Starting A Business In Zimbabwe A Breakdown Of The Prices and Process

This update examines the procedures, time and cost involved in launching a commercial or industrial firm in Zimbabwe with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income (i.e. $860×10) according to the World Bank.

1. Reserve the company name with the Chief Registrar of Companies Agency: The reservation is valid for 30 days and can be extended for another 30 days for an additional fee. It takes 7 days to complete this stage at a cost of  $30 and takes 3 working days.

2. File the memorandum and articles of association with the Registrar of Companies: The law provides for a model or boilerplate articles of incorporation. On the date of incorporation, the Registrar of Companies must be notified of the appointments of the company’s directors and secretaries. This is done by filling the particulars of the directors and secretaries and any changes therein or a list of directors and principal officers (Form CR 14).

These documents must be accompanied by a duplicate original or a printed notarized copy. Registration fee of US$ $300 and takes 3 working days and price include minimum statutory fees.

In practice, companies usually start up with a low amount of capital to avoid the exorbitant stamp duty. A company may also issue shares at a premium to circumvent the requirement. This stage takes 14 days.

3. Register with the tax authorities for Income tax, VAT, and PAYE: Upon formation, a company must register at the regional Zimbabwe Revenue Authority (ZIMRA) Office. A copy of the company’s certificate of incorporation is required for the Collector's records, along with the memorandum and articles of association and a certified copy of the identification of the assigned public officer. Registration $130.00 and it takes 2 working days.
The company will be issued a registration number, as well as the current tax tables and the pay-as-you-earn (PAYE) receipt books. The P8 and P6 Forms now must be generated by the applicant and are not freely available. The ITF 16 Form must be completed in consultation with the Income Tax Office.

According to Zimbabwe’s Finance Act (as amended), companies must now budget to pay all their company tax within the trading year. The tax must be paid as follows: 10% by the 25th of March, 10% by the 25th of June, 40% by the 25th of September, and the balance of the estimated tax for the tax year by the 20th of December.

Firms with a turnover of US $60,000 must register for VAT with the Zimbabwe Revenue Authority (ZIMRA). An application must be submitted for a Certificate of Registration (Form VAT 1), which, along with Forms VAT 2 and VAT 3, is found at ZIMRA Web site (www.zimra.co.zw). Firms with a turnover of less than US $60,000 may apply for voluntary VAT registration. This process should take 14 days at no charge. Monthly books of accounts is $60.

4. *Register with the National Social Security Authority (NSSA) for pension and Accident Prevention and Compensation Scheme: The employer and the employee must each contribute 3% of the employee's gross monthly salary. 14 days (simultaneous with procedure 3) with no charge. $50 and takes 4 days.

5. *Register with the Manpower Development Fund (ZIMDEF): Employers must register with, and contribute 1% of their wage bill to, the state-run Manpower Development Fund. The fund allows employers to recover expenses when employees complete training. Takes 1 day to complete and is done simultaneously with procedure 3 at no charge. $50 and takes 3 days.

6. *Pick up the form of license application notice from the City Council Health Department: The entrepreneur then retrieves the license application notice form from the City Health Department. Takes 1 day, and Is simultaneously done with the procedure at a cost of $20.

7. *Advertise the application for a trade and business license in a local newspaper: A trade and business license applicant must publicly announce the proposed application twice in a local newspaper. The form, Notice of intention to apply for the issuance of a new license, is available from the City Health Department. The first notice must be published no more than 6 weeks, but at least 4 weeks, before the application will be heard by the licensing authority.

The second notice must appear 7 days after the first notice. Any objections to the application must be submitted in writing to the licensing authority within 7 days of the second notice. Takes 34 days on average, and done simultaneously with procedure 3 at a cost of $30.

8. Submit an application form for the issuance of new licenses to the Licensing Office at the Municipality: Two copies of the application forms are submitted along with proof of both publications in a local newspaper of a notice of intention to operate a business. On receipt of the application, the Licensing Office requests a police report from the applicant, as well as a similar report from the person who will be in actual and effective control of the premises to which the application relates, if that person is not the same applicant.

The Licensing Office also seeks a report from the Town Planner to ensure that the application is consistent with the zoned use of the premises.

Application for the license can start once the Registrar of Companies grants its approval of the company name. It is also possible to apply for a temporary license pending the grant of the full license, which can take up to a month or longer. This stage takes 34 days and costs $530.

9. *Receive inspection by the Licensing officers: Officers inspect the company site to check if the workplace premises are suitable for the intended use. The verification criteria used by the officers are specified in the relevant bylaws. Takes 1 day, and carried out simultaneously with the previous procedure at no charge. *Takes place simultaneously with another procedure. City of Harare registration is $150 excluding payable fees.