Legal forms of incorporation

  • Foreign investors are allowed to incorporate a sole director company and register a fully owned local company without having any Zambian shareholders (The Companies Act, 2017).
  • Investors commonly register their local firm as a limited liability company.
  • Limited liability companies might be incorporated as a private company or a public company. In any case, taxation is made at the entity level.

Types of private limited companies

Three types of private limited companies might be incorporated in Zambia.

Type of private company Company limited by shares (local or foreign company) Company limited by guarantee Unlimited company
Presence of share capital Yes No Yes

Members have unlimited liability for the company’s debts and liabilities

Conditions Minimum required capital:  K15,000 (except for banks, insurance and other financial institution)

No more than 50 shareholders

Non-profit purposes

At the time of formation, each member must sign a declaration of guarantee, specifying the amount he undertakes to contribute if the company is wound up

No more than 50 shareholders (presence of exceptions)

Shareholder not free to resign

Foreign incorporated companies

  • Foreign investors can establish a branch of their (foreign) company in Zambia, a foreign company being a company that has been incorporated outside Zambia.  
  • Local branches of foreign companies should have at least one and no more than nine local directors.
  • More than half of local directors must be resident in Zambia.  
  • Whether local or foreign, the same rate of corporate tax applies.

Overview of setting up a business

Before starting her business, the foreign investor has to do the following

Starting a business in 7 steps

Check the company name for uniqueness

  • The investor can check online the uniqueness.
    The clearance is done by the
    Patent And Companies Registration Agency (PACRA), an agency governed by the Patents and Companies Registration Agency Act (2010) and the Registration of Business Names (2011).
  • It costs ZMK 83 for name search and ZMK 166 for name reservation (source: World Bank, Doing Business 2018).

The declaration of compliance (Companies Form 11) must be signed by a Commissioner of Oaths

  • The company form 11 has to be commissioned by a Commissioner of Oath.
  • On average, it costs ZMK 50 (source: World Bank, Doing Business 2018).

Register the company

  • The investor has to register her business with the Patent And Companies Registration Agency (PACRA).
  • Investors have to submit forms (“Form 2:Application for Incorporation”, “Form 5: Declaration of Consent to act as a Director or Secretary”, Form 11: Declaration of compliance) and pay related fees (source: World Bank, Doing Business 2018).
  • In case the investor creates a branch of her foreign company, the investor has to submit a specific application form (form No. 46, “Registration of a Foreign Company”) accompanied by a copy of the Certificate of Incorporation from the country of origin and its charter, statutes, regulations, memorandum and articles and any other relevant information.
  • The company should also indicate the name of the firm, corporate body or individual resident in Zambia that would authorised to act as the documentary agent. The application fee to be paid upon completion of the process is ZMW 4,166.
    The end of the process is marked by the issuance of the Certificate of Registration.

Payable fees are the following

Names Fees (ZMK)
Registration Fee 2.5% of nominal cost, with a minimum fee of ZMK 250
Certificate of incorporation 83
Certificate of share capital 83
Companies Form 5 83
Companies Form 11 83

Source: World Bank, Doing Business 2018

Obtain a tax ID number

  • Investors have to register with the Zambia Revenue Authority.
  • In order to get a tax identification number, it is mandatory to file the Certificate of Incorporation.  

Register for Social Security

Pay business levy

  • Before starting her business, a business levy has to be paid.
    In Lusaka, fees (ZMK 450) have to be paid to the Lusaka City Council (source: World Bank, Doing Business 2018).

Register for VAT

  • Investors have to obtain a Value Added Tax (VAT) tax number if the value of taxable supplies exceeds or is likely to exceed ZMK 800,000 in any twelve consecutive months or ZMK 200,000 in any consecutive three months.
  • Investors have to register with the Zambia Revenue Authority.

Get an investment registration certificate (optional)

  • To get an investment certificate (optional), investors must invest at least $250,000.
  • The certificate is issued by the Zambia Development Agency after inspection of the premises, this basic control aiming to ensure that the use of the registered premises is consistent with the enterprise’s operation activities.
  • Obtaining the certificate costs ZMK 8,950 (processing fee: ZMK 1,280 and certificate fee: ZMK 7,670).

Open a bank account

  • A number of commercial banks (e.g. Bank of China, Barclays Bank etc) have China banking desks.
  • The investor is allowed to open a bank account after getting the foreign taxpayer registration ID.

Obtain specific licences and permits

Health clearance and food hygiene license

  • Businesses involving the handling of consumables are required to obtain a health clearance and a food hygiene license.
  • Workers will be required to obtain a food handler’s medical certificate.

Fire clearance certificate

  • Companies have to get a fire clearance certificate.
  • The certificate, issued by the relevant council in which the business activity takes place, is valid for one year and renewable.

Business permit

  • Although the business permit is issued at the council level, the process is harmonised throughout the country.
  • Applicable fees depend on the activity the investor will be carrying out and on the number of employees.
  • Before obtaining the business permit, investors must have their business premises ready.

License to manufacture excisable goods

  • Companies dealing with excisable goods (i.e., manufacturers and importers) must obtain an excisable goods license from the Zambia Revenue Authority (ZRA).
  • The list of excisable goods is available on the ZRA’s website.