Many business people living in the country, including those in Diaspora and foreign investors wonder about what they need to start a business in the Zambian economy.
Some of the questions asked are normally entwined in political, economic and investment opportunities that exist. These and many other questions are very important for an investor and they need to be asked before one plans or commits their resources to invest in any economy.
Consequently, there are a number of requirements that a local investor and foreigner needs to undertake before doing business in Zambia. The Companies Act Cap 388 governs the registration of companies in Zambia. Registration is done by the Patents and Companies Registration Agency (PACRA).
Prospective business people are required to submit an application for name clearance in order to avoid use of an existing or similar name, an application for incorporation by subscribing the names of directors and secretaries of the company, articles of the company, statutory declaration in compliance with the Act.
Other requirements are signed consent to act as director or secretary by each person named in the company’s application and a declaration of guarantee, if a company is limited by guarantee.
The minimum share capital of a company is K5,000. The law requires that half the directors of the company be resident in Zambia and all companies are required to submit annual returns to the Registrar of Companies within three months after the end of the financial year or one month after the annual general meeting if it is held within three months after the financial year.
Furthermore, the Companies Act allows foreign companies to register with the Registrar of Companies within 28 days of setting up or acquiring an established place of business.
In the same vein, the Zambia Development Act No. 11 of 2006 provides for investment incentives and investment guarantees to investors that invest a sum of not less than $500,000 in a priority sector. The business should either be in a rural area, multi facility economic zone (MFEZ) or an industrial park.
Applications for a certificate of registration should be submitted to the Zambia Development Agency, a statutory body mandated by government to foster economic development through the promotion and facilitation of investment and international trade.
The documents required to support an application for an investment certificate include a copy of certificate of incorporation, issued by the Registrar of Companies, certificate of share capital, official list of shareholders / directors and proof of finance that should include audited financial statements, certificate of deposit or latest bank statement.
Others are a detailed business plan and proof of having secured a place or land to operate from such as lease agreement, title deed or letter of offer. However, applications for a certificate of registration in some sectors of the economy require proof that applications for subsidiary permits from relevant institutions or ministries have been lodged.
In terms of the political environment, Zambia has been a sanctuary of peace for more than 50 years with six successive presidents who have all been democratically elected into office. There is no country in Africa that can beat Zambia’s track record on peace and tranquility from the time the country became independent.
Zambia’s economic growth has been steady in the recent past. The gross domestic product (GDP) expanded by five percent in 2015 from the previous year and the GDP Annual Growth Rate at an average of 2.97 percent from 1961 until 2015.
In terms of available investment opportunities, Government through ZDA has focused its energies on attracting foreign direct investment (FDI) and stimulating local direct investment (LDI) in growth oriented sectors with potential to propel economic growth. These include agriculture and agro-processing, manufacturing, tourism and energy.
Further, ZDA is promoting and facilitating the growth of non traditional exports (NTEs) into the neighbouring countries such as the Democratic Republic of Congo, Zimbabwe, Angola and the regional market which include Southern African Development Community (SADC), Common Market for Eastern and Southern Africa (COMESA) and the European Union market.
Finally, the agency is facilitating MSME growth through capacity building, linkages to various service providers and provision of an enabling business environment, particularly for Zambians undertaking local direct investment (LDI). All these initiatives by Government through ZDA make Zambia a conducive place to start a business that continues to attract significant investments that create wealth and jobs for the benefit of the Zambian people.
For more information
Contact the Manager
Communications and PR
ZPA House, Nasser Road
P O Box 3081
Telephone 0211 229240