Takeover / merger regulations

• Competition (Authorisation of Mergers) Regulations, 1999 Statutory Instrument no 295/1999
• Competition (Notifiable Merger Thresholds) Regulations, 2002 Statutory Instrument 195/2002
• Competition (Notification of Mergers) Regulations, 2002 Statutory Instrument 270/2002

Listing Rules

• Zimbabwe Stock Exchange listing requirements
• Zimbabwe Stock Exchange Members’ Rules  

Exchange

Zimbabwe Stock Exchange

Regulatory body or bodies

Securities and Exchange Commission of Zimbabwe (SECZ) established in terms of section 3 of the Securities Act (Chapter 24:25).

Corporate Governance Code

• National Code on Corporate Governance Zimbabwe (ZIMCODE)
• Section 94 of the Zimbabwe Consitution providing for basic values and principles for public administration

Public offers / disclosure regulations

• Zimbabwe Stock Exchange Listing Requirements

Current number of listed companies

65 companies

Find out which companies are listed on the Zimbabwe Stock Exchange.

Scope

The Competition Act covers notifiable mergers (the definition of merger includes takeovers and acquisitions) for which the combined annual turnover or asset values will exceed US$1,200,000.

The filing fee is 0.5% of the value of the transaction, subject to a minimum of US$10,000 and a maximum of US$50,000.

Impact of regulatory regime on business

The competition regime is not very restrictive. Businesses are generally able to merge or purchase other businesses which are not in the same industry.

Mergers within an industry are generally allowed where the industry has many firms that compete at the same level.

COMESA Competition Commission

The COMESA Competition Commission rules apply to Zimbabwe.

Legislation

Competition Act (Chapter 14:28)

Regulatory Body

The Competition and Tariff Commission administers the Competition Act and related laws and mandated to promote and maintain fair competition in all sectors in Zimbabwe.

Corruption Perception Index rank worldwide for 2017

Zimbabwe is the 157 least corrupt nation out of 180 countries, according to the 2017 Corruption Perceptions Index reported by Transparency International.

Zimbabwe Corruption Rank from 1998 - 2018 

Signatories to United Nations Convention Against Corruption (UNAC)?

Yes

(UNAC) Ratified?

Yes

Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?

Yes

Signatories to the African Union Convention on Preventing and Combating Corruption?

Yes

Ratified?

Yes

Corruption Perception Index score for 2017

22

Enforcement of foreign judgments

Enforcement of foreign judgments is governed by the Civil Matters (Mutual Assistance) Act (Chapter 8:02). The civil judgments of the following countries are enforceable in Zimbabwe:

• Australia
• Dominica
• Germany
• Ghana
• Portugal
• South Africa
• Italy
• Zambia
• Slovak Republic
• Bulgaria

Enforcement of Judgments can also be done using a common law procedure for which there is no closed class of countries whose judgements can be recognised and enforced. This effectively allows for the recognition and enforcement of judgments from many jurisdictions.

A Zimbabwean court registering such a judgment has a wide discretion to refuse registration if it is convinced that:

• the judgment was obtained by fraud
• the foreign court which granted the judgment did not have jurisdiction
• the judgment is not final in nature
• the judgment was granted in default without the other party receiving adequate notice or
• the judgment has been set aside by a competent court in the foreign country

Judiciary

Judges are appointed by the President on the advice of the Judicial Services Commission. Judges will retire at the age of 65 unless they decide to remain in office until they turn 70. The Judiciary is led by a Chief Justice who is a judge of the Supreme Court. Only persons who are above the age of 40 years and who have been qualified to practice as lawyers for at least 7 years are eligible to be appointed as judges.

There is no statutory qualification to be a Magistrate but recruitment for that office is usually done on the basis of at least a tertiary education qualification and all candidates then undergo two years of mandatory training.

Effectiveness of the court system

The civil division of the Magistrates' Court is generally efficient and fast in clearing its cases and delivering judgments. On the other hand, the processes in the High Court are quite slow and a contested case is usually completed in a period of between nine and twelve months. In the Supreme Court, judgments can take a long time to be delivered and it can then be another year before the case is completed. The new Judicial Service Commission is, however, making progress in ensuring that court processes are faster.

Structure of the court system

The Constitution of Zimbabwe provides for a fair trial in criminal cases, and access to courts of law for everyone. Courts of law have been set up to provide people with justice. There are many courts functioning in the country at different levels. Each court has a different role to play and has a separate jurisdiction from other courts.

The highest court in the country is the Constitutional Court which was introduced by the Constitution of Zimbabwe of 2013. Besides this court, there are many at lower levels, thus forming a hierarchy of courts.

Zimbabwe Court Hierarchy

Arbitration

Arbitration in Zimbabwe is conducted under the Arbitration Act (Chapter 7:15) which adopted the UNICITRAL Model Law on International Commercial Arbitration into domestic law.

Enforcement of arbitral awards

Arbitration awards (including foreign arbitration awards) are also enforced under the Arbitration Act (Chapter 7:15) in line with the UNICITRAL Model Law on International Commercial Arbitration.

Arbitration awards must be registered with a court of competent monetary jurisdiction. Awards valued below US$10,000 have to be registered with the Magistrates Court and those above US$10,000 have to be registered with the High Court.

Perception of the local courts

The superior courts (from the High Court onwards) are well respected, with their judgments having persuasive effect in other jurisdiction in the Southern African Development Community (SADC) region, and beyond.

Foreign investment incentives

The following are some of the foreign investment incentives made available by the Government:

• an exemption on import duties for capital equipment
• investors developing an industrial park will receive a tax holiday for the first five years and a 10% tax rate for the next five years
• an investor assisting the Government in building state infrastructure will receive a tax holiday for the first five years, a 10% tax rate for the second five years and then a 20% tax rate for the third five years
• a tourism-related investment in a developing zone will receive a tax holiday for the first five years, a 10% tax rate for the second five years and then a 20% tax rate for the third five years
• mining companies are taxed at a flat rate of 15% and are allowed an unrestricted carry-over of mining losses

Foreign investment rules

Listed Companies

The Indigenisation and Economic Empowerment Act (Chapter 14:33) shall not apply to any business in the national economy other than those specified in section 3 (1) of the Act and those in the reserved sector of the economy.

Accordingly, any person is free to invest in form, operate and acquire the ownership or control of any business not included in the reserved sector or in section 3 (1).

The businesses listed in section 3 (1) are those involved in the extraction of diamonds and platinum. Indigenous Zimbabweans is defined as any person before 18 April 1980 who was disadvantaged by unfair discrimination on the grounds of race and any descendant of that person.

Reserved sectors

• Transportation - passenger buses, taxes and car hire services
• Retail and wholesale trade
• Barbershops, hairdressing and beauty salons
• Employment agencies
• Valet services
• Grain milling
• Bakeries
• Tobacco grading and packaging
• Advertising Agencies
• Artisinal mining

Advertising regulations

Advertisements Regulation Act (Chapter 14:01)

Urban Councils Act (Chapter 29:15)

Payroll tax and social security

Payroll tax is referred to as PAYE (Pay as you Earn) and is usually paid monthly on the following basis:

• $0 to $300 – tax free
• $300.01 to $1500 – taxed at a rate of 20% but with a deduction of $60
• $1500.01 to $3000 – taxed at a rate of 25% but with a deduction of $135
• $3000.01 to $5000 – taxed at a rate of 30% but with a deduction of $285
• $5000.01 to $10000 – taxed at a rate of 35% but with a deduction of $535
• $10000.01 to $15000 – taxed at a rate of 40% but with a deduction of $1035
• $15000.01 to $20000 – taxed at a rate of 45% but with a deduction of $1785
• $20000.01 and above – taxed at a rate of 50% but with a deduction of $2 785.00

Tax Tables

Transfer pricing

Transfer pricing is now regulated by section 98B and the 35th Schedule to the Income Tax Act. 

Exchange control

The Exchange Control Act is still in force despite the fact that  Zimbabwe is currently using multiple currencies namely US Dollars, Pound Sterling, South African Rands among others as an alternative to its own currency. All of these qualify as legal tender.

Stamp duty

Stamp duty is applied on transfers of immovable property and any other transactions requiring registration in the Deeds Registries Office such as:

• mortgage bonds
• brokers' notes
• cheques and
• insurance policies

Corporation tax

Corporation tax is paid at a rate of 25% on estimated profits and is paid quarterly.   

Dividends

A withholding tax of 15% is applied to dividends paid by unlisted non-resident companies.

Listed companies have a withholding tax of 10% applied to their dividend payments.

Losses

Losses cannot be carried backwards. Losses can be carried forward for up to six years, except for mining losses which can be carried forward indefinitely.

Real property tax

Stamp Duty is paid only on transfers of the property. The tax is payable by the purchaser on a sliding scale of between 2% and 4% of purchase price.

Export Processing Zone

They are provided for by the Zimbabwe Investment Authority Act (Chapter 14:30).

Technical service fees

Technical service fees vary depending on the professional supplying the services but a withholding tax of 15% is applied to non-resident companies.

Capital Gains Tax

Gains and losses are not included in corporation tax since they are covered by the Capital Gains Tax Act (Chapter 23:01).

Personal income tax

Personal income is taxed quarterly as follows:

• March - 10%
• June - 25%
• September - 30%
• December - 35%

Royalties

A withholding tax of 15% is applied to royalties paid to non-resident companies.

Thin Cap regulations

Thin Cap regulations apply to companies whose debt-to-equity ratios exceed 3:1.

Interest

A withholding tax of 15% is applied to interest payments to resident companies.

Value Added Tax

VAT is paid at a flat rate of 15%.