Doing business in Zambia as a foreign investor generally involves setting up a legal entity, registering with relevant authorities, and obtaining the necessary permits. The most common structure is a Limited Liability Company (LLC).
Here is a general outline of the process and key considerations:
1. Choose Your Business Structure
Foreign investors typically choose one of the following:
- Limited Liability Company (LLC) / Private Company Limited by Shares: This is the most popular choice.
- Requires a minimum of two shareholders and at least two directors (who can be of any nationality).
- One director must be resident in Zambia.
- Minimum share capital requirements may apply (e.g., ZMW 15,000 for a private company, or higher for other types).
- Public Limited Company (PLC): For companies looking to raise capital publicly.
- Branch Office: Considered a foreign entity, but must appoint a resident director or manager. Can be 100% foreign-owned.
- Representative Office: Only permitted to conduct research and marketing; cannot engage in income-generating activities. Must appoint a resident legal representative.
2. Company Registration (PACRA)
The main steps for company registration are handled by the Patents and Companies Registration Agency (PACRA):
- Name Search and Reservation: Check the uniqueness of your proposed company name through PACRA.
- Submission of Incorporation Forms: Submit the required forms (e.g., Application for Incorporation, Declaration of Consent to act as Director or Secretary, Declaration of Compliance) along with any necessary documents (e.g., Articles of Association, details of directors/shareholders).
- Receive Certificate of Incorporation: Once approved, PACRA issues the Certificate of Incorporation and Certificate of Share Capital.
3. Post-Registration Requirements
After incorporation, you need to register with other government agencies:
- Tax Registration (ZRA): Register with the Zambia Revenue Authority (ZRA) to obtain a Taxpayer Identification Number (TPIN). You will also register for other taxes like Value Added Tax (VAT) if your business meets the taxable thresholds.
- Social Security Registration (NAPSA): Register with the National Pension Scheme Authority (NAPSA).
- Open a Business Bank Account: You can open a corporate bank account after receiving your TPIN.
- Business Levy: Pay the required business levy to the local council.
4. Investment Certificate (Zambia Development Agency – ZDA)
Foreign investors who meet certain thresholds are encouraged to apply for an Investment Certificate from the Zambia Development Agency (ZDA).
- Investment Thresholds: An investor must typically pledge to invest at least US$250,000 (in cash or capital equipment) to be eligible for a registration certificate and certain non-fiscal incentives.
- Incentives: These may include investment guarantees, protection against state nationalization, and facilitation for immigration permits, secondary licenses, and land acquisition. Higher investment thresholds (e.g., US$500,000 or more in priority sectors) may qualify for fiscal incentives like reduced corporate tax rates, zero import duty on capital equipment, and accelerated depreciation.
5. Obtain Licenses and Permits
Depending on your industry and location, you will need various licenses and permits from relevant authorities:
- Trading/Business Permits: From the local council.
- Sector-Specific Licenses: For sectors like mining, finance, health, and manufacturing (e.g., an excise goods license from ZRA for manufacturers/importers of excisable goods).
- Environmental Clearance: From the Zambia Environmental Management Authority (ZEMA) for certain projects.
6. Immigration and Work Permits
Foreign owners and employees intending to reside and work in Zambia will need to apply for appropriate permits, such as an Investor Permit or Employment Permit, from the Department of Immigration. The ZDA can assist in facilitating these applications for investors.
It is highly recommended to consult with a local legal firm or professional business consultant in Zambia to ensure all legal and regulatory requirements are met.