 of 2022 says remittances to overseas forex, margin and CFD trading platforms through any payment channel are not allowed, and banks are told to block them.

Can I pay a prop firm from Pakistan?

The SBP circular covers direct and indirect remittances to offshore forex and CFD trading platforms, and most prop firms present themselves as forex and CFD programmes. Treat it as restricted and take advice.

What does the SECP say about online forex platforms?

It has warned against unauthorised offshore platforms offering forex and other speculative trading without approval in Pakistan, and advises checking a platform's status on its website before depositing money.

Are there legal alternatives in Pakistan?

Trading listed securities and commodities through SECP-licensed brokers on the PSX and PMEX is the licensed route.

Why was my card payment to a prop firm declined in Pakistan?

The State Bank's circular tells banks to stop payments to offshore forex, margin and CFD trading platforms through any channel, and most prop firms present themselves as forex and CFD programmes, so banks may block them.

Can I pay a prop firm with crypto from Pakistan?

The SBP circular covers direct and indirect remittances through any payment channel. Using another route does not change the rule; take advice before paying.

What can I trade legally in Pakistan?

Shares on the Pakistan Stock Exchange and commodity futures on PMEX through SECP-licensed brokers are the licensed routes.