ZIMBABWE Law and Practice Contributed by: Nellie Tiyago and Rudo Magundani, Scanlen & Holderness
manner that is oppressive or unfairly prejudicial to the interests of some part of the members, includ - ing himself or herself, or that any actual or pro - posed act or omission of the company, including an act or omission on its behalf, is or would be so oppressive or prejudicial; and • drag-along and tag-along rights apply to holders of 10% of the company shares. 4.3 Disclosure and Reporting Obligations Concerning disclosure and reporting obligations in Zimbabwe, please see 1. Legal System and Regula- tory Framework . The primary sources for financing a business in Zim - babwe are shareholder loans, banking finance and capital raising via exchanges. The Zimbabwe capi - tal market is subject to oversight by the Securities and Exchange Commission. There are currently two registered exchanges: the ZSE and FINSEC. To be financially inclusive, Zimbabwe’s securities market introduced “C Trade”, which is primarily under FIN - SEC. Meanwhile, to encourage FDI, the Victoria Falls Exchange, which falls under the ZSE, was established for foreign currency-denominated capital raises. 5.2 Securities Regulation 5. Capital Markets 5.1 Capital Markets Overview Exchange control approval, obtained from the RBZ, is required when a foreigner acquires shares in an exist - ing company. The RBZ 2025 Exchange Control Guide - lines provides that foreign investors may invest up to 100% in unlisted companies for existing projects. The exchange of securities between residents and non-residents requires prior Reserve Bank approval. All such applications shall be submitted through an authorised dealer and supported by company regis - tration documents and profiles of the transacting par - ties. For listed securities, total foreign shareholding in the entity must not exceed 40%, with an individual allowed to hold up to 15%. The exchange control regulations and guidelines pro - vide that the remittance of profits and dividends, dis - investment by non-local firms and the raising of local
loans by non-residents must have exchange control approval. The process for seeking exchange control approval for shares to be transferred to an existing company requires that company to make an applica - tion to the RBZ through a merchant or commercial bank. 5.3 Investment Funds There is continuous monitoring by the RBZ, which requires the periodic submission of documents related to the approved shareholding and the movement of funds into and out of Zimbabwe. Foreign investors may invest up to 100% in unlisted companies for existing projects. The investments can be in the form of dilutions, mergers, acquisitions and rights issues. As stated before, the exchange of secu - rities between residents and non-residents requires prior Reserve Bank approval. An investor who is the holder of an investment licence is required to annually submit a report detailing the progress that has been made with a project that has been approved by the investment authority. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview The Competition Act (Chapter 14:28) mandates that parties to a merger must secure approval from the Competition and Tariff Commission before the trans - action becomes effective. Any merger that meets or exceeds the statutory threshold must be formally noti - fied to the Commission in compliance with the provi - sions of the Act. A “merger” is defined as the direct or indirect acquisi - tion or establishment of a controlling interest by one or more persons in the whole or part of the business of a competitor, supplier, customer or other person, whether that controlling interest is achieved as a result of the purchase or lease of the shares or assets of a competitor, supplier, customer or other person; the amalgamation or combination with a competitor, sup - plier, customer or other person; or any other means. All transactions – and particularly those that involve
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