ZIMBABWE Law and Practice Contributed by: Nellie Tiyago and Rudo Magundani, Scanlen & Holderness
agriculture, mining operations, manufacturing and information and communication technology. • Greenfield investment funding ratios: To promote sustainable foreign investment, Greenfield projects must maintain a debt-to-equity ratio not exceeding 2:1, thereby avoiding excessive reliance on debt- creating flows. • Public-private partnerships (PPPs): Foreign invest - ments structured as PPPs – particularly under build-operate-transfer (BOT) models – may be financed entirely through foreign debt. Multi-Currency Jurisdiction Zimbabwe operates a multi-currency framework in which both local and foreign currencies are legally accepted for domestic transactions, subject to prevail - ing exchange control regulations. The United States dollar remains the predominant medium of exchange for day-to-day commercial activity (as cash, electronic or mobile money payments). It is permissible to price and transact in foreign currency, provided that cus - tomers are afforded the option to settle payments in local currency at the prevailing bank foreign exchange selling rate as published by the RBZ. Tariffs, fees and charges may be denominated in foreign currency, subject to the same requirement for a local currency payment alternative. Initially set to lapse in 2025, the multi-currency regime was formally extended to 31 December 2030 through Statutory Instrument 218 of 2023, issued in October 2023. Investment Licences In 2025, ZIDA marked the fifth anniversary of its establishment under the Zimbabwe Investment and Development Agency Act (Chapter 14:38). As the national investment authority, ZIDA was constituted to promote, facilitate and safeguard both domestic and foreign investment. Through ZIDA, investors may apply for an investment licence and seek approval to operate within reserved sectors. These instruments confer statutory protections, including the right to equitable treatment, safeguards against expropriation, and regulatory support for the repatriation of funds and employment of senior expatriate personnel. Special Economic Zones A special economic zone (SEZ) in Zimbabwe is a geo - graphically demarcated area where business activities
operate under a liberalised legislative and regulatory framework, offering fiscal and non-fiscal incentives to attract investment. ZIDA is mandated to designate, regulate and promote SEZs across Zimbabwe. SEZs enjoy relaxed regulatory conditions compared to the rest of the country, including: • corporate tax holidays, exemptions from payment of capital gains tax (CGT), duty-free importation on capital equipment and VAT exemptions on qualify - ing inputs; • exemption from the permits required to import into an SEZ any capital goods, consumer goods, raw materials, components or articles intended to be used for the approved activity and necessary for the proper administration of the premises, and for the health, safety, hygiene and welfare at the prem - ises of employed persons; • the ability to transfer funds into and out of an SEZ without exchange control approval, provided that a written declaration of the movement and amount of such funds was made to the RBZ; and • the ability of non-residents employed within an SEZ to receive their emoluments in foreign currency, which may be paid to an external bank account. Freehold Available for Foreign Persons Currently, there are no legal restrictions on the transfer of titled land in Zimbabwe to non-citizens. However, individual foreign investors seeking to acquire com - mercial real estate may only do so through a local - ly incorporated entity, which shall hold title to the property. All property acquisitions remain subject to exchange control regulations, requiring that payments be effected through formal banking channels. In the event of disposal, where the purchaser settles immov - able property sale proceeds offshore, prior approval from the RBZ is mandatory for the retention of such funds (see the Guidelines to Authorised Dealers and Their Clients on Foreign Exchange Transactions).
3. Mergers and Acquisitions 3.1 Transaction Structures
The most common structures for FDI are asset pur - chases, share purchases, partnerships and joint ven -
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