Pakistan is actively working to improve its investment climate. Recently, the Cabinet Committee on Regulatory Reforms (CCoRR) held its 16th meeting. During this session, the committee reviewed the country’s regulatory framework governing Venture Capital (VC). Specifically, the government wants to facilitate investment and improve the overall ease of doing business. Furthermore, the authorities aim to create a highly conducive environment for the local venture capital industry to grow rapidly. Therefore, the CCoRR tasked the Securities and Exchange Commission of Pakistan (SECP) and Special Investment Facilitation Council (SIFC) to revise the Venture Capital Bill.
Identifying Major Industry Roadblocks
The CCoRR thoroughly examined the draft Venture Capital Bill. SECP originally prepared this draft following earlier directives. During the meeting, the committee focused heavily on resolving regulatory and operational challenges. They want to explore effective reforms that will encourage participation from both domestic and international investors.
Consequently, the committee identified three key areas requiring immediate attention. First, the industry faces severe regulatory uncertainty and heavy compliance burdens tied to the existing licensing framework. Second, high taxation rates currently plague the sector, specifically double taxation at both the fund and investor levels. Finally, strict foreign exchange repatriation requirements actively discourage international venture capital managers and global investors from operating within Pakistan.
SIFC & SECP to Revise the Venture Capital Bill
The committee fully recognizes the urgent need for a facilitative regulatory framework. Therefore, the CCoRR officially directed SIFC and SECP to jointly undertake a detailed review of the draft Venture Capital Bill.
These two bodies will actively conduct consultations with private-sector representatives and key industry stakeholders. By doing so, they will incorporate practical, real-world considerations into the legislation. Ultimately, they plan to develop a much more investment-friendly legislative framework. Afterward, the authorities will present the revised draft Bill before the next CCoRR meeting for further review. This initiative clearly reflects the committee’s focus on addressing regulatory bottlenecks through coordinated institutional efforts.
Tracking Broader Regulatory Reforms
Beyond venture capital, the CCoRR also reviewed the progress of its broader regulatory reform agenda. This massive agenda currently covers seven previously endorsed reform packages. The committee strongly emphasized the absolute importance of timely implementation.
As a result, it directed the SIFC to engage and sensitize all relevant regulatory authorities regarding their outstanding reform commitments. Most importantly, the SIFC must ensure that these authorities implement all remaining reforms within their strictly prescribed timelines.
