Owner structure (OS) is an imperative feature of a firm and firm performance (FP). Recent studies have debated the effect of OS and FP around the world. Studies argue that OS is one of the important factors of decision making since principals expect wealth maximization while agents try to increase their personal gains. However, investor protection (IP) adds to the decision making with regards to OS since IP ensures that shareholders finds shall not be expropriated and that IP enhances the trust of all stakeholders and help in making informed decision. Based on this premise, we investigate the effect of OS on FP in the presence of IP. Using secondary data from Pakistans capital market for the years 2008-2015 and applying panel data techniques, we find that not only OS affects FP but the interaction term of IP and OS also has a significant on FP. These results indicate that capital markets in developing countries rely more on OS since it ensures that managers do not expropriate investors funds and thus make informed decisions.