Pakistan Plans New Venture Capital Framework to Boost Tech Startup Investment

Pakistan is moving to create new investment opportunities for startups and technology companies as the Securities and Exchange Commission of Pakistan (SECP) advances a proposed venture capital law to improve access to funding.

The SECP has sent the draft Venture Capital Bill to the Board of Investment (BOI) for public consultation, with the proposed legislation designed to attract both local and foreign capital into Pakistan’s startup and technology ecosystem.

The initiative is intended to address one of the key challenges facing emerging businesses in the country, which includes limited access to formal venture capital.

Despite growing activity in technology, innovation, and digital services, many Pakistani startups and high-growth companies continue to rely on overseas investors or financing structures outside the domestic regulatory system.

The federal government had earlier directed the SECP and BOI to jointly develop a regulatory framework that could make it easier for startups and fast-growing technology companies to raise capital.

Under the proposed law, venture capital funds and fund managers would benefit from a simpler regulatory structure, including easier licensing and registration, streamlined operational requirements, and clearer governance and reporting standards.

The SECP expects the framework to bring more venture capital activity into Pakistan’s formal financial system while reducing regulatory barriers that may discourage investors from backing early-stage and high-growth companies.

SECP Chairman Dr. Kabir Ahmed Sidhu said the proposed law is designed to help channel private capital toward emerging businesses and innovation-driven companies.

He said the framework accounts for the higher-risk nature of venture capital investment while seeking to maintain effective governance and investor protection.

For Pakistan’s technology sector, the proposed legislation could provide new financing opportunities for companies operating in areas such as software, fintech, e-commerce, artificial intelligence, and other digital services.

Greater access to venture capital could also help startups scale operations, expand into new markets, and create new employment opportunities, while reducing dependence on traditional bank financing.

The government also hopes the framework will make Pakistan more attractive to foreign investors seeking opportunities in the country’s growing digital economy.

In the next phase, the SECP and BOI will consult with startups, fund managers, legal and financial experts, the State Bank of Pakistan, the Pakistan Stock Exchange, and relevant industry and business organizations.

Following the consultation process, the draft bill is expected to be refined before being sent to the federal government for the formal legislative process.

If implemented, the proposed venture capital law could play an important role in strengthening Pakistan’s startup ecosystem by creating a more structured path for private investment into technology and high-growth businesses.

Also read:

SECP Approves Pakistan’s First Digital Lending Product Exclusively for Women-Led MSMEs