Category Archives: Insight article

We authored the Pakistan Chapter of the Chambers Corporate M&A Guide 2023, which provides a comprehensive overview of the legal framework governing mergers and acquisitions in Pakistan.

Discussing recent trends, the guide notes an increase in M&A activity as businesses pursue growth strategies amid depressed valuations. The key industries that experienced significant M&A activity were IT and IT-enabled services, independent power producers, and the consumer goods sectors.

Pakistan’s corporate M&A landscape is governed by the Companies Act 2017, the Securities Act 2015 and related regulations and the Competition Act 2010. The primary regulators overseeing M&A transactions are the Securities and Exchange Commission of Pakistan (SECP), the Competition Commission of Pakistan (CCP), and, for cross-border M&A deals, the State Bank of Pakistan (SBP). Sector-specific statutes impose additional requirements for M&A transactions in regulated industries such as insurance and banking.

The guide examines the legal regime applicable to foreign investments in Pakistan, including security clearance requirements, repatriation of profits and dividends, and sectoral caps on foreign ownership.

The main modes of acquisition of a company in Pakistan are share purchases and schemes of arrangement.  Factors influencing choice include complexity, timelines and tax implications.

Common practices around due diligence and deal structures are also discussed. The scope of due diligence depends on commercial factors, transaction structure and the size/industry of the target. Detailed legal due diligence is common for local deals, while foreign acquirers may opt for more limited red flag reviews.

The guide provides an in-depth overview of the takeover regulations applicable to acquisitions of listed companies in Pakistan, including public disclosure requirements, mandatory public offer thresholds, timelines, permissible conditions on the offer, implications for minority shareholders and available squeeze-out mechanisms.

In addition, the guide examines directors’ duties under Pakistani law in connection with M&A deals, including their role during the negotiation process and in providing recommendations to shareholders.

The guide discusses defensive measures that can be adopted by target companies in Pakistan to thwart hostile takeover attempts. Common defensive measures include seeking court injunctions or involving regulators if the acquirer violates laws.

The guide further covers the growing trend of shareholder activism in the country, where minority shareholders in listed companies increasingly exercise their rights to influence major corporate decisions.   For comprehensive insights on M&A regulations and trends in Pakistan, read the Pakistan chapter of the Chambers Corporate M&A Guide 2023.

For more information on M&A, contact Pakistan’s Managing Partner Bilal Shaukat or Partner Shafaq Rehman.

We authored the Pakistan Chapter of the 2023 edition of the Practice Guide on Pakistan TMT Laws (technology, media and telecommunications).

The Practice Guide on Pakistan TMT Laws provides a comprehensive overview of the legal landscape in Pakistan, covering the digital economy, cloud computing, the Internet of Things, broadcast media, telecommunications regulation, and electronic signatures and digital identity.

The digital economy is rapidly growing in Pakistan. The Practice Guide on Pakistan TMT Laws provides insights into the regulatory framework governing digital banks, e-commerce, and electronic money institutions (EMIs), including the State Bank of Pakistan’s Licensing and Regulatory Framework for Digital Banks and the Electronic Money Institutions Regulations 2019. It also discusses the SBP’s plans regarding a Central Bank Digital Currency and launching a QR Code-based payment system to enable merchants to receive instant payments.

The guide also covers cloud computing and the legal framework governing outsourcing to cloud service providers. It discusses the SBP’s Framework on Outsourcing to Cloud Service providers applicable to financial institutions and the extent of application of the Personal Data Protection Bill (if and when enacted by Parliament) and of the Prevention of Electronic Crimes Act 2016 (PECA) and the Removal and Blocking of Unlawful Online (Procedure, Oversight and Safeguards) Rules 2021 to cloud computing.

The Internet of Things and machine-to-machine communication are also discussed in the guide, with a focus on the application of the Pakistan Telecommunication (Reorganisation) Act 1996 (PTA Act) and the Prevention of Electronic Crimes Act 2016. 

Broadcast media and distribution services in Pakistan are subject to regulation by the Pakistan Electronic Media Regulatory Authority (PEMRA). The guide provides a detailed analysis of the regulatory framework governing broadcast media and distribution services, including licensing requirements, foreign ownership restrictions and requirements for broadcasting foreign satellite TV channels.

The Practice Guide on Pakistan TMT Laws provides an overview of the regulation of the operation of telecommunications systems and the provision of telecommunications services by the Pakistan Telecommunications Authority. The guide discusses the PTA Act and regulations relating to the allocation of radio spectrum, terminal equipment approval, VoIP, and communication secrecy

Finally, the guide provides insights into the legal framework governing electronic signatures and digital identity use in Pakistan, covering the Electronic Transactions Ordinance 2002 and the National Database and Registration Authority (NADRA) regime.  For a comprehensive overview of the legal landscape in Pakistan, applicable technology, media and telecommunications, please read the full Pakistan Chapter of the 2023 edition of the Chambers Practice Guide.

For more information on Pakistan TMT Laws, contact our partners, Yousaf Khosa and Shafaq Rehman.

The chapter covers key market trends, early-stage and venture capital financing, liquidity events, spin-offs, acquisitions of public technology companies and business-critical regulatory requirements.

Senior Partner Hasnain Naqvee, Partner Shafaq Rehman and Associate Zeelaf Shahzad authored the chapter.

For more information, speak to Hasnain Naqvee today.