Pakistan proposes new Venture Capital Bill to regulate startup funding

The Securities and Exchange Commission of Pakistan (SECP) has introduced a draft Venture Capital Bill to establish a dedicated regulatory framework for the country’s venture capital industry. The proposed legislation aims to improve access to risk capital for startups and high-growth technology companies, addressing a current gap where much investment activity occurs through offshore or unregulated structures.

The draft Bill, which is currently under consultation with the Board of Investment, proposes a light-touch regulatory approach to licensing and registration to reduce barriers for fund managers. It seeks to provide clearer rules for fund operations, governance, and reporting to build trust between investors and emerging businesses.

Under the proposed Venture Capital Act, 2026, strict penalties are envisioned for unlicensed venture capital activities. Entities operating without required registration could face fines of up to Rs. 100 million, and responsible individuals could face up to three years of imprisonment.