Pakistan's federal government intends to launch a national private equity framework in the next two weeks, targeting between $10 billion and $15 billion of domestic and foreign investment, Dawn reported. The draft policy seeks to expand long-term risk capital and create a more predictable investment climate.
The proposal was examined at a recent meeting of the Prime Minister's Committee on the National Private Equity Framework, chaired by Finance Minister Muhammad Aurangzeb. Using examples from the United Kingdom, the Middle East and India, the plan aims to tighten rules on investments, fund management and investor exits.
Officials said regulatory changes would be implemented as soon as the framework is finalised, while suggested tax provisions would be placed in the Finance Bill for fiscal year 2027-28. The committee also looked at ways to draw money from banks, insurance firms, mutual funds, pension schemes, development finance institutions, corporations and family offices.
The State Bank of Pakistan briefed attendees on regulatory proposals, including raising the maximum bank exposure in a single private-equity fund from 10% to 20%. The session also reviewed the growth of real estate investment trusts, whose portfolio rose from Rs22 billion in 2021 to over Rs280 billion after regulatory adjustments.
Regarding tax, the committee mulled treating private-equity funds as pass-through vehicles, so taxes would fall on investors rather than the fund itself. Aurangzeb instructed officials to study global tax models and ensure incentives promote real investment without opening doors to tax avoidance or regulatory gaps.
The government has placed priority on mobilising domestic institutional capital to build a credible private-equity market before courting more foreign investors. The framework is also expected to generate opportunities through acquisitions, business consolidation, new projects and exits by current investors over the next five to ten years.
