SECP proposes new VC law to unlock startup funding

August 26, 2026 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has shared the draft Venture Capital (VC) Bill with the Board of Investment (BOI) for public consultation, proposing a dedicated legal and regulatory framework aimed at expanding access to risk capital for startups and high-growth businesses.

The proposed legislation seeks to attract domestic and foreign investment, support the growth of startups, create employment opportunities and contribute to broader economic development.

The Bill has been prepared under a Federal Government initiative that tasked the SECP with developing a bespoke, standalone regulatory framework for the venture capital industry and improving access to funding for startups and emerging businesses.

Despite the strong potential of Pakistan's startup, technology and innovation sectors, businesses in these areas have faced limited access to formal venture capital, with a significant portion of investment activity taking place through offshore or unregulated structures outside the domestic regulatory framework.

The proposed VC Bill aims to address this gap by introducing a simple and transparent framework for venture capital funds and fund managers.

It provides for a light-touch licensing and registration regime, simplified operational structures, and clear governance and reporting requirements, while facilitating the formal development of venture capital activity in Pakistan.

SECP Chairman Dr. Kabir Ahmed Sidhu highlighted the importance of the proposed legislation in mobilising private capital towards Pakistan's emerging businesses.

“The Bill recognises the high-risk and innovation-driven nature of venture capital and seeks to reduce regulatory barriers while ensuring effective governance and investor protection,” he noted.

Under the next phase, the SECP and BOI will conduct public consultations with key stakeholders, including startups, venture capital fund managers, legal and financial experts, the State Bank of Pakistan, Pakistan Stock Exchange and relevant industry associations, before the draft Bill proceeds through the legislative process.

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