Pakistan, the fifth-most populous country in the world, is home to more than 146 million youth population. Among this two-thirds of the country’s total population (220 million+), around 4 million reach working age every year. Whereas, 1.84 million jobs are created per annum.
Pakistan’s unemployment rate is improving, standing at 6.3%, especially across the major cities. This upward trend in the working population is due to the increasing startup activities in the country.
Currently, Pakistan hosts more than 250 startups, operating since 2015.
So, if you’re also tired of your 9-to-5 job and looking for better investment opportunities, now is your chance to take charge and start your own business.
Pakistan, being a growing economy, offers a lot of opportunities for business owners. Here’s a quick guide on how to find those high-yielding possibilities; our experts will share what industries to invest in, what are the fastest-growing businesses in Pakistan, how you should leverage your marketing dollars and the scope of the businesses being discussed.
Entrepreneurship Opportunities for Entrepreneurs in Pakistan
Statistically, entrepreneurship in Pakistan is one of the least-tapped frontier markets. The industry raised $486m of global capital since January 2021; in 2021 only, 83 startups raised $350m. And, in the first quarter of 22, this figure had crossed $136m.
In Pakistan, the trend of entrepreneurship among youngsters is rising, especially within the property development sector. Well, thanks to national and provincial incubators and business-friendly benefits, like three-year tax relief, for surging startup activities in the country.
Even the news of Pakistani entrepreneurs securing millions in funding has also been in the headlines for a couple of years.
To begin this round-up, let’s crack why Pakistan is the best place for investment.
Scope of Entrepreneurship in Pakistan
In 2020, when the whole world was slowed down, Pakistani startups received investments of $77 million, whereas, in the next year, the investments in Pakistani startups crossed the figure of $228 million. Five years ago, this figure was just $8 million.
The government of Pakistan, since 2018, has been supporting the entrepreneurial ecosystem in the country. Some of such initiatives include offering low-interest loans to young entrepreneurs, like the Kamyab Jawan (Successful Youth) and Kamyab Pakistan (Successful Pakistan) schemes.
Secondly, there has been increased support and funding for university and national incubation centers. Even the State Bank of Pakistan has also relaxed regulations to facilitate startups in accessing finance.
Also, INGOs have also been producing entrepreneurship-related initiatives in the country, including UNICEF (GenU, Youth Innovation Challenge), UNDP (SheLovesTech, SDG Bootcafors, YouthCo: Lab), British Council (DICE), USAID (Challenge Fund), GIZ (E4W, FSD), etc.
Last but not least, in the face of Pakistan’s political instability; consistent inability to attract foreign investment; rising security concerns; FATF grey-listing; and low ranking in ease-of-doing businesses, homegrown enterprises are the only way forward.
Before jumping to how to become an entrepreneur in Pakistan, get to know where to begin your entrepreneurial journey.
Where to Start a Business in Pakistan
Well, it’s no secret that Pakistan has a progressive economy. Large-scale industries, like construction, are experiencing a boost, while industries like agriculture are facing a decline.
Starting a food chain… just because the food industry is going well, may not be the best move for your business.
Business experts suggest that you can’t simply invest in sectors that have been going strong for years. Rather get to know your startup goals before diving into any known or unknown market.
Decide whether you’re looking for a way to break into an industry, introduce something new to the existing market, or want to create a niche within a new or existing market.
So, here’s the deal… if you want your product to break into an existing industry, then identify the top five sectors for investment and know the respective insights.
Knowing the key players and the overall dynamics will save you time, energy, and of course, your financial assets.
Best Industries for Entrepreneurs in Pakistan
Though Pakistan is full of entrepreneurship opportunities, it can be difficult to find the right one. If you pick the right industry, your time and resources will yield better results.
Based on our experts’ opinions and analysis, these are some of the high-return industries that have great potential and offer plenty of opportunities for entrepreneurs;
- Import and Export Company: From manpower to documentation, knitwear, rice, cotton, tracking duties, surgical supplies, IT solutions, and to whatnot, Pakistan’s import and export economy is thriving. According to the provisional figures, exports from Pakistan during April 2022 were Rs. 534,514 million as against Rs. 498,845 million in March ’22.
- Software Development Company: Pakistan is becoming the hub of software development. There are around 4,641 IT firms and 4,066 call centers in Pakistan. and, more than 42% (10% of the global) of freelancers in Pakistan are in software development. So, whether you have expertise in app development or graphic designing, it’s high time to turn your skills into a sound business and be a part of this fastest-growing industry in Pakistan.
- Automobile Spare Parts and Accessories Business: Aftermarket parts and accessories are very profitable sectors of Pakistan. Many known mechanics have started their online businesses in Pakistan, making thousands of rupees from selling spare parts. In FY 2021-22, the automotive parts and accessories accounted for $522,097,000.
- Travel and Tourism Company: Since the end of COVID-19 and calming of political and war-related tensions, Pakistan has become one of the cheapest tourist destinations in the world. By the end of 2022, revenue in the Travel & Tourism market is projected to reach US$2,475m. So, if you are a travel junkie and you’re interested in starting a company for tourism, then this is a good time to start.
- Microfinance & Personal Loan Financer: As the construction sector of the country is booming, the demand for microfinance and personal loans is in high demand. As per the world bank development update, in April 2022, Pakistan settled the financing needs of a larger number of small enterprises and individuals (1 million borrowers vs. 3.8 million by banks).
There are so many other lucrative industries too… the best part about these is that they are ahead of the game and are constantly evolving.
Short-Term and Long-Term Investment Opportunities in Pakistan
Don’t want to run a full-fledged business and still want to earn high returns?
Invest in residential and commercial real estate, equities (e.g., stocks), cash and cash equivalents, fixed income (e.g., bonds), and currencies.
Here are some of the short and long-run investment opportunities in Pakistan.
Before reading further, note that earning good returns from investing in these asset classes requires patience and perseverance.
First, let’s have a look at the options and respective returns; later on, we will explain the differences between them.
| Investment Type | Return on Investment |
| Real Estate | Location. Property Condition. Curb Appeal. Availability of Facilities. Security. Real Estate Supply and Demand. |
| Stocks | Industry performance Investor sentiment Interest rates Inflation/deflation Economical and political policies / shocks |
| Gold | Currency fluctuations Geo-political factors Inflation Interest rate Supply and demand of gold |
| Forex | Inflation Rates. Changes in market inflation Interest Rates. Recession Current Account/BoP. Government Debt. Terms of Trade. Political Stability & Performance. Speculation. |
| Bonds | Depends on the prize money |
Investing in short-term plans comes with no or minimal risk; you would not lose your principal amount. The best thing about short-term yet low-returns investments is that they are usually highly liquid, which means you have access to your money whenever you may need it.
In contrast, higher-risk investments offer the potential for higher yet long-term returns. However, with these investment options, the chances of small losses are a bit high.
So, the pro tip is… if you want to protect your capital and maintain a better flow of income, short-term investments are great. And, for growth opportunities and more attractive returns, high-risk investments are the best.
For now, the best investment opportunity in Pakistan is real estate, which is booming significantly.
Which type of startup is best in Pakistan?
It’s tough to say which startup is the best in Pakistan because every industry has its own challenges and struggles. Some of the top-ranking industries of Pakistan are IT, BPO, retail, hospitality, tourism, real estate, and manufacturing.
The types of businesses you should invest your fortune in depend on available resources and existing knowledge.
If you have enough resources, then look into industries like manufacturing or IT, or else look for the ones that require less capital, such as retail or BPO.
Bear repeating, Pakistan is growing, and so is its economy; the competition in industries is getting tough, which means there will always be room for new businesses to enter.
The only bet is to provide value-added services at a lower cost than the competitors.
Good Luck!
