Web Desk: Securities regulator SECP has moved to establish a dedicated legal framework for venture capital, seeking to expand funding options for startups and attract more domestic and international investment.
The Securities and Exchange Commission of Pakistan (SECP) has shared a draft Venture Capital (VC) Bill with the Board of Investment (BoI) for public consultation, the commission said Monday.
The proposed legislation aims to widen access to risk capital, encourage investment in emerging businesses, generate employment and support broader economic growth.
The SECP said the proposed law was developed under a federal government initiative that called for a standalone regulatory framework governing venture capital activity.
Pakistan’s startup, technology and innovation sectors have significant growth potential but continue to face limited access to formal venture capital, according to the regulator.
Much of the investment activity is currently structured through offshore arrangements or operates outside the country’s domestic regulatory framework, the SECP said.
The proposed legislation seeks to bring more of that activity within Pakistan through what the regulator described as a straightforward and transparent system for venture capital funds and fund managers.
Under the proposed framework, venture capital firms would face simplified licensing and registration requirements alongside streamlined operational structures.
At the same time, the bill would establish clearer governance and reporting requirements aimed at improving transparency while protecting investors.
SECP Chairman Dr Kabir Ahmed Sidhu said the legislation was designed to encourage private investment in Pakistan’s emerging businesses without imposing unnecessary regulatory hurdles.
“The bill recognises the high-risk and innovation-driven nature of venture capital,” Sidhu said, according to the SECP statement, adding that the framework seeks to lower regulatory barriers while maintaining effective governance and investor protection.
The SECP and BoI will now consult a broad group of stakeholders before the draft moves into the formal legislative process.
The consultations are expected to include startup representatives, venture capital fund managers, legal and financial professionals, the State Bank of Pakistan, the Pakistan Stock Exchange and relevant industry associations.
The government hopes the proposed framework will help formalise venture capital activity, channel more private capital into high-growth companies and strengthen Pakistan’s wider startup ecosystem.
If enacted, the law could provide startups with a more structured domestic route to raise capital while giving investors clearer rules for participating in Pakistan’s emerging technology and innovation sectors.
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