For years, foreign investors told us the same thing: the licence file was ready, but the application could not even be filed until security clearance came through for every foreign director. That wait could run for months. The SECP itself identified the clearance step as a long-standing barrier to entry, and the June 2026 reform is its answer.
1. Before and after
| Before June 2026 | After June 2026 | |
|---|---|---|
| Security clearance of foreign directors | Required before the licence application could proceed | Not required at application stage |
| What the applicant files | Clearance from the relevant authorities | Self-declaration undertaking |
| Clearance itself | Pre-condition | Still required, obtained after appointment |
| If clearance is refused | Application stalled | Company must nominate a replacement director |
2. What still applies to foreign directors
- Fit-and-proper review. Sponsors, directors, the chairman and the chief executive of an NBFC must meet the SECP's fit-and-proper criteria covering integrity, financial soundness, competence and track record, and their appointment requires prior SECP approval.
- No residency rule for directors. Directors of a Pakistani company may live abroad.
- Chief executive. Must be a full-time officer of the NBFC. A foreign chief executive is allowed and needs an appropriate work visa.
- Independent directors. Lending NBFCs need independent director representation, appointed from the databank maintained under the Companies Act, 2017, which in practice means Pakistan-based professionals.
- Documents. Passports, CVs, affidavits and, for corporate sponsors, apostilled or attested constitutional documents and board resolutions.
3. Practical tips for foreign sponsors
- Choose directors whose background is easy to evidence: clean credit history, no regulatory sanctions, verifiable experience.
- Prepare a reserve candidate for each foreign seat, since a refused director must be replaced.
- Start apostille or embassy attestation early; it is now the most common bottleneck.
- Identify your Pakistan-based independent director and chief executive before filing, not after.
4. How this fits with the 2025 NBFC reforms
Combined with the November 2025 NBFC amendments, which relaxed experience rules for fintech founders and rebuilt the P2P regime, the route for a foreign group to launch a lending or P2P platform in Pakistan is now materially shorter than it was in 2024.
Frequently asked questions
Do foreign directors still need security clearance?
Yes, but it no longer holds up the licence application. It follows appointment, and a refused director must be replaced.
Can a foreigner be CEO of an NBFC in Pakistan?
Yes, subject to SECP fit-and-proper approval, full-time engagement and an appropriate work visa.
Do directors need to live in Pakistan?
No. There is no residency requirement for directors.
Which sectors does the reform cover?
SECP licensing applications by companies with foreign sponsors or directors, including NBFCs, capital-market intermediaries and insurers.
We prepare fit-and-proper files, undertakings and clearance follow-up end to end.
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Related: Corporate & Commercial · International clients · Apostille & attestation