What’s Inside SECP ‘Empowering Innovation’ Roadmap for Startups? Here’s Everything You Need to Know

Karachi, July 2025, The Securities and Exchange Commission of Pakistan (SECP) has released a landmark policy document titled “Empowering Innovation: Roadmap for Startups”, a culmination of extensive consultations following the 2024 Pakistan Startup Summit. The report outlines SECP’s strategic vision for reforming and enabling the startup ecosystem in Pakistan. This roadmap is more than a policy; it’s a signal that regulatory leadership is now actively engaging with innovation as a national growth lever.

As the apex regulator for corporate entities, capital markets, and non-bank financial sectors, SECP’s involvement is critical to shaping a coherent and enabling environment for startups. This document aims to remove systemic barriers, introduce forward-looking policies, and establish collaborative mechanisms between public institutions and private innovators. For entrepreneurs, investors, incubators, and accelerators across Pakistan, this marks a potentially transformative moment.

In this article, we’ll unpack the SECP report’s key findings and recommendations, providing a concise yet comprehensive summary to guide Pakistani startups on their innovation journey.

Top Challenges Highlighted in SECP’s Empowering Innovation Report

The report identifies several deep-rooted challenges holding back the growth of startups in Pakistan. Chief among them is the issue of restricted access to finance. According to SECP’s findings, approximately 42 percent of surveyed startup founders cite lack of funding as the single greatest barrier to growth. This is exacerbated by a sharp decline in venture capital inflows, which dropped by over 80 percent between 2022 and 2024, reflecting not only global market contractions but also local investor hesitancy. Startups struggle to raise early-stage capital in a risk-averse environment, further pressured by persistently high interest rates hovering above 20 percent, which deter borrowing as an alternative funding mechanism.

In parallel, the regulatory regime remains poorly aligned with the operational realities of startups. Early-stage companies are often subjected to the same legal and compliance obligations as large, established firms despite lacking the capacity and resources to meet them. These blanket requirements discourage formalization and frequently result in startups operating in legal grey zones or choosing not to register at all. The absence of a clear and startup-specific legal definition compounds the problem, leading to confusion across government departments and regulatory bodies.

Institutional capacity gaps also feature prominently. Around 65 percent of startup founders expressed frustration with fragmented and outdated digital infrastructure. Reliable broadband remains concentrated in major cities, while identity verification and onboarding processes are inconsistent across provinces. These deficiencies hinder digital startups from scaling beyond urban centers. Moreover, only 17 percent of startups surveyed believe that current government support systems are adequately equipped to meet their growth needs.

The talent pipeline presents another critical bottleneck. Many founders report difficulty hiring for technical and specialized roles due to mismatches between academic training and market demands. The report notes that a majority of graduates entering the job market lack startup-readiness, with less than 10 percent receiving formal entrepreneurship education or exposure during their academic programs. A prevailing societal preference for stable, conventional employment further limits the pool of willing startup participants.

The cumulative effect of these challenges is a fragile and under-leveraged startup ecosystem where innovation is stifled before it can mature. Without urgent and targeted reforms, Pakistan risks a continued exodus of entrepreneurial talent to more supportive and structured environments abroad.  

SECP’s Proposed Reforms to Boost Startup Growth in Pakistan

To address these issues, SECP has proposed a wide-ranging set of reforms aimed at institutional realignment, regulatory clarity, and ecosystem-wide coordination. A central recommendation is the harmonization of laws and definitions that govern startups. The SECP advocates amending the Companies Act and related regulations to create a dedicated legal category for startups, which would allow for customized compliance structures, limited liability protections, and simplified registration procedures. The Commission also aims to reduce licensing redundancies and bring clarity to tax policies that currently inhibit formal registration.

A significant emphasis is placed on the role of digital infrastructure. The roadmap calls for the acceleration of national digital transformation efforts, including improvements to broadband access, the expansion of secure digital ID and payment platforms, and the establishment of a centralized digital ecosystem through a proposed Pakistan Digital Authority. These measures are expected to improve inclusion, ease of doing business, and the scalability of tech-based solutions.

The report also prioritizes the strengthening of SECP’s own innovation-enabling mechanisms. The Commission plans to expand its regulatory sandbox already in use by fintechs and create structured onboarding channels through the SECP Innovation Office. These will offer startups a space to pilot solutions in a controlled environment while receiving regulatory mentorship and support.

Policy collaboration emerges as another pillar. The roadmap envisions stronger coordination between SECP, the Federal Board of Revenue (FBR), the State Bank of Pakistan (SBP), and provincial authorities to streamline approvals, reduce tax burdens, and enable co-investment frameworks. SECP also proposes public–private partnerships to catalyze venture funding, particularly in underserved regions, and supports the development of non-traditional funding avenues such as venture debt and equity crowdfunding.

Why SECP’s Innovation Roadmap Matters for Pakistani Startups and Investors

This report arrives at a critical juncture for the Pakistani entrepreneurial landscape. Over the past few years, startups have battled shrinking funding inflows, regulatory uncertainty, and a shortage of institutional support. The SECP’s roadmap does more than diagnose these problems; it brings the weight of a major state institution to bear on their resolution. For founders, the prospect of simplified compliance, expanded sandbox participation, and formal legal recognition offers a clear path to legitimacy and growth. For investors, the roadmap promises a more predictable environment in which risk can be managed and returns measured.

Incubators and accelerators stand to benefit from the SECP’s proposed alignment of public policy and grassroots innovation. With clearer institutional support, they can scale operations, extend outreach to second-tier cities, and integrate with national funding and mentorship networks. The report also sets the stage for more constructive engagement between startups and regulators, replacing the traditional adversarial dynamic with one of shared goals.

Crucially, the roadmap ties together scattered efforts across ministries, provincial bodies, and industry players, offering a coordinated blueprint rather than piecemeal interventions. In a country where early-stage ventures often fall through the cracks of fragmented governance, this shift towards cohesion and continuity is vital.

What’s Next for Pakistan’s Startup Ecosystem After SECP’s Roadmap?

SECP’s Empowering Innovation report sets a new precedent in Pakistan’s startup policy landscape. It is a forward-looking document that not only identifies barriers but proposes practical, scalable solutions to dismantle them. For founders, this is a moment to engage actively with policy, align with regulatory developments, and prepare to scale in a more enabling environment. For the broader ecosystem, it’s a call to collaborate across sectors, cities, and institutions to build a startup economy that reflects the full potential of Pakistan’s talent and ambition.

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