Ever wondered how you would disinvest your business interest in Zimbabwe? Be it proceeds from a sale of shares, proceeds from a sale of immovable property, a sale of an instrument on the debt capital market or a loan repayment?
Firstly, your investment must be registered with the applicable authority for such investment, for example if it is a loan being rendered to a Zimbabwean entity from a foreign entity, then such a loan must be registered with the Reserve Bank of Zimbabwe. If the investment is in the form of a share in a Zimbabwean entity, then the investment must be registered with the Zimbabwe Investment Authority. It is crucial to note that registration of the investment is critical as this is the only way the disinvestment can be facilitated.
Upon the moment of disinvestment, you approach the Reserve Bank of Zimbabwe through a Zimbabwean registered a commercial bank and place a notification for the remittance of the proceeds of the investment to your international bank.
Points to consider
However, due to the foreign currency deficit being experienced by the country, the Reserve Bank of Zimbabwe has placed all foreign currency remittances on a remittance priority list. Disinvestments are listed under priority level one. Therefore, once the payment proceeds have been placed on the que for payment, you will have to wait until the registered commercial bank which made the application for remittance has enough foreign currency to issue the payment to your international bank.
The remittance priority is as shown below for guidance:
Priority one (high)
- Net Exporters who import raw materials or machinery to aide them to produce and generate more exports;
- Non-exporting importers of raw materials and machinery for local production (value addition) that directly substitute import of essential finished goods;
- Imports of critical and strategic goods such as basic food stuff and fuel, health and agrochemicals granted these goods are not available locally;
- Repayments of offshore lines of credit procured to fund productive activities;
- Payments for services not available in Zimbabwe;
- Foreign investment (Capital disinvestments, profits and dividends).
Priority two (medium)
- Bank borrowing clients in the productive sector who engage in critical and strategic imports
Priority three (low)
- University and college fees.
- Cash depositing clients in the retail and wholesale service industry. The customers generate cash which can either be recycled for local use or repatriated to replenish Nostro accounts.
- Other borrowing clients who have engaged in the importation of non-strategic goods.
Priority four (no priority)
- Capital remittances from disposal of local property
- Capital remittances for cross-border investments
- Funding of offshore credit cards
- Importation of trinkets, low local content consumer goods and/ or goods readily available in Zimbabwe including non-commercial vehicles, maheu, bottled water, tomatoes, vegetables.
- Payments for services available in Zimbabwe