Government sets $10–15bn private equity goal
Pakistan is preparing a new private equity policy meant to draw $10 to $15 billion in tax-neutral investment from domestic and international investors. Officials say the National Private Equity Framework should be finalised within the next two weeks.
Policy steps would then move through the finance bill for the next fiscal year (FY27-28). Regulatory changes are expected to start as soon as the framework is approved, without waiting for that budget cycle, an official said.
The plan was discussed with Finance Minister Muhammad Aurangzeb at a meeting of the prime minister’s committee on the National Private Equity Framework. Participants reviewed progress on regulation, taxation, domestic capital mobilisation and a pipeline of investable deals.
How the framework is being shaped
Officials said the design draws on approaches used in the United Kingdom, the Middle East and India—markets estimated to have attracted $100–150 billion under similar models. The committee looked at acquisitions, business consolidation, new projects and exits by existing investors as sources of opportunity in Pakistan.
One participant pointed to real estate investment trusts (REITs)—vehicles that pool money into property—as a recent regulatory success. After banks were allowed larger REIT exposures, that portfolio rose from Rs22 billion in 2021 to more than Rs280 billion now. The same participant argued private equity could scale further if rules stay clear and predictable.
The meeting also covered how to channel money held by banks, insurance companies, mutual funds, pension schemes and development finance institutions, as well as local corporations and family offices, into private equity funds and commercially viable projects.
Regulatory and tax steps under review
The State Bank of Pakistan (SBP)—the country’s central bank—briefed the committee on a recent change: banks may now invest up to 20 percent of a single private equity fund, up from 10 percent.
On tax, officials reviewed proposals to treat private equity funds as pass-through vehicles, meaning the fund itself would not be taxed as a company and tax would fall at the investor level. Aurangzeb asked for a close look at international tax models adapted to Pakistan’s rules, and warned that any design must block tax arbitrage and unintended distortions.
The committee stressed coordination among regulators and tax authorities so different investment vehicles are treated consistently. Informed sources said foreign funds, especially from friendly countries, often ask for a clear policy with rules-based entry and exit before committing capital in minerals, real estate, agriculture, oil and gas, tourism or manufacturing.
Aurangzeb praised work across the main workstreams and said reforms must turn into practical deals. He put domestic savings mobilisation first, arguing a credible local market would later help attract foreign institutions and co-investment. He also linked a stronger private equity ecosystem to deeper capital markets, longer-term risk capital and private-sector-led growth over the next five to 10 years.
Aasan alfaaz mein
Sarkar private equity ke liye naya policy framework bana rahi hai, jismein $10 se $15 billion investment ka hadaf hai. Do hafton mein yeh framework final hone ka imkan hai, aur banks ab ek fund mein 20 percent tak paisa laga sakti hain. Pehle desi savings aur institutions ko is market mein lana hai, phir bahar ke investors. Agar yeh kaam achhi tarah chala to businesses ko lamba capital mil sakta hai, jo baad mein jobs aur growth se juda ho sakta hai.
