Introduction

The ‘ease of doing business’ is one of the most important factors in determining a country’s economic growth and attractiveness to investment. Having a business friendly country will encourage entrepreneurs to open new businesses, encourage both local and foreign investors to invest within their country, increase innovation, create jobs and improve the overall economy. Countries with clear regulations, efficient government organizations, simple registration processes and dependable legal systems will more commonly attract investment.

Improving the EODB in Pakistan is extremely important due to the issues they face. These include limited foreign investment, limited tax base, large informal economy, complex regulations and difficulty of obtaining finance. Despite having great potential for entrepreneurs and a young population with a growing tech industry, many people have been put off setting up businesses due to the unnecessary administrative and complex regulations.

The SECP (Securities and Exchange Commission of Pakistan) plays a vital role in the corporate regulations. They are the main regulatory body for companies, capital markets, insurance companies and non-banking financial institutions. Their role is to create a transparent, efficient and investor-friendly corporate industry.

They have implemented various reforms to improve the ease of doing business. These include simplifying company registration, digital services, reducing red tape, improving corporate governance, protecting investors and encouraging expansion. They have changed from being a traditional regulatory body to a tech-based corporate facilitator.

Their role goes further than just registering companies. They play an important role in creating a good business environment for entrepreneurs to set up businesses, investors to invest confidently, financial institutions to operate with transparency and businesses to expand.

To understand how much the SECP has contributed to improving the investment climate in Pakistan…

Understanding the Role and Mandate of the SECP

The SECP was set up under the ‘Securities and Exchange Commission Of Pakistan Act, 1997’. It began operating in 1999 and replaced the Corporate Law Authority. It has several duties including:

• Registering and regulating companies
• Regulating the securities market
• Protecting shareholders and investors
• Regulating insurance companies
• Overseeing non-banking financial institutions
• Monitoring corporate governance
• Regulating capital market intermediaries
• Creating transparency

These duties impact the ease of doing business.

Having a good corporate regulator is important to ensure you’re helping businesses while also ensuring people’s interests are protected. Too much regulation can put people off starting businesses however too little can cause fraud, poor financial management and exploitation of investors.

The aim of the SECP is to create a regulatory body which protects stakeholders but doesn’t cause unnecessary administrative costs.

In Pakistan having a good SECP is important as there are many small and medium sized enterprises, start-ups and family run businesses.

1. Simplify Company Registration Processes

One of the most significant ways the SECP has helped improve the ease of doing business is by simplifying the company registration process.

In the past setting up a registered company in Pakistan would be a lengthy process that would involve lots of paperwork, going to various government offices, submitting lots of documents and coordinating with various departments. This would cause companies to spend more time and money setting up.

Many small entrepreneurs found the registration process quite complicated and expensive meaning many businesses remained sole proprietorships or informal.

The SECP recognized this and started offering electronic registration via their eservices.

This allows entrepreneurs to apply for incorporation, reserve company names, provide director/shareholder details and upload statutory documents, all online.

In February 2018 they implemented a key reform by allowing company names to be reserved and incorporated through one online process. This reduces duplication and makes it quicker and easier.

They also introduced fast track registration services (FTRS). This allows applicants to get their eligible applications processed in 4 working hours.

This has reduced the need for paperwork and made it easier to register companies formally.

This helps to encourage entrepreneurs to register their businesses. This will mean they will have a legal identity, open a corporate bank account, enter contracts and have access to institutional finance.

Due to the reduction in barriers to setting up companies, the SECP have helped create a well organized and competitive business environment.

2. Digitization

Digitization has become one of the most important aspects of a modern government. The SECP have been increasingly using technology to improve their services and reduce the need for businesses to physically go to government offices.

They introduced the eservices system. This allows companies to submit statutory forms, annual returns and complete various processes.

From here they introduced their modern eZfile system. This is now the main way companies interact with the corporate regulatory bodies.

This provides a simple, paperless and accessible system. It allows companies to incorporate and complete various processes after incorporation. This includes statutory submissions, changes and applications.

There are many benefits to using digital submissions including:

• Reduced Paperwork: Companies can submit documents electronically reducing printing, transportation and administration costs.
• Time Saving: Many processes can be completed without having to visit the company registration offices.
• Accessibility: Providing online services means entrepreneurs and corporate professionals can access the services outside of normal office hours.
• Increased Transparency: Keeping records electronically and tracking applications makes it easier to monitor progress.
• Cost Saving: Time and resource can be saved by completing processes electronically.

Having an efficient digital regulatory system will improve the quality of data the government have.

The SECP have taken steps to digitize their services which helps to create a modern corporate regulatory system in Pakistan.

3. Integration with Other Government Departments

Alongside registering your business there may be other requirements to meet to get your business up and running. This can include tax, labor, social security and various other statutory approvals.

In the past this would have meant contacting various departments causing duplication, extra paperwork and delays.

To overcome this the SECP have integrated with various government departments. Key integrations include:

• Federal Board of Revenue
• Employees’ Old Age Benefits Institution
• Punjab and Sindh business registration.

This means eligible applicants can provide the necessary information during company incorporation to register with these institutions.

The integration with the FBR is key as newly incorporated companies can obtain their national tax numbers electronically.

Integration with the provincial departments and EOBI will also reduce duplication for businesses.

This supports the idea of a one stop shop for registrations.

This is really important in Pakistan as businesses often have to deal with both federal and provincial regulations. However in the long term this will only be effective if there is more co-operation between government departments, standardized data requirements and consistent application across all provinces.

The SECP have provided a solid foundation to improve the business registration environment.

4. Increased Company Registrations

A key indicator of an improving business environment is increased numbers of entrepreneurs registering companies.

Due to the digital reforms and simple incorporation processes, the SECP have seen a significant increase in company registrations.

As announced in July 2025 the SECP registered over 35,000 companies during FY2025. This is an increase of 27% compared to previous years. There are now over 258,000 companies in the corporate registry with 99.9% of incorporations being done online.

During FY2025-26 they have seen even more success. As announced in July 2026 they registered 43,559 new companies during the financial year. This is a 24% increase compared to previous years. There are now 301,615 registered companies.

This shows that more businesses are using the digital incorporation services.

This is important as:

• Formal businesses will be more likely to keep records of their finances.
• Registered businesses will be able to build better relationships with banks, suppliers, institutional clients and international partners.
• Formalization will improve documentation and help increase the tax base.
• A growing corporate sector will provide a strong foundation for job creation, innovation and private investment.

Whilst the numbers of companies registered isn’t a full indicator of the quality of the business environment it does show more companies are getting involved.

5. Improved Corporate Governance

Ease of doing business isn’t just about reducing the number of processes needed to set up a company. It is about ensuring that businesses can operate with clear and transparent processes.

Investors are more likely to invest if they know their interests will be protected, the information they receive is accurate and the decisions made by management are accountable.

The SECP play a key role in promoting corporate governance in Pakistan.

They have implemented various rules and regulations under the companies act 2017, relevant regulations and listed companies (code of corporate governance) regulations 2019. This includes requirements around corporate management, transparency, accountability and shareholder rights.

This covers:

• Director responsibilities
• Financial and material disclosures
• Financial statements and auditing
• Minority shareholders
• Board composition
• Related party transactions
• Corporate accountability.

Having good corporate governance will reduce the risk of poor financial management, conflict of interest and misuse of company assets.

For foreign investors, particularly institutional investors, having a credible regulatory body is an important factor.

Domestic investors will feel more confident knowing companies must keep transparent records.

The SEC’s regulatory role helps to create a corporate environment where businesses can attract investment based on credibility.

They also encourage companies to have improved management practices.

6. Facilitate Foreign Direct Investment

Foreign Direct Investment provides a great source of capital, technology, jobs and international business opportunities. For developing countries like Pakistan it is vital to attract foreign investment to increase their industrial capabilities, improve productivity and boost economic growth.

However there are many factors foreign investors will look at before entering a market. These include political/economic stability, consistent regulations, tax, investor protection, ease of company setup and ability to repatriate legitimate profits.

The SECP help to improve the investment climate in Pakistan by providing a structured corporate registration and regulatory system.

Foreign individuals/companies can set up businesses in Pakistan, providing they follow relevant laws, sector requirements and approvals. The SECP have introduced electronic incorporation systems to make it easier for foreign promoters to register companies.

They have also introduced multi-language promoters guides in eleven languages. These include Arabic, Chinese, English, Japanese, Spanish, German, Korean, Turkish, Sindhi, Balochi and Pashto. This was introduced in February 2025 to help local and international investors understand what is required for incorporation.

The SEC’s regulatory role will also help foreign investors understand what their rights, responsibilities and obligations are.

Having a transparent and predictable corporate regulatory environment is an important factor for international businesses looking to invest in Pakistan.

However the SECP can’t solely overcome all the barriers to foreign investment. Tax, foreign exchange, energy, political stability and trade policies need to be addressed by other government institutions in a coordinated manner.

It will be most effective if corporate regulatory reforms are supported by wider economic and institutional reforms.

7. Promote SMEs and Start Ups

Small and Medium Enterprises play an important role in the Pakistani economy. They help create jobs, industrial activity, innovation, export and local supply chains.

However they often face issues with registering their business, obtaining finance, paying taxes, meeting regulations and expanding.

Many small businesses operate informally as they find incorporating and meeting regulations expensive and complicated.

The SECP play an important role in encouraging these businesses to become part of the formal economy.

Simple company registration services have made it easier for entrepreneurs to set up single member companies, private limited companies and other legally recognized businesses.

A single member company is a great option for individual entrepreneurs who want to operate under a separate legal entity without adding any shareholders straight away.

Technology startups, consultancies, service providers and emerging businesses can benefit from incorporating.

They will have a legal identity, be able to enter commercial contracts, issue shares according to law and have a more credible profile when approaching investors and financial institutions.

The SECP also help to facilitate investing whilst improving the regulatory environment for non-banking financial institutions.

However it isn’t enough to just register. Pakistan need to improve venture capital, start-up funding, business incubation and access to institutional finance.

The SECP can help with this by keeping regulations proportional to encourage innovation whilst still protecting investors.

8. Improved Access to Finance through Secured Transactions

One of the largest issues faced by businesses in Pakistan is accessing finance. Many SMEs may not have enough immovable assets to use as collateral.

Traditionally many lenders will require land/buildings as security. This can put off viable businesses who have valuable machinery, stock, receivables etc.

The SECP help to overcome this issue by playing a role in the secured transactions and charge registration system.

They have introduced the Electronic Mortgage Register (EMR) in 2025.

Having electronic mortgage records will help financial institutions identify relevant security interests more efficiently, increasing transparency.

Having an efficient secured transaction environment will encourage lenders to lend against eligible assets. This can help to improve finance opportunities for businesses who don’t have conventional property as collateral.

This is particularly important for manufacturing companies, trading businesses, agriculture and technology.

Improved access to finance can help businesses purchase equipment, expand their production, manage working capital and invest in new technology.

This can help improve the inclusivity of the SME sector in Pakistan.

9. Simplify Regulations

Having an efficient regulatory system is important to ensure they are clear, consistent and easy to understand. Businesses shouldn’t have to spend a lot of time and money trying to understand complex regulations and completing repetitive paperwork.

The SECP have taken steps to simplify their corporate regulations.

One of their key achievements was implementing the Companies Regulations 2024. This brought together various regulations.

As announced in February 2025 they took a look at ten current regulations and reduced the number of statutory forms from 75 to 28. This was done by combining or removing many of the forms.

This was a big step towards reducing duplication and making corporate compliance easier.

The regulations cover:

• Incorporation
• Post incorporation
• Statutory submissions
• Section 42 licensing
• Further share capital
• Group registration
• Exit processes
• Share buybacks
• Intermediary registration

Companies will also have standard forms, examples and FAQs to help them understand what they need to do.

Simplifying regulations is particularly important for smaller businesses who won’t have large legal and compliance departments.

With clear requirements businesses will have more time to focus on their core activities.

However regulations must be consistently applied and understood across all Company Registration Offices.

Businesses should be treated the same no matter where their registered office is or who is processing their application.

10. Encourage Transparency through Digital Shareholding

Having a clear ownership structure is an important aspect of a credible corporate environment.

If shareholding structures aren’t clear, beneficial owners aren’t disclosed and there are ownership disputes this can cause issues for investors, creditors and business partners.

The SECP have taken steps to help improve transparency and security around ownership.

From 3rd March 2025 new incorporated companies must issue shares in a dematerialized format. This is part of the SEC’s initiative to reduce ownership disputes and make sure shareholding records are reliable.

Dematerialized means they are kept electronically.

This can help with record keeping, making it easier to transfer shares and reduce the risk of losing, duplicating or tampering with documents.

The SECP have also been working on verifying Ultimate Beneficial Owners (UBO) to meet international transparency requirements.

Knowing the beneficial owners will help to identify the natural persons who own/control the company.

Having greater transparency can help to reduce financial misconduct, improve anti money laundering and create a credible corporate sector in Pakistan.

For legitimate businesses having clear ownership will make it easier to build trust with banks, investors, regulators and international business partners.