Type of Government

Multi party democracy with a written constitution containing a bill of rights.

Forms of Business Organisation

  • Private or public limited liability company
  • Company limited by guarantee
  • Unlimited company
  • Foreign company branch
  • Partnership
  • Sole trader

Formation of a Business

Companies and foreign companies must be registered with the Registrar of Companies in Lusaka. Partnerships and sole traders trading under a name other than their own must register their business name. Various registrations are required for tax purposes, national provident fund and workmens compensation. Business licences are required for certain activities.

Taxation

Tax is levied on income from actual and deemed Zambian sources. The corporate and marginal personal tax rate is 35% but income from farming and the export of non- traditional exports is taxed at 15%. In addition there is:

  • value added tax (VAT) at a rate of 20%;
  • a withholding tax of 10% on dividends paid to residents and non-residents reducible to 5% or nil under certain double taxation agreements;
  • property transfer tax (in lieu of capital gains tax) at the rate of two and a half per cent on the sale of real property or shares not listed on the Lusaka Stock Exchange;
  • Zambia has double taxation agreements with most major industrialised and African countries.

Restrictions on and Incentives for Foreign Investment

Zambia welcomes foreign investment and virtually all business (other than certain types of retail trade, road haulage and building minerals) are open to foreign investors. There are no exchange controls and foreign currencies can be bought and sold at market-determined exchange rates.

Investors proposing to establish businesses in Zambia in the field of manufacturing mining and processing of gemstones, agriculture, transport, communications, construction, tourism and the provision of services are required to apply for an investment certificate. General incentives available to the holders of such certificates include, for rural enterprises, a reduction by one seventh in income tax for the first five years, various capital allowances, exemption from tax for five years on dividends from farming, and residence/work permits for qualifying investors. Special incentives which may be available include exemption from customs duty on the import of machinery and equipment.

Regulatory Environment

A number of pieces of legislation have recently been introduced (not all of which are yet operational) to regulate the securities industry, banking and financial services, environmental protection and competition.

The Lusaka Stock Exchange has recently published its listing requirements.

Intellectual Property

Protection is provided by statute for copyrights, patents, trademarks, and registered designs.

Registries

There are public registries for lands and deeds, mining titles, companies, business names and intellectual property rights.

Tariffs

Import tariffs and direct controls such as import permits exist but such permits are issued by commercial banks. Customs duties generally range between 20% and 40% plus VAT but lower duties are payable on goods coming from fellow members of the Preferential Trade Area.

Membership of International and Regional Organisations

Common Market for East and Southern Africa, the Preferential Trade Area, the World Bank, International Monetary Fund, Organisation of African Unity, United Nations Organisation, the British Commonwealth and a signatory to the Uruguay Round of GATT.

Legal Disclaimer: This information is not intended for use without professional advice


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