What regulatory approvals are needed for a private equity investment in Pakistan and how long do they take?

Question

I'm considering a PE bid for a mid-sized Pakistani company. What approvals are required from SECP, SBP, and FBR, and what are typical timelines and costs? Do foreign investment limits or local partner requirements affect the deal?

Dawood Associates Law Firm · Accepted Answer

There are three types of requirements for private equity investment in Pakistan:

1. SECP Regulations:
- Private Fund Regulation, 2015: requirements and procedures
- Investor eligibility
- Registration procedures in the shape of a Non-Banking Financial Company (NBFC)
- Option of a local partner (added or not)
- Governance and all types of reporting procedures
- Sector-wise restrictions
- Fees

2. Foreign Exchange (State Bank of Pakistan) Requirements:
- Foreign Exchange Law applies
- Open a Special Convertible Rupee Account
- No minimum or maximum investment requirements
- No restriction for investors to return the investment including dividends and profits

3. FBR Requirements:
- Mandatory registration of the company with all corporate and taxation compliances
- Withholding taxes procedures and taxation on profits and gains

What regulatory approvals are needed for a private equity investment in Pakistan and how long do they take?

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