Business laws and economic growth

Pakistan currently stands at 147th position on the overall doing business ranking, which is not encouraging. Pakistan’s ranking is calculated from two major cities: Lahore (35%), and Karachi (65%).
Considering this, the government has recently made significant amendments in business laws to promote economic growth, attract investment, and improve the ease of doing business in the country.
The amendments have been made in the Companies Act, Securities and Exchange Order, Insolvency Act, Contract Act, and Sales of Goods Act.
These amendments to business laws in Pakistan are expected to create a more supportive environment for businesses to operate and grow.
By improving the ease of doing business, promoting transparency, and enhancing investor protection, Pakistan is taking steps toward achieving economic growth and its development goals.
The Companies Act has been amended to simplify the process of company registration and enhance corporate governance.
The said amendments have also strengthened the role of independent directors in ensuring transparency and accountability in the company’s management.
In the Securities and Exchange Ordinance, amendments have been made to improve the regulatory framework for the capital market. The amendments aim to promote transparency and enhance investor protection in the capital market.
Also, a new insolvency law has been introduced to strengthen the legal framework for insolvency and bankruptcy. The law provides a more efficient and transparent mechanism for the resolution of distressed assets, which is expected to promote investor confidence and attract more investment.
The Contract Act has been amended to strengthen the legal framework for contract enforcement. The amendments aim to promote greater certainty in contractual relations and enhance the enforceability of contracts.
The Sales of Goods Act has been amended to improve the legal framework for the sale of goods. The amendments aim to promote greater transparency and accountability in the sale of goods, which is expected to benefit both buyers and sellers.
These recent amendments to business laws in Pakistan have the potential to support and facilitate the growth of businesses in several ways.
Firstly, the amendments aim to improve the ease of doing business in Pakistan by simplifying regulatory procedures, streamlining business registration processes, and promoting investor-friendly policies.
For instance, the government has established a “One-Window” facility for business registration and is working on reducing the time and cost required to start a business.
Secondly, the amendments seek to enhance the protection of intellectual property rights, which can be beneficial for businesses that rely on innovation and creativity to drive growth.
By providing stronger legal protection for trademarks, patents, and copyrights, the amendments can help businesses safeguard their intellectual property assets and prevent infringement by competitors.
Thirdly, the amendments aim to promote transparency and accountability in business transactions, which can help in building trust and confidence among investors, customers, and other stakeholders.
The amendments provide for stricter corporate governance standards, greater disclosure requirements, and enhanced accountability for directors and officers of companies.
Lastly, the amendments aim to encourage entrepreneurship and innovation by providing incentives and support for small and medium-sized enterprises (SMEs).
For instance, the government has established a dedicated SME authority to provide financial and technical assistance to SMEs and has launched various initiatives to promote entrepreneurship and innovation.
Overall, the recent amendments to business laws in Pakistan have the potential to create a more favorable environment for businesses to operate in, which can support their growth and development.
However, the successful implementation of these amendments will depend on effective enforcement and continued efforts to address the remaining challenges faced by businesses in Pakistan, such as infrastructure constraints and a complex regulatory environment.
Besides, several things can be done to simplify business laws and regulations in Pakistan and promote effective output. Following are few suggestions for the government.
Streamline and simplify the registration process: The registration process for businesses in Pakistan can be cumbersome and time-consuming. Streamlining and simplifying this process can encourage more people to start businesses, leading to increased economic growth.
Create a one-stop shop for business registration: In addition to simplifying the registration process, creating a one-stop shop for all business-related services can also make it easier for entrepreneurs to start and operate their businesses.
Improve access to financing: Access to financing can be a major challenge for small businesses in Pakistan. The government can work to improve access to financing by creating programs that offer loans or grants to small businesses or by partnering with private law financial institutions to provide support.
Increase transparency and reduce corruption: Corruption can be a significant barrier to doing business in Pakistan. By increasing transparency and reducing corruption, the government can create a more level playing field for businesses and encourage investment in the country.
Provide incentives for businesses: The government can provide tax incentives or other benefits for businesses that invest in certain sectors or regions of the country. This can encourage businesses to invest in areas that need development and can help create jobs and stimulate economic growth.