Zimbabwe: Commercial Law In Zimbabwe

Last Updated: 21 December 2018
Article by Adams & Adams


Zimbabwe is a landlocked independent republic located in the southern part of the African Continent, bordered by Zambia to the northwest, Mozambique to the north and east, South Africa to the south, Botswana to the southwest, and with Namibia sharing a border post on the western tip of Zimbabwe.

Area: 390 757 km2

Population: 12.5 million

Capital: Harare

Currency: Zimbabwean Dollar

GDP: USD 4.4 billion (2010)

Internet domain: .zw

Languages: English (official language), Shona, Ndebele

Working week: Monday - Friday

Exports: Tobacco; gold; chromium; ferro alloys; cotton; platinum

Imports: Machinery and transport equipment; chemicals; fuels; food products


Business Vehicles

There are two forms of companies commonly used by foreign investors:

  • Private Limited companies.
  • Public limited companies.

A public company may seek Zimbabwean Stock Exchange and offer shares to the public. The minimum number of shareholders is one and there is no maximum.

Private companies may not offer shares to the public and are not generally required to file annual financial reports with the Registrar of Companies. The minimum number of shareholders is one and the maximum is 50.


The following steps should be taken in order to incorporate a company:

  • A name for the company must be reserved with the Chief Registrar of Companies. The reservation shall be valid for 30 days and may be extended for another thirty days. The process of reserving a company name takes approximately two weeks.
  • Once the company name has been reserved, a memorandum and articles of association are required to be filed together with details of the registered office of the company.
  • Details regarding directors and shareholders including their full names, identity numbers, nationality, and residential address are required. It takes approximately two to four weeks for this process to occur.

Regulatory reporting

It is required in Zimbabwe to hold Annual General Meetings (AGM). An AGM must be held each year, within six months of the financial year end and within fifteen months of the previous annual AGM. A public company must file its annual financial report with the Registrar of Companies, where it is open to public scrutiny. Public companies are required to be audited.

Share capital

The minimum share capital required to incorporate a company is USD 2 000.


The minimum number of directors required for a company is two. Directors are appointed in the first instance as per the memorandum and articles of association and, thereafter by shareholders at the AGM. Companies are required to have at least 1 resident director. The company's secretary must also be a resident.

A public officer who is a Zimbabwean resident must also be appointed.

Are local shareholders required?

The Zimbabwean government introduced the Indigenisation and Economic Empowerment Act in 2007. In terms of the Act, all businesses, including public companies with an annual turnover above USD 500 000, must have a minimum 51% share ownership by indigenous Zimbabweans.

Branch company

Foreign companies are allowed to form branches in Zimbabwe. Approval by the Minister of Justice is required for this by way of an application. Once approved by the Minister, a branch license will be issued by the Registrar of Companies.

A foreign representative office can also be formed in Zimbabwe. The application process is similar to that of a branch office mentioned above. The representative office is however, not permitted to conduct any business to make profit.



  • Competition Act (Chapter 14:28).

The Act is enforced by the Competition and Tariffs Commission, based in Harare.


A merger is notifiable where the following thresholds are met:

  • The merging parties' combined annual turnover or net asset value in Zimbabwe exceeds USD 1,2 million.

A merger may not be implemented prior to the necessary approval having been obtained from the Commission. Failure to notify or implementing the merger prior to obtaining the necessary approval can result in the imposition of administrative penalties of up to 10% of the annual turnover of either or both parties.

Restrictive Practices

The Act regulates restrictive practices and specifically prohibits price fixing, the division of markets and bid-rigging.

Abuse of Dominance

The Act prohibits the abuse of a dominant position.


Contraventions of the provisions relating to restrictive practices may result in the imposition of a fine not exceeding level 12 (USD 2 000) and/or imprisonment for a period not exceeding 2 years.


Currently Zimbabwe does not have any dedicated consumer protection legislation. However, a Consumer Protection Bill is currently being discussed by the Zimbabwean authorities. In the meantime, consumers are protected by means of piecemeal legislation such as the Consumer Contracts Act, the Control of Goods Act and the Competition Act.

The legislation referred to above regulates, among other things, the following aspects:

  • Unfair agreements – contracts must be written in a language that is easily comprehensible by consumers.
  • Liability to consumers – a supplier cannot exclude liability for latent defects in respect of new goods which it supplies to consumers, or if the goods do not comply with the description and or samples provided to the client.
  • Refunds – suppliers cannot refuse to refund consumers or, alternatively to comply with a consumer's request to have defective goods replaced or repaired.

Lastly, Zimbabwe is a member of the Common Market for Eastern and Southern Africa (COMESA) which has been established to primarily regulate competition law amongst the different economies of its member states and to ensure that a fair and effective regional competition law framework exists. COMESA also has powers regarding consumer protection matters and promotes transparency among economic operators in the region. As such the key aspects of consumer protection dealt with in the COMESA Regulations will also impact consumer protection in Zimbabwe.


Data protection is regulated by the Access to Information and Protection of Privacy Act, 2003 (AIPP). The AIPP prescribes the manner in which personal data information must be collected and managed as well as the personal data information security measures to be applied.

Some of the key principles of the AIPP are:

  • The right of access to information does not extend to non-Zimbabwean citizens or non-permanent residents, mass media services that are not registered in terms of the AIPP, or foreign states and their agents.
  • No personal data information may be disclosed to an applicant if the disclosure will result in the unreasonable violation of a data subject's personal privacy.
  • A data subject must consent (and can object) to the use of personal data information relating to him.


Court structure

The Magistrate's Court and the High Court are both courts of first instance. The jurisdiction of the Magistrate's Court is limited to disputes under USD 10 000 and the High Court is the court of first instance for all matters where the claim is above that threshold. The Supreme Court hears appeals from the High Court, and the Constitutional Court is the highest court hearing matters relating to constitutional rights.

The courts operate according to the terms of the Magistrate's Court Act, the High Court Act and the Constitution. These documents can be accessed at www.parlzim.gov.zw

Security by foreign litigants

Foreign litigants are normally required to provide security where they are instituting formal proceedings.


Successful litigants may recover costs on the party and party scale, which would be around 50% of the costs incurred or on a legal practitioner and client scale which would be all the costs incurred.

Legal practitioners

There is a single professional role for all practicing legal professionals although it is a de facto bar.

Alternative dispute resolution

Arbitration is a recognised form of dispute resolution and is governed by the Arbitration Act which can be accessed at www.parlzim.gov.zw. The Commercial Arbitration Centre and Africa Institute of Mediation & Arbitration are the 2 established arbitration bodies. Zimbabwe is a signatory of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.


Governing legislation

The Labour Act, chapter 28:01, Act 16 of 1985.

Particulars of employment

An employment contract may or may not be in writing, there is no regulation prescribing same. A contract of employment may provide in writing for a single, non-renewable probationary period of not more than 1 week in the case of casual workers; or 3 months in any other case: during which notice of termination of the contract to be given by either party may be 1 week in the case of casual work or 2 weeks in any other case.

Forms of contracts

  • A contract for an unspecified period of time.
  • Fixed term contracts.
  • Casual work contracts.
  • Seasonal work.

Termination of employment / dismissal

An employee is unfairly dismissed if the employer fails to show that he dismissed the employee in terms of an employment code; or if in the absence of an employment code the employer fails to show that, when dismissing the employee, he had good cause to believe that the employee was guilty of:

  • Any act, conduct or admission inconsistent with the fulfilment of the express or implied conditions of his contract.
  • Wilful disobedience to a lawful order given by the employer.
  • Wilful and unlawful destruction of the employer's property.
  • Theft or fraud.
  • Absence from work for a period of 5 or more working days without leave for a reasonable cause.
  • Habitual and substantial neglect to his duties.
  • Gross incompetence or inefficiencies in the performance of his work.
  • Lack of skill which the employee expressly or entirely held himself out to possess.
  • An employee is deemed to have been unfairly dismissed if the employee terminated the contract of employment without notice because the employer deliberately made continued employment intolerable for the employee; or if on termination of an employment contract or fixed duration, the employee had a legitimate expectation to be re-engaged and another person was engaged instead of the employee.

Dispute resolution mechanisms and remedies

All disputes shall be referred to a Labour Officer who shall attempt to settle it through conciliation or if agreed between the parties, by reference to arbitration.


There are exchange control regulations in Zimbabwe. Exchange controls are administered by the Reserve Bank of Zimbabwe.

The Reserve Bank shifts a significant amount of responsibility onto authorised dealers. Buying and selling of foreign currency using international cross rates is limited to authorised dealers and licensed Bureaux de Change.

Corporate and individuals can conduct a Bureau de Change business with a license. Local and foreign owned corporate who are registered in Zimbabwe can open up to 5 different Foreign Currency Accounts (FCA).

Individual FCA's can be held by all resident individuals including employees of the government, NGO, embassies, international organisations and the private sector. Non-residents can open non-resident transferable FCA's with authorised dealers.


Income Tax

A company is tax resident in Zimbabwe if it is incorporated, formed or established in Zimbabwe or has its place of effective control in Zimbabwe.

Zimbabwean resident companies and private companies are taxed on non-exempt income from a source within Zimbabwe. Income from a foreign source are liable to tax if it falls within the specific provision relating to deemed source.

Types of taxable income

Types of tax payable include dividends tax, capital gains tax (CGT), surtax (an AIDS levy which forms part of corporate tax) and withholding tax.

Tax rates

Corporate tax rate is payable at 25%. However, exceptions apply to certain sectors such as holders of special mining leases, with a tax rate of 15% and manufacturing companies that export more than half of their goods out of Zimbabwe are taxed at 20%. Companies that own, construct and operate projects in Zimbabwe are not taxed within the first 5 years of operation. They are the taxed at a rate of 15% for the second 5 years and 25% thereafter.

Dividends from a foreign source are liable to tax, any withholding tax deducted in a foreign country can be credited up to the amount of payable tax in Zimbabwe. Dividends from securities of the Zimbabwe Stock Exchange (ZSE) listed companies are taxed at a rate of 10% and at a rate of 15% for dividends of non-ZSE listed companies.

Interest accrued from a local Zimbabwean bank account by a resident is taxed at a rate of 15%. The tax payable is reduced to 5% if the interest is earned from a fixed term deposit.

Royalties paid to no-residents are subject to a 15% withholding tax.

Double taxation treaties

Zimbabwe has double taxation agreements with Bulgaria, Canada, France, Germany, Malaysia, Mauritius, Netherlands, Norway, Poland, Serbia, South Africa, Sweden, Switzerland and the United Kingdom.

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.

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