Islamabad July 22 2022: Through Finance Act 2022 government of Pakistan has exempted income derived by venture capital companies and venture capital funds to promote culture of startups.
The profits and gains derived VC or VC funds are exempted from taxation for the period from 1st day of July, 2022 to 30th day of June, 2025, as are registered with the Securities and Exchange Commission of Pakistan under relevant applicable rules.
Startups in Pakistan have attracted in a total of USD 284.89 million in funding across 45 deals during first first half of calendar year 2022, which is almost three times when compared to investment.
This will help to attract foreign direct investment which is on a declining path since 2008, the year in which Pakistan receives more than $5.5 billion in FDI, as per data of State Bank of Pakistan. Pakistan attracted foreign direct investment (FDI) of USD 1,868mn, during fiscal year 2022.
China remained the largest investor with a net FDI of USD 532 mn during fiscal year 2022 compared with USD 752 mn during the same period last year.
United States remained the second-largest investor with a net FDI of USD 250 mn during fiscal year 2022 compared with USD 166 mn during the same period last year.
During fiscal year 2022, a major investment was poured into the Power sector (USD 567mn) followed by Financial Business Sector (USD 373mn) and Oil and Gas Exploration (USD 188mn).