The Board of Investment (BoI) is hoping that Pakistan's position on the Ease of Doing Business Index, 2021, will improve, following recent amendments to the Companies Act, 2017.
The federal government has introduced certain amendments to the Companies Act, 2017.
These amendments have been enacted through Companies (Amendment) Ordinance, 2020, promulgated on April 30, 2020.
The objective of the amendment is to encourage startups, improve protection of minority shareholders, and remove some anomalies noted in the provisions of the act.
The amendment has also been done in definition of startup companies, employees' stock options, and buyback of shares has been allowed for all companies, while earlier, this was allowed for public and listed companies only.
In Ease of Doing Business Report 2020, Pakistan has seen improvement in six indicators however reforms made by Pakistan in rest of four indicators were not accepted by the World Bank.
These are, "Getting Credit", "Protecting minority rights", "Enforcing Contracts" and "Resolving Insolvency."
Pakistan showed improvement in starting a business, dealing with construction permits, getting electricity, registering property, paying taxes, and trading across borders.
The BoI is also expecting to further improve the ranking by amendment in Secured Transaction Act, 2016.
The amendments will help to enable the government to operationalise the electronic registry of moveable assets.
This will facilitate the SME sector to get credit from the banks.
An integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in moveable assets, exist in the economy.
This will improve ranking by 20 points in ease of doing business index, tweeted Adviser to PM on Commerce and Investment Abdul Razak Dawood.
A BoI official told Business Recorder that, Pakistan, was vigorously pursuing reforms in judicial system in line with the ease of doing business index, and various meetings with the Sindh High Court and the Punjab High Court were also held.
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