Shams ul Nisa

The enhanced collaboration between the Securities and Exchange Commission of Pakistan (SECP), the Special Technology Zones Authority (STZA), and the Pakistan Stock Exchange (PSX) has become essential to accelerating the country’s digital transformation, amid intensifying regional competition and the urgent need for innovation-driven growth, reports WealthPk.

According to the Asian Development Bank Report, Pakistan’s digital economy contributes only 1.5% to its GDP, significantly behind regional peers like India, which contributes 10.5%. To close this gap, enhanced policy coordination and industry collaboration are essential. The SECP, the STZA, and the PSX form a crucial alliance to drive innovation, streamline growth, and attract investment in the digital sector.

The SECP is driving digital innovation by simplifying regulations, supporting startups, and promoting venture capital. SECP is focused on enabling growth through streamlined registration and tailored regulatory frameworks, with nearly 10% of registered companies in the ICT sector.

The STZA is leading the development of a world-class tech ecosystem in Pakistan by offering investment-friendly technology zones, modern infrastructure, and strong incentives. Under the STZA Act of 2021, investors are eligible for ten-year tax exemptions, full foreign ownership, profit repatriation, and simplified regulatory approvals, all of which support innovation, technology, and R&D.

The Pakistan Stock Exchange is shifting its focus toward supporting tech-driven growth, with tech firms currently comprising only 3% of listed companies and their market capitalisation. Backed by the SECP and STZA, PSX aims to boost tech IPOs, increase tech listings to 5% by 2027 and 12% by 2030, and enhance access to equity financing to strengthen investor confidence and valuations in the digital sector.

The combined efforts of the SECP, STZA, and PSX are expected to significantly boost Pakistan’s economic competitiveness by attracting greater foreign direct investment in the tech sector through a globally competitive regulatory and tax environment. The collaboration also aims to revive venture capital inflows for digital startups and is poised to generate thousands of high-value jobs for Pakistan’s growing youth population, driven by renewed investor confidence and the expansion of technology zones.

Pakistan’s tech sector has long struggled with high taxes, policy uncertainty, and limited access to affordable capital. However, the alignment of STZA incentives with SECP regulations and PSX financing mechanisms is set to ease these challenges. This collaboration is expected to lower operational costs for tech firms, improve access to digital infrastructure for startups, and allow businesses to focus more on research, development, and innovation rather than navigating complex regulatory and tax hurdles.

Pakistan, with over 60% of its services exports coming from digital services and an 89% trade surplus in ICT and telecom, stands to further strengthen its external accounts through improved regulation and capital access. The country’s digital export target is achievable through coordinated efforts by SECP, STZA, and PSX, backed by initiatives such as expanding technology parks and launching a national digital stack to support e-governance, digital payments, and fintech innovation.

Realizing Pakistan’s full digital growth potential hinges on sustained collaboration between the SECP, STZA, and PSX. As efforts to introduce supportive frameworks for startup listings and investor engagement gain momentum, overcoming hurdles such as skill shortages, policy inconsistency, and limited access to financing remains critical. Hence, ongoing coordination will be vital to aligning infrastructure, regulatory reforms, and capital flow, paving the way for lasting digital and economic advancement.

Credit: INP-WealthPk