Generated from the document text · 19 Aug 2026
SECP issued Private Equity and Venture Capital Fund Regulations 2008 to create a regulatory framework for PE&VC Funds in Pakistan. The funds are structured as unlisted closed-end unit-trust schemes open to high-net worth individuals and institutional investors, with a minimum fund size of Rs 250 million, minimum 5 investors each subscribing minimum Rs 10 million via private placement. Fund Management Companies must be NBFC-licensed with Rs 30 million paid-up capital. The Finance Act 2008 provided significant fiscal incentives including tax-free status for funds until 2014 and reduced capital gains tax rate of 10% on sale of assets to PE&VC Funds. Foreign funds may register with SECP to access tax advantages.
Key questions answered
What are the minimum capital requirements for establishing a PE&VC Fund in Pakistan?
The Fund Management Company must be an NBFC licensed by SECP with a paid-up capital of Rs 30 million. The minimum fund size is Rs 250 million with at least 5 investors, each subscribing a minimum of Rs 10 million.
What tax incentives were provided to PE&VC Funds under these regulations?
The Finance Act 2008 granted tax-free status for the fund until 2014. Additionally, a reduced capital gains tax rate of 10% applies (versus 35%) on sale of assets and shares of a private company to a PE&VC Fund.
Who can invest in PE&VC Funds and how are they structured?
PE&VC Funds are unlisted closed-end unit-trust funds open only to high-net worth individuals and institutions. Investment can only be raised through private placement and the fund is not permitted to list on any exchange.
What is the maximum life of a PE&VC Fund and what investment activities are permitted?
The fund has a maximum fixed life of fifteen years. The fund may provide equity for seed/start-up capital, expansion, buyout, and turn-around of private companies, and may also participate in privatization deals.
How are foreign PE&VC Funds treated under these regulations?
Foreign PE&VC Funds established outside Pakistan may register with SECP to access the same tax advantages as local funds. Foreign funds not raising money locally face minimal regulation, while those raising money locally are subject to the same regulatory requirements as domestic funds.
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