Doing business in Zimbabwe involves several key steps, particularly for foreign investors. The Zimbabwe Investment and Development Agency (ZIDA) is a “one-stop shop” aimed at streamlining the investment process.
Here is a general guide on how to establish a business in Zimbabwe:
1. Initial Planning and Business Structure
- Choose a Business Structure: The most common options for foreign investors are a Private Limited Company (PLC) or a Branch Office of an existing foreign company.
- Private Limited Company (PLC): This is the most popular choice, providing limited liability to shareholders. It requires a minimum of two directors and at least one shareholder (who can be the same people).
- Branch Office: Allows an already established foreign company to operate in Zimbabwe without incorporating a separate entity.
- Determine Local Presence: For a Private Limited Company, at least one director must be “ordinarily resident” in Zimbabwe, according to one source.
2. Company Registration (Registrar of Companies)
The registration process is typically done through the online portal (CIPZ) and involves two main stages:
- Name Search and Reservation:
- Propose at least 3-5 unique company names (online).
- The Registrar of Companies will search to ensure the name is not already in use and reserve the approved name for a specified period (usually 60 days).
- Incorporation and Registration:
- Prepare Documents: This generally includes the Memorandum and Articles of Association (or Constitution/Charter for a foreign company), a statement of the company’s objectives, and statutory forms:
- CR5: Company’s Registered Office Address.
- CR6: Details of directors and principal officer (at least one resident director is often required).
- CR14: Particulars of Directors and Secretaries.
- Submission: Lodge the required documents and pay the prescribed fee.
- Issuance of Certificate: Upon approval, the Registrar issues a Certificate of Incorporation (for a PLC) or a Certificate of Registration of a Foreign Company.
- Prepare Documents: This generally includes the Memorandum and Articles of Association (or Constitution/Charter for a foreign company), a statement of the company’s objectives, and statutory forms:
3. Obtain a ZIDA Investor License (For Foreign Investors)
- Application: International and local companies may apply for a General Investment License with the Zimbabwe Investment and Development Agency (ZIDA).
- Benefits: This license offers protections under the ZIDA Act (2020) and provides access to the One Stop Information Services Centre (OSISC), which assists with necessary permits and approvals, including visas.
4. Post-Registration Compliance
Once your company is registered, you must comply with other regulatory and tax requirements:
- Tax Registration (ZIMRA):
- Obtain a Tax Identification Number (TIN) from the Zimbabwe Revenue Authority (ZIMRA).
- Register for Value Added Tax (VAT) if your annual taxable turnover is likely to exceed the set threshold (e.g., US$25,000.00 equivalent).
- Register as an employer for Pay As You Earn (PAYE) if you plan to hire staff.
- Apply for a Tax Clearance Certificate (ITF 263) after meeting initial obligations to avoid a 30% withholding tax on payments received.
- Social Security Registration (NSSA):
- Register with the National Social Security Authority (NSSA) if you intend to employ staff, as contributions for both the employer and employees are mandatory.
- Corporate Bank Account:
- Open a corporate bank account with a local bank using your company’s registration documents and TIN.
- Reserve Bank of Zimbabwe (RBZ):
- You may need to register with the RBZ for foreign investment approval, which is crucial for matters like foreign exchange access and the repatriation of earnings.
- Other Permits/Licenses:
- Depending on your sector (e.g., mining, manufacturing, finance), you will need specific operating licenses or permits from the relevant Ministries or regulatory bodies (e.g., Environmental Management Agency).
5. Immigration and Employment
- Residence and Work Permits: Expatriate staff must obtain a valid work permit and a residence permit (Temporary Employment Permit for less than six months).
- Local Hiring Policy: While there is no restriction on the number of foreigners an investor can employ, the government encourages the employment and training of Zimbabweans. You may be required to motivate that a particular skill cannot be sourced locally.
Key Investment Environment Considerations:
- Investment Policy: The government actively seeks Foreign Direct Investment (FDI) to stimulate economic growth, and the ZIDA Act is designed to streamline the process. Foreign investors are generally free to invest in most sectors, though certain areas may be reserved for local citizens.
- Currency: The official currency is the Zimbabwean Dollar, but the country accepts trading and often conducts business in other currencies, most commonly the US Dollar.
- Repatriation of Funds: Policies govern the remittance of dividends and branch profits, often subject to a percentage of after-tax profits and non-resident shareholder tax. Exchange control approval from the RBZ is necessary.
Disclaimer: This is a general guide. Due to the dynamic nature of Zimbabwe’s economic and regulatory environment, it is highly recommended to seek professional advice from a local legal and corporate consultancy firm to ensure compliance with the most current laws and regulations.