ISLAMABAD: Pakistan has eased licensing rules for companies with foreign sponsors or directors, allowing them to apply for regulatory approvals before completing security clearance procedures, the Securities and Exchange Commission of Pakistan said on Monday.
The SECP, Pakistan’s corporate and financial markets regulator, said companies would now be able to submit licensing applications on the basis of a self-declaration undertaking instead of obtaining prior security clearance for foreign directors from relevant government departments.
The change applies to companies seeking licenses in regulated financial services sectors, including capital markets, non-banking finance and insurance, where investors previously had to complete security clearance before submitting applications to the regulator.
“The revised framework strikes an appropriate balance between facilitating investment and maintaining regulatory oversight,” SECP Chairman Dr. Kabir Ahmed Sidhu said in a statement.
Pakistan has been seeking to attract more foreign investment as it tries to sustain economic recovery under a $7 billion International Monetary Fund program approved in September 2024. Investors have long cited regulatory delays, policy uncertainty and administrative requirements as barriers to setting up and expanding businesses in the country.
Under the revised framework, the SECP will process licensing applications without requiring security clearance at the application stage. However, the appointment of foreign directors will remain subject to clearance by the relevant authorities.
Applicants will also be required to give an undertaking that any proposed foreign director whose security clearance is denied will be replaced.
Previously, companies with foreign directors had to obtain security clearance before filing licensing applications with the SECP, a process the regulator said often took considerable time and was viewed by investors as a barrier to establishing regulated financial businesses in Pakistan.
Sidhu said “the measure will enable genuine investors to enter Pakistan’s regulated financial sector more efficiently while ensuring compliance with applicable laws and security requirements.”
The SECP said the measure was expected to reduce procedural delays, improve regulatory certainty and facilitate foreign investment in Pakistan’s regulated financial services sector.
