{
  "id": 2991965,
  "title": "New Law Proposes up to Rs. 100 Million Fine on Unlicensed Businesses",
  "url": "https://urgent.news/2026/08/24/new-law-proposes-up-to-rs-100-million-fine-on-unlicensed-businesses",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-24T10:03:02.000Z",
  "source": {
    "name": "ProPakistani",
    "slug": "propakistani",
    "url": "https://propakistani.pk/2026/08/24/new-law-proposes-up-to-rs-100-million-fine-on-unlicensed-businesses/"
  },
  "original_language": "en",
  "account": "Drafted on 2026, the Venture Capital Act 2026 outlines strict regulations for unlicensed businesses engaging in venture capital activities, imposing fines up to Rs. 100 million and potential imprisonment for up to three years. The law aims to establish a formal regulatory framework for venture capital funds, fund managers, and investment in startups and high-growth businesses. A startup, as defined, is a company in existence for not more than 10 years, with annual turnover below Rs. 500 million in any financial year since incorporation, and involved in product, process, or service development or possessing a scalable business model with significant employment or wealth-creation potential. Companies restructured or split from existing entities do not qualify as startups. The framework introduces a two-tier system, requiring licenses for venture capital fund management companies and separate registrations for individual fund entities. Conducting venture capital activities without a license is prohibited, and only public and private limited companies, limited liability partnerships, and eligible fund management companies can apply for licenses. License applications require a minimum equity or capital of Rs. 15 million, including specified details of promoters, directors, majority shareholders, and the CEO. The license fee is Rs. 200,000, with the Securities and Exchange Commission (SECP) expected to decide within 45 working days. Existing private fund management companies already engaged in private equity or venture capital activities may be deemed licensed, but must segregate their activities. Licensed managers can establish, manage, and administer venture capital funds, handle investments, and provide advisory services, strictly adhering to investor interests, fund objectives, and regulatory requirements. Funds must be registered separately from their management companies, detailing their legal structure, investment objectives, sectors, life, placement memorandum, and investor commitments. Shariah-compliant funds must also submit Shariah structures, opinions, and screening criteria. Investors must be Pakistani or foreign, with annual incomes of at least Rs. 5 million and net assets of at least Rs. 15 million, excluding personal residences. They must acknowledge understanding venture capital risks and undergo annual income and asset verification. Investors can participate in major changes by notifying SECP and unit holders within seven days, and changes to placement memorandums require 51% approval by value. The SECP holds extensive powers to investigate regulatory breaches, suspend, or cancel licenses, and provide managers the opportunity for a hearing before taking action.",
  "summary": "The newly proposed Venture Capital Act, 2026 imposes a fine of up to Rs. 100 million, along with imprisonment of … Read More The post New Law Proposes up to Rs. 100 Million Fine on Unlicensed Businesses appeared first on ProPakistani .",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}