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Zimbabwe

1. Business formation and regulation

  1. Private limited companies (Ltd):This type of company:
  • restricts the right to transfer its shares;
  • limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment and have continued, after the determination of that employment, to be members of the company;
  • prohibits any invitation to the public to subscribe for any shares or debentures of the company; and
  • is not permitted to have more than fifty shareholders.
  1. Public Limited Company (PLC):
  • no restriction on the maximum number of shareholders or the right to transfer its shares freely;
  • it can offer its shares and debentures to the public;
  • must appoint a Company Secretary who is a professional with requisite experience.
  1. Companies limited by guarantee (CLG):
  • a company having no share capital; and
  • the liability of its members is limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
  1. Co-operative Company (CC)
  • restricts the right to transfer its shares;
  • provides that its ordinary shares shall be of one class only; and subject to Act, fixes a limit to the number of shares which may be held by any one member;
  • regulates the voting rights of its members;
  • limits the dividend which may be paid on its shares to a rate not exceeding ten per centum per annum on the amounts paid up thereon; and
  • provides for the distribution of a part or the whole of its profits amongst its members on the basis of certain or all of their business transactions with the company.
  1. Foreign Company (FC)
  • must have least fifty one percent of the shareholding in every company operating in Zimbabwe only provided that operations are confined to platinum and diamond-mining companies only;
  • restricts the right to transfer its shares;
  • limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment and have continued, after the determination of that employment, to be members of the company;
  • prohibits any invitation to the public to subscribe for any shares or debentures of the company;
  • is not permitted to have more than 50 shareholders;
  • every foreign company shall, within one month after the 1st January in each year, lodge with the Registrar for registration a return in the prescribed form containing particulars of the nominal and issued share capital of the foreign company as at that date and such other particulars as may be prescribed;
  • every foreign company shall in every year make out a balance sheet and profit and loss account and, if the foreign company is a holding company, group accounts, in such form, and containing such particulars and including such documents as under this Act;
  • if any foreign company ceases to have a place of business within Zimbabwe, it shall, within one month of such cessation, give written notice of the fact to the Registrar, and as from the date on which the notice is so given the obligation of the foreign company to deliver to the Registrar any document, save any document which should have been delivered prior to such cessation, shall cease.
  1. Private Business Corporation (PBC)
  • can accommodate sole traders;
  • members are the same as shareholders or owners;
  • companies cannot be shareholders or hold a member’s interest in a PBC, only individuals can be members;
  • articles of association are not required;
  • offers limited liability to its owners; and
  • has a legal persona of its own apart from its owners.
  1. 7. Partnership/ Association/ Joint Ventures/ Syndicate
  • shall not exceed more than twenty members;
  • no association of persons formed after the 1st April, 1952, for the purpose of carrying on any business that has for its object the acquisition of gain by the association or by the individual members thereof shall be a body corporate, unless it is registered as a company under this Act or is formed in pursuance of some other law, Letters Patent or Royal Charter;

all members share both profits and liabilities.

  1. Private limited companies (Ltd):This type of company:
  • restricts the right to transfer its shares;
  • limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment and have continued, after the determination of that employment, to be members of the company;
  • prohibits any invitation to the public to subscribe for any shares or debentures of the company; and
  • is not permitted to have more than fifty shareholders.
  1. Public Limited Company (PLC):
  • no restriction on the maximum number of shareholders or the right to transfer its shares freely;
  • it can offer its shares and debentures to the public;
  • must appoint a Company Secretary who is a professional with requisite experience.
  1. Companies limited by guarantee (CLG):
  • a company having no share capital; and
  • the liability of its members is limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
  1. Co-operative Company (CC)
  • restricts the right to transfer its shares;
  • provides that its ordinary shares shall be of one class only; and subject to Act, fixes a limit to the number of shares which may be held by any one member;
  • regulates the voting rights of its members;
  • limits the dividend which may be paid on its shares to a rate not exceeding ten per centum per annum on the amounts paid up thereon; and
  • provides for the distribution of a part or the whole of its profits amongst its members on the basis of certain or all of their business transactions with the company.
  1. Foreign Company (FC)
  • must have least fifty one percent of the shareholding in every company operating in Zimbabwe only provided that operations are confined to platinum and diamond-mining companies only;
  • restricts the right to transfer its shares;
  • limits the number of its members to fifty, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were while in that employment and have continued, after the determination of that employment, to be members of the company;
  • prohibits any invitation to the public to subscribe for any shares or debentures of the company;
  • is not permitted to have more than 50 shareholders;
  • every foreign company shall, within one month after the 1st January in each year, lodge with the Registrar for registration a return in the prescribed form containing particulars of the nominal and issued share capital of the foreign company as at that date and such other particulars as may be prescribed;
  • every foreign company shall in every year make out a balance sheet and profit and loss account and, if the foreign company is a holding company, group accounts, in such form, and containing such particulars and including such documents as under this Act;
  • if any foreign company ceases to have a place of business within Zimbabwe, it shall, within one month of such cessation, give written notice of the fact to the Registrar, and as from the date on which the notice is so given the obligation of the foreign company to deliver to the Registrar any document, save any document which should have been delivered prior to such cessation, shall cease.
  1. Private Business Corporation (PBC)
  • can accommodate sole traders;
  • members are the same as shareholders or owners;
  • companies cannot be shareholders or hold a member’s interest in a PBC, only individuals can be members;
  • articles of association are not required;
  • offers limited liability to its owners; and
  • has a legal persona of its own apart from its owners.
  1. 7. Partnership/ Association/ Joint Ventures/ Syndicate
  • shall not exceed more than twenty members;
  • no association of persons formed after the 1st April, 1952, for the purpose of carrying on any business that has for its object the acquisition of gain by the association or by the individual members thereof shall be a body corporate, unless it is registered as a company under this Act or is formed in pursuance of some other law, Letters Patent or Royal Charter;

all members share both profits and liabilities.

Key Regulatory Agencies

There are several government agencies that regulate and control Zimbabwe’s business environment and operations. These agencies, typically established by a legislative act, are responsible for setting the standards for doing business in Zimbabwe and operating in a specific sector or industry and for enforcing those standards.

We have summarized below some of the key regulatory agencies that are relevant to a Zimbabwean company with foreign participation.

 

 

Agency

Function

Reserve Bank of Zimbabwe (RBZ)

The Reserve Bank of Zimbabwe (RBZ) is the primary institution responsible for the regulation and supervision of banks.

The Deposit Protection Corporation (DPC)

The Deposit Protection Corporation came into being through Act 7 of 2010 is tasked with the responsibility of protecting depositors thereby ensuring safety and soundness of the banking

system by preventing bank runs.

The Securities Commission

It governs the regulation of securities services in Zimbabwe to include securities exchanges, Central Securities Depositories (CSDs) and the respective members, misuse of inside information, and improper trading practices.

ZimTrade

ZimTrade is the national trade development & promotion organization whose mandate is to Energize Zimbabwe’s Export Growth. ZimTrade’s Services include market Intelligence, trade information, export development (Capacity Building & Coaching), export promotion and systemic Competitiveness (Advocacy & Trade Facilitation. It is a unique joint venture between the Private Sector and the Government of Zimbabwe.

Zimbabwe Investment Authority (ZIA)

ZIA is the corporate legal body responsible for promoting and facilitating both foreign direct investment and local investment in Zimbabwe.

Zimbabwe Revenue Authority (ZIMRA)

ZIMRA is the body responsible for collecting taxes and other revenue streams for the government in Zimbabwe.

Procurement Regulatory Authority of Zimbabwe (PRAZ)

The mandate of the Authority is to supervise public procurement proceedings to ensure transparency, fairness, honesty, cost-effectiveness and competition as required by Section 315 of the Zimbabwean Constitution.

Zimbabwe Energy Regulatory Authority (ZERA)

ZERA is a body corporate established in terms of the Energy Regulatory Authority Act [ Chapter 13:23] of 2011. It is mandated to regulate the entire energy sector in Zimbabwe in a fair, transparent, efficient and cost-effective manner for the benefit of the consumers and energy suppliers.

Department of Deeds Company & Intellectual Property ((DCIP)

To register, protect and facilitate easy access to information on proprietary rights in land, formal business organizations and intellectual property through an effective regulatory system in a manner that seeks to enhance economic growth.

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