New private equity policy framework on the horizon to bring over $10bn in investments

The government plans to complete a national private equity framework within two weeks, targeting $10 to $15 billion in tax-neutral investment from local and overseas investors, Dawn reported. Regulatory measures are expected to follow finalisation, while some policy changes are slated for the FY27-28 finance bill.

The proposed rules cover fund structures, transparency, investment arrangements and tax treatment. The State Bank of Pakistan told the committee that banks’ permitted investment in a single private equity fund has risen from 10 per cent to 20pc; the meeting also considered treating funds as pass-through vehicles, with tax charged to investors.

Officials cited the expansion of bank exposure to REITs, from Rs22bn in 2021 to more than Rs280bn currently, as an example of regulatory changes supporting investment. The committee also discussed drawing domestic resources from banks, insurers, mutual funds and pension schemes into private equity, alongside measures to provide clear entry and exit rules for foreign investors.