Amendments to Zimbabwe's controversial Indigenisation and Economic Empowerment Act, Chapter 14:33 (the "Act"), were gazetted on 14 March 2018. These far-reaching changes, first announced in the 2018 Budget in December 2017, should pave the way for foreign investors wishing to establish operations in the country and boost the economy.

In terms of the amendments, with effect from the gazetted date, the Act, which previously required at least 51% of all public companies and any other business to be owned by indigenous Zimbabweans, will now only apply to companies involved in the diamond or platinum extractive industries and the economic sectors reserved for Zimbabwean citizens. Any other person is free to invest in, form, operate and acquire the ownership or control of any business without restriction.

In the diamond and platinum industry, at least 51% of the shares of designated extractive businesses shall be owned through an appropriate designated entity, ie, the Zimbabwe Mining Development Corporation, the Zimbabwe Consolidated Diamond Company and the National Indigenisation and Economic Empowerment Fund, with or without the participation of a community or employee share ownership scheme. Affected companies may apply to the minister (potentially, the Minister of Finance) to be assigned to administer the Act for permission to comply with the Act within an agreed period of time.

In respect of reserved sectors, only a business owned by a Zimbabwean citizen may operate in such sectors. Twelve sectors have been identified as "reserved sectors", including passenger transportation, retail and wholesale trade, grain milling, tobacco grading and packaging and advertising agencies. Previously, these sectors were reserved for "indigenous locals" instead of Zimbabwean citizens. Accordingly, under the amended Act, anyone of any race may qualify, provided they hold Zimbabwean citizenship.

Companies owned by foreigners that have been operating in reserved sectors prior to 1 January 2018, may continue to do so if, before 1 July 2018, they register with the Zimbabwe Revenue Authority and the National Indigenisation and Economic Empowerment Unit and open a local bank account. New foreign entrants to these industries may apply to the ministry for permission to operate in the reserved sectors, motivated by significant employment creation, skills transfer and the creation of sustainable value chains.

Businesses wishing to amend previously approved indigenisation implementation plans may, within 60 days of the commencement of the Act, submit a revised plan to the minister for approval.

President Emmerson Mnangagwa kept his promise of December 2017 that the Act will be significantly amended and the changes will be affected in the first quarter of 2018. These momentous changes suggest that he is serious about Zimbabwe being "open for business".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.