SECP Proposes 183 Major Amendments to Companies Act, 2017 to Improve Ease of Doing Business

Pakistan is preparing for one of its biggest corporate law reforms in recent years as the Securities and Exchange Commission of Pakistan (SECP) has proposed 183 major amendments to the Companies Act, 2017. The goal of these reforms is clear: reduce regulatory burden, improve ease of doing business, promote digitalisation, and make Pakistan more attractive for local and foreign investors.

The proposed changes are expected to modernise Pakistan’s corporate framework, align it with international best practices, and support a business-friendly environment without compromising transparency and governance.

Why the Companies Act, 2017 Needed Reforms

Over the past few years, businesses in Pakistan have repeatedly raised concerns about:

• Complex compliance requirements
• High regulatory costs
• Lengthy approval processes
• Overlapping reporting obligations
• Criminal penalties for minor procedural issues

With Pakistan aiming to boost investment, entrepreneurship, and corporatisation, SECP identified the need to update and simplify corporate laws.

The Companies Act, 2017, although comprehensive, had become too rigid for a fast-evolving digital and economic environment.

SECP and Board of Investment Form Review Committee

To address these challenges, the SECP and the Board of Investment (BoI) jointly constituted a special committee to review the Companies Act.

The committee focused on:

• International corporate law standards
• Feedback from businesses and stakeholders
• Practical difficulties faced by companies
• Digital transformation goals
• Alignment with SECP’s LEAP initiative

This collaborative approach ensured that the amendments reflect real-world business needs, not just legal theory.

LEAP Initiative: Digitalisation at the Core

A major driver behind these amendments is SECP’s digital programme called LEAP – Leading Efficiency through Automation Prowess.

LEAP aims to:

• Increase digital filing and approvals
• Reduce human intervention
• Speed up regulatory processes
• Improve data accuracy and transparency

The proposed amendments are designed to legally support and strengthen LEAP, making digital corporate governance the new normal.

Key Objectives of the 183 Proposed Amendments

According to SECP, the amendments aim to achieve several important objectives:

1. Improve Ease of Doing Business in Pakistan

The reforms will:

• Simplify registration and compliance
• Reduce paperwork and reporting
• Make regulatory interaction faster

This directly supports Pakistan’s Ease of Doing Business agenda.

2. Reduce Regulatory Burden on Companies

One of the most important goals is to reduce unnecessary compliance costs, especially for:

• Small companies
• Startups
• SMEs

By removing redundant requirements, businesses can focus more on growth and innovation.

3. Promote Corporatisation of Businesses

Many businesses in Pakistan operate informally. The amendments aim to:

• Encourage formal registration
• Reduce fear of compliance
• Make corporate structures simpler

This will help expand Pakistan’s formal economy.

Simplified Compliance and Reporting Requirements

The proposed amendments include simplified compliance obligations, such as:

• Reduced reporting frequency
• Proportionate compliance based on company size
• Simplified filing procedures

Smaller companies will no longer face the same compliance pressure as large corporations.

Corporate Governance Reforms

The amendments also place strong emphasis on corporate governance.

Key governance-related changes:

• Adoption of globally recognised governance principles
• Clearer roles and responsibilities of directors and officers
• Increased internal transparency

These reforms aim to build investor confidence and improve trust in Pakistan’s corporate sector.

Proportional Audit and Financial Reporting

A major pain point for businesses has been mandatory audits, regardless of company size.

The new approach:

• Audit and reporting requirements will be proportionate
• Smaller companies may face lighter audit obligations
• Larger companies will maintain stricter oversight

This aligns Pakistan with international corporate practices.

Promotion of Digital Corporate Processes

Digitalisation is a central pillar of the amendments.

Proposed digital reforms include:

• Electronic filing and record-keeping
• Remote participation in company meetings
• Digital maintenance of accounts
• Enhanced data protection standards

These changes reduce costs and make compliance more efficient.

Remote and Virtual Corporate Meetings

The amendments encourage:

• Online shareholder meetings
• Virtual board meetings
• Electronic voting mechanisms

This is especially important for:

• Overseas shareholders
• Multinational companies
• Digital-first startups

Decriminalisation of Corporate Offences

One of the most business-friendly reforms is the decriminalisation of minor offences.

What this means:

• Shift from criminal penalties to pecuniary penalties
• Reduced fear of jail terms for technical violations
• Focus on compliance rather than punishment

This approach is widely used in developed economies.

Faster Enforcement and Clear Accountability

While easing compliance, SECP has also proposed:

• Faster enforcement mechanisms
• Clear accountability for key officials
• Transparent regulatory actions

This ensures that ease of doing business does not mean weak oversight.

Transparency in Dealings With SECP

The amendments aim to improve:

• Transparency in company-SECP interactions
• Clear communication channels
• Digital tracking of cases

This reduces uncertainty and improves regulatory trust.

How These Reforms Benefit Businesses

For Startups:

• Easier incorporation
• Lower compliance costs
• Reduced legal risk

For SMEs:

• Simplified reporting
• Proportionate audits
• Faster approvals

For Large Corporations:

• Clear governance rules
• Efficient digital processes
• Stronger investor confidence

Impact on Foreign Investment

These reforms are expected to:

• Improve Pakistan’s global business image
• Attract foreign direct investment (FDI)
• Support multinational companies operating in Pakistan

A modern Companies Act is critical for international competitiveness.

Strengthening Trust in Pakistan’s Corporate Ecosystem

By combining:

• Ease of doing business
• Strong governance
• Digitalisation
• Accountability

The amendments aim to create a balanced corporate ecosystem where businesses can grow responsibly.

SECP’s Vision for the Future

SECP stated that these reforms are forward-looking and designed to ensure that Pakistan’s corporate laws:

• Remain relevant
• Support innovation
• Adapt to digital transformation
• Encourage entrepreneurship

The goal is long-term economic stability, not short-term relief.

What Happens Next?

The proposed amendments will:

• Be reviewed by relevant stakeholders
• Undergo legislative process
• Be implemented in phases

Once approved, they could reshape corporate regulation in Pakistan for years to come.

Conclusion

The 183 proposed amendments to the Companies Act, 2017 mark a significant milestone in Pakistan’s journey toward business-friendly regulation and digital governance. By reducing regulatory burden, promoting corporatisation, encouraging digitalisation, and aligning with global standards, SECP is laying the foundation for a more competitive, transparent, and growth-oriented corporate sector.

If implemented effectively, these reforms could greatly improve ease of doing business in Pakistan, boost investor confidence, and support sustainable economic growth.

FAQs – SECP Companies Act Amendments 2026