Pakistan’s Finance Minister Muhammad Aurangzeb has said he wants the country’s record $3 billion Eurobond success to translate into real investment and to attract more long-term private capital into the economy.
Aurangzeb made the remarks while chairing the second meeting of the committee formed to develop a National Private Equity Policy Framework. The meeting followed Pakistan’s successful $3 billion dual-tranche Eurobond issuance, which saw strong and diversified participation from international investors and marked the largest capital raise achieved by the country.
Deepening Pakistan’s Capital Markets
The Finance Minister said the positive response from global investors reflected growing confidence in Pakistan’s economic direction and provided an opportunity to deepen the equity side of the capital market and diversify sources of long-term financing. He recalled that dedicated workstreams had been established after the committee’s first meeting to examine regulatory, taxation, institutional investment and other policy issues.
The committee reviewed the regulatory workstream, including measures being considered by the State Bank of Pakistan to facilitate institutional participation, investment, repatriation and exit. Discussions also covered the accounting treatment of private equity investments under existing banking and IFRS requirements, along with ways to create a more enabling environment for institutional investors such as banks, development finance institutions, insurance companies and pension funds.
Tax Relief and a Push for Real Outcomes
The committee also considered tax neutrality for private equity structures, aiming to avoid an additional layer of taxation at the fund level while retaining taxation at the level of those ultimately earning the income. Members reviewed existing income-distribution requirements for funds and discussed ways to facilitate genuine investment without creating opportunities for tax arbitrage or erosion of the tax base. The tax treatment of capital gains from private-company transactions was also discussed, with an emphasis on avoiding unnecessary discouragement of legitimate investment and exits while maintaining safeguards against undervaluation.
Aurangzeb stressed that the proposed framework should not merely create additional financial structures, but should mobilize actual capital and translate it into real investment outcomes. He emphasized the need to build a credible domestic ecosystem capable of attracting Pakistani and international investos, developing local fund-management capacity, and connecting Pakistani businesses with deeper pools of institutional capital. The committee agreed to continue coordination among the regulatory, taxation and legal workstreams and consolidate their recommendations into a coherent national framework, with the Finance Minister calling for the process to move from policy design toward implementation through a clear and sequenced approach.
