Registration of a company in Zimbabwe

Company registration in Zimbabwe is of interest not only to exotic travel lovers but also to entrepreneurs seeking to develop promising markets and expand the scope of their activities. There is a powerful mining industry in the country, gold and diamonds are being developed in rich mines and the level of social and economic stability is impressively high, as for the African state.

Major Types of Legal and Business Presence

If you wish to set up your business presence in Zimbabwe, this can be accomplished in one of these most widespread forms:

• Private Business Corporation – this legal form is suitable most for small and medium enterprises. The liability of its members is limited to the amounts of contributions made. The number of members of such a corporation is also limited to 20 and the management is conducted by such members directly. The legal entity may be established and act perpetually. Also, it is easy to transfer shares without observing lots of legal formalities.
• Private Limited Company – this corporate entity is more complicated to register but it is suitable for running a large business. The entity is legally separated from its members whose number is limited to 50 maximally. Such members bear the financial risks for the outcomes of the entity’s operation only within the amounts contributed to such an entity. Specific restrictions on the transfers of shares are imposed in the case of this corporate entity. They should be reflected in the company’s statutory documents. This enterprise is more complicated to maintain than the previous one, but this is still not related to extremely burdensome legal formalities. The great advantage of this business form is that the minimum required amount of statutory capital starts from USD 1.
• Representative Office – an option suitable for local business market investigations only without involving in trading activities. It is easy to register such an option and maintain it in Zimbabwe. There are no requirements concerning capital investment in this case.

Registration Requirements and Steps

Company registration in Zimbabwe is a procedure for which you are required:

1. Defining your key commercial priorities you wish to realize through a legal entity in Zimbabwe.
2. Picking and verifying a legal name for a future enterprise. The first thing that should be done by the potential owner of a future Zimbabwean firm is to officially record its name. It is checked, reserved for 30 days, after that it can be extended for another period.
3. Arranging a business office for the future entity.
4. Collecting information about the future founders and managers of an enterprise.
5. Submit a charter, memorandum, and data on the appointed directorate and secretaries to the Register of Companies - second originals or notarized copies shall be suitable.
6. Pay a registration fee. It is also necessary to pay stamp duty - it depends on the capital amount, therefore, entrepreneurs tend to make it small.
7. Registering with the tax authorities where the company will transfer PAYE, income transfers, and VAT - by providing the charter, memorandum and identity cards of the responsible employees, the owner will receive the number and own fiscal schedule. It should be noted that registering in the Tax Administration dealing with VAT issues - this is mandatory for companies with a turnover of 60 thousand dollars (the rest can be registered voluntarily).
8. Registration with the Social Insurance and Pension Services and the Human Resources Development Fund (deductions from salaries will be used to train employees).
9. Placing in the press information about filing applications for registration of trade and business licenses.
10. Applying for the licenses registration in a respective Office in the capital of the country, enclosing proof of the notices released in the press. Further, the Office applies to the police, receives a report about the applicant and persons who will be responsible for the company, and control its real estate. The procedure takes about a month, and then the production and offices of the company will be checked by the Licensing Service.

Legal and Regulatory Framework

The local legal framework may be considered well advantageous for doing business. Setting up a new enterprise is not time-consuming and is not related to substantial transactional costs. Maintaining a local company requires following certain legal formalities but such are not bureaucratized at the moment. Major legal acts in the area of doing business are the Companies Act and the Private Business Corporations Act. Major local business regulatory bodies are the Ministry of Finance and Economic Development, Zimbabwe Revenue Authority, and the Reserve Bank of Zimbabwe.

Advantages of the Jurisdiction

Company registration in Zimbabwe may be rewarding taking into account these potential benefits the jurisdiction offers:

• five-year tax holidays;
• duty-free import of raw materials and capital equipment for use in certain areas;
• an exemption from tax on capital gains arising from the sale of property, part of which is investments in EPZs (Export Processing Zones).
• a company establishing in Zimbabwe is inexpensive and takes up a minimum of time (up to a week);
• there is no need for a person coming into the country, you can act through representatives;
• there are no requirements for the minimum permissible amount of capital or its mandatory payment;
• any person, regardless of citizenship, residence, or abiding place, can be founders, participants, and directors of organizations;
• information on the beneficiaries is not disclosed, there is no public access to the registers.

Tax System of Zimbabwe

Company formation in Zimbabwe is associated with these tax highlights for running a business there:

• Corporate income tax rate – 24.72 %
• Personal income tax rate - 41.20 %
• Value-added tax rate– 14.5 %
• Withholding tax rates – (i) dividends – 15% (ii) interests – 0 % (iii) royalties – 15%
• Capital gains tax rates – (i) corporate – 20 % (ii) personal – 20 %

How Prifinance Specialists May Help You

A bureaucratic routine can become a serious obstacle for business, but Prifinance can take such legal tasks with your minor required involvement. Our employees will help in establishing a company in Zimbabwe so that you can start doing business promptly and in compliance with all applicable rules. We offer company incorporation and bank account opening services in Zimbabwe and worldwide.