To Belarus, Zimbabwe is one of priority trade and economic partners not only in Africa but also worldwide. Co-operation is ongoing in many areas, including trade, education, customs regulation, and a joint contractual framework is taking shape. Today we will talk about how to open a company in Zimbabwe. By learning more of this African country’s legal framework and following the below recommendations entrepreneurs stand better chances to successfully launch and develop business here.
Most common organization and statutory forms of business
Various legal structures are available in Zimbabwe for doing business, governed by the Companies and Other Business Organisations Act No. 4 of 2019 (COBE). The most common form includes private limited liability company (PLC), which is popular with SMEs due to the limited liability protection and professional image it gives to businesses.
A public limited company status is also in demand, suitable for larger businesses looking to raise capital from general public. Other forms available include limited guarantee companies (most commonly used for non-profit organisations), cooperative companies (geared towards membership-based businesses), private business corporations (PBCs), favoured by small businesses and professionals for their flexibility and limited liability, and foreign companies usually set up by international entities to do business in Zimbabwe.
Registering a company with a foreign founder
Foreign companies wishing to incorporate in Zimbabwe need to comply with certain requirements under section 241 of the COBE Act. These requirements include providing certified copies of the founding documents (e.g. memorandum and articles of association) translated into English, if necessary. In addition, a list of directors with their full names, residential addresses and nationality, as well as information on the principal officer in charge of the business in Zimbabwe, must be submitted. In addition, forms CR5 (principal place of business), CR6 (particulars of directors) and CR25 (list of documents submitted) must be filed. It is important to note that at least one director must be resident in Zimbabwe and act as the local representative of the company authorised to receive legal notices and perform administrative functions.
Costs and government fees payable in the incorporation process
The cost of floating a company in Zimbabwe depends on the type of business entity. For example, checking the uniqueness of the name costs $5, registering a private limited company costs $40 and registering a public limited company costs $80. Private for-profit corporations can be registered for $20. Foreign companies pay extra fees ranging from $20 to $700 depending on the nature of their business (e.g., for the registration of articles of association, annual reports or prospectuses).
Opening a bank account
To open a bank account in Zimbabwe, incorporation documents such as a certificate of incorporation or private business corporation certificate, memorandum and articles of association, and a tax clearance certificate are required. Additionally, proof of identity and proof of residence of all directors are required. Some banks, such as Nedbank and Standard Bank, may request additional documents including company profile and financial statements.
Accounting procedures and available tax regimes
All companies in Zimbabwe are held to follow International Financial Reporting Standards (IFRS) and maintain accurate financial records. Tax compliance, including corporation tax, VAT and other applicable taxes, is monitored by the Zimbabwe Revenue Authority (ZIMRA).
How to obtain a registered office
Companies that do not have their own offices can rent a registered office address, which costs about $30 per year. This address is used to receive official notices and fulfil legal requirements.
Industries under licensing requirements or restricted for foreign founders
Some industries in Zimbabwe require special licences or have restrictions on participation of foreign founders. For example, professional services require mandatory registration with regulatory bodies such as the Law Society of Zimbabwe for legal practitioners, the Institute of Chartered Accountants of Zimbabwe for accountants and the Engineering Council of Zimbabwe for engineers. Sectors reserved for local ownership include retail and wholesale trade, hairdressing services, real estate, bakeries, transport services and artisanal mining.
Popular business sectors in the country
Zimbabwe's key economic sectors offer a wide range of opportunities to entrepreneurs. Agriculture remains the backbone of the country's economy, while mining attracts attention due to rich deposits of diamonds, gold, nickel and platinum. The manufacturing industry is centred on textiles, food processing and chemicals. Tourism draws visitors due to attractions such as Victoria Falls. The financial sector supports a growing economy and handicrafts have a significant export potential.
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