SECP Launches Public Consultation on Draft Venture Capital Bill: What Accountants Must Know
The Securities and Exchange Commission of Pakistan (SECP) has sent the draft Venture Capital Bill to the Board of Investment (BoI) for consultation. Announced on 24 August 2026, this development marks a significant step in formalising Pakistan's venture capital ecosystem—and creates fresh compliance and accounting obligations for practising accountants advising fund managers, startups, and investors.
The Problem: Limited Formal VC Access
Formal access to venture capital remains limited for startups and technology companies in Pakistan, restricting their ability to secure investment needed for growth.
Much of the investment involving Pakistani start-ups is currently structured offshore or outside the country's formal regulatory framework. This has meant that significant venture capital activity has escaped the Pakistani tax and regulatory net, depriving the government of tax revenue and accountants of opportunities to advise domestic VC structures.
The Proposed Solution: Light-Touch Regulation with Clear Governance
The Bill provides for light-touch licensing and registration, simplified operational structures, and clear governance and reporting standards, while facilitating the formalization of venture capital activity in Pakistan.
The Bill has been prepared under a Federal Government initiative that tasked SECP to develop a bespoke, standalone regulatory framework for venture capital and improve funding access for start-ups and high-growth businesses.
Key design principles include simplified licensing for VC funds, clear governance standards, and dedicated reporting requirements—all areas where accountants will play a central role in implementation.
Tax Treatment: Pass-Through Taxation Now in Place
An important context: Venture capital funds will now benefit from pass-through taxation, with income and gains flowing directly to investors without being taxed at the fund level first, reducing double taxation and making local funds more competitive and attractive to both domestic and foreign limited partners. This provision, already introduced in the Finance Bill 2026, removes a major tax barrier to domestic fund formation and makes venture capital fund accounting and tax compliance an area where accountants must now have specific expertise.
What Comes Next: Consultation and Legislative Action
The SECP and BOI will now consult startups, fund managers, and legal and financial experts. The State Bank of Pakistan, Pakistan Stock Exchange, and business groups will also take part. After the consultation process, the draft bill will be sent to the federal government, and it will then move forward for further legislative action.
Implications for Accountants
For AOPA members, this move signals three key challenges and opportunities:
- New specialisation in fund accounting: Fund-level accounting will require compliance with SECP's rules on financial reporting, investor statements, and valuation methodologies.
- Startup client advising: Accountants advising tech startups and founders will need to understand the new VC fund structures and the pass-through taxation framework.
- Tax and governance consulting: As offshore VC structures move onshore, accountants will be called upon to advise on tax-efficient fund domicile, investor reporting, and regulatory compliance.
Practitioners should now review the draft bill when released for public comment and consider upskilling in VC fund accounting standards and the interaction between SECP's new regulatory framework and FBR's pass-through tax rules.