Pakistan to overhaul corporate laws, ease business and save Rs250bn

ISLAMABAD: Pakistan is moving to overhaul its corporate laws in one of the most sweeping reform drives in recent years, a push officials say could save businesses more than Rs250 billion ($880 million) annually by slashing red tape, simplifying company registration and modernizing the Companies Act, 2017.

Pakistan has 252,321 registered companies but only 523 listed, one of the lowest ratios among peer economies, according to an official document available with The News. Officials blame complex registration processes, excessive compliance requirements and processing delays for discouraging firms from joining the formal economy.

The Board of Investment (BoI) said its first reform package—already cleared by the Cabinet Committee on Regulatory Reforms (CCoRR)—recommends 136 changes across ministries and regulators, including scrapping 41 redundant regulations and simplifying 75 others. Reforms focus on digitization, simplification and elimination of redundancies.

Meanwhile, Prime Minister’s Special Assistant on Investment Haroon Akhtar Khan chaired a sub-committee meeting on modernizing the Companies Act, 2017 and simplifying company registration on Friday.

It was attended by regulatory reform expert Scott Jacobs, along with representatives of the Board of Investment (BoI), Securities and Exchange Commission of Pakistan (SECP) and the Overseas Investors Chamber of Commerce (OICC), who reviewed recommendations to remove structural barriers and digitize outdated processes that hinder business growth.

Haroon Akhtar Khan underscored the urgency of reform, saying rigid and outdated laws are discouraging entrepreneurs from formalizing their businesses. “Harsh laws discourage people from registering their companies,” he said, stressing that corporate governance for unlisted firms should be determined by their by-laws and articles of association instead of rigid legal requirements.

The BoI presented proposals to cut redundant regulations, lower compliance thresholds for small and medium-sized firms and encourage innovation in corporate structures. The reforms also aim to improve transparency by expanding online access to company information and enabling digital filings through the Securities and Exchange Commission of Pakistan (SECP).

These reforms are designed not only to save costs but also to unleash the growth potential of Pakistan’s private sector by creating a more business-friendly environment, an official said.

The subcommittee will finalize its proposals in its next session before sending them for government approval, marking one of Pakistan’s most ambitious corporate law overhauls in recent years.