What investors need to know
Regulatory and compliance is pertinent to every investment and the same is applicable to an investment in Zimbabwe. As an investor in Zimbabwe, the first step is to incorporate a local vehicle, which can take the form of a private company, a partnership, a foreign company or a special purpose vehicle. The corporate structuring of an investment is key, and investors may want to look at incorporating a holding company offshore, whose subsidiaries will be situated in Zimbabwe. In this regard, investors are encouraged to look to destinations which have Double Tax Agreements and Investment Treaties with Zimbabwe as this offers the investor added protection and commercial viability to their transaction.
Zimbabwe is subject to exchange control by the Reserve Bank of Zimbabwe (“RBZ”). Investors are permitted to bring an unlimited amount of foreign currency into Zimbabwe and are permitted to open up to (5) foreign currency accounts denominated in United States Dollars (USD/US$), South African Rand (ZAR), Botswana Pula (BWP), Pound Sterling (GBP) and Euros (EUR). Where the funds are being brought in as a loan, the threshold for such external loans which does not require prior approval from the RBZ is US$ 20 million (twenty million United States Dollars).
Investors are also required to obtain an investment licence from the Zimbabwe Investment Authority, which affords the investor full protection of the law, certain investor incentives, tax benefits and facilitation such as the repatriation of funds invested in Zimbabwe.
The Indigenisation laws were amended significantly in March 2018, providing investors with the autonomy to invest in, form, operate, and acquire ownership or control of any businesses apart from those businesses operating in the “designated extractive sectors” and the “reserved sectors”.
The designation of special economic zones (“SEZ”) has been a pertinent enactment for Zimbabwe and any person who wishes to obtain approval to invest in an SEZ, or for his / her business to be approved as an activity in an SEZ may submit an application to the Special Economic Zones Authority who will consider the SEZ status of the investment based on certain key considerations.