Company registration in Zambia

Zambia is one of the African countries that are growing fast. The jurisdiction has developed mining, agricultural, and tourism sectors. The country also encourages foreign investments. If you wish to create a company in Zambia or buy an existing one, these options are most common and promising.

Major Forms of Legal and Business Presence

If you would like to form a company in Zambia, the next registration options are available:

• Private Company Limited by Shares – a business entity that can be incorporated by two or more persons whose liability is restricted to the amounts unpaid for their shares. This entity is not allowed to publicly offer its shares and transfer such freely to third parties. It should be noted that a maximum of 50 shareholders is allowed for this type of entity. The minimum amount of chartered capital for it constitutes K 15,000.
• Public Company Limited by Shares – an entity that is allowed to offer its shares to the general public and transfer its shares freely. The holders of such shares don’t bear liability in excess of the funds invested in such shares. The minimum amount of chartered capital for it is K 1,000,000.00.

Registration Requirements and Steps

If you wish to open a company in Zambia, the following basic registration steps are necessary to pass:

1. Defining your commercial priorities you wish to realize through a local entity.
2. Choosing and checking a business name for a future company.
3. Collecting details about the company's founders, beneficiaries, and officials.
4. Selecting a registered address for an enterprise.
5. Drafting statutory and registration documents.
6. Submitting the required registration package to the registrar.
7. Registration for tax and social security purposes.
8. Opening a corporate bank account.
9. Obtaining licenses and special permits (required for certain types of regulated activities only).

Legal and Regulatory Framework

The local framework is advantageous for non-residents and is not associated with restrictions, except for certain sectors of the economy and cases only. For instance, owning land in Zambia requires getting a respective license. Getting a license is also required for certain regulated types of activities, like banking, insurance, financial, and others.

The principal legal acts in the area of doing business are the Registration of Business Names Act and the Companies Act. Major legal authorities are the Patents and Companies Registration Agency, the Zambia Revenue Authority, the Zambia Development Agency, and the Securities and Exchange Commission of Zambia.

Tax System of Zambia

If you intend to buy a company in Zambia or incorporate a new one, the following tax highlights should be taken into consideration also:

• Corporate income tax rate – 35%
• Personal income tax rate – 37.5%
• Valued-added tax rate – 16%
• Withholding tax rates (for non-residents) – (i) dividends – 20% (ii) interests – 20% (iii) royalties – 20%
• Capital gains tax – not applicable

Advantages of the Jurisdiction

An option of company registration in Zambia may be beneficial for your business in view of the next advantages this jurisdiction offers:

• The process of company registration is straightforward.
• Special economic zones are available in the country.
• Foreign investors generally should pay comparatively low employment-related costs.
• Tax exemptions and incentives are available to foreign businessmen.