New Private Equity Policy Framework Set to Unveil $10‑15 Billion in Tax‑Neutral Investments

The government is on track to finalize a comprehensive national private equity framework within the next two weeks, aiming to attract $10‑15 billion in tax‑neutral capital from both domestic and foreign investors, according to a Dawn report. Following the framework’s completion, regulatory measures are anticipated to be introduced, with several policy adjustments expected to be incorporated into the FY2027‑28 finance bill.

The new rules will address fund structures, transparency, investment arrangements, and tax treatment. The State Bank of Pakistan informed the committee that the maximum bank exposure to a single private equity fund has been increased from 10% to 20%, and the meeting also discussed classifying funds as pass‑through vehicles, whereby taxes would be levied on investors rather than on the funds themselves.

Officials highlighted the growth of bank exposure to REITs—from Rs22 billion in 2021 to over Rs280 billion today—as evidence of how regulatory reforms can boost investment. The committee also explored ways to channel domestic capital from banks, insurers, mutual funds, and pension schemes into private equity, while establishing clear entry and exit guidelines for foreign investors.

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