Why Invest in Zambia

Being a member of a number of regional and international groupings, make Zambia strategic both in its location and abundance in natural resource. These include the Common Market for Eastern and Southern Africa (COMESA), which is currently a customs union, and the Southern Africa Development Community (SADC) Free Trade Areas (FTA).

Zambia is also in the forefront in pushing for the establishment of the Tripartite Free Trade Area composed of COMESA, SADC and the East Africa Community.In addition , the Government has signed and is currently implementing a number of bilateral trade agreements such as with China, Canada and Japan. Zambia is a member of the World Trade Organization (WTO) and currently chairing the LDC group at WTO.

It is part of the Cotonou agreement and has benefited from duty-free, quota-free market access for the European market under the Generalized System of Preference (GSP) and the Everything But Arms (EBA) arrangement - and for the US market under the African Growth and Opportunities Act (AGOA). Zambia has also been negotiating for further market access through the economic partnership agreements (EPAs) under the eastern southern Africa (ESA) group with the European Union.

 

Zambia has vast resource endowment in terms of land, labour and water, indicating the high potential to expand and/or excel development. Zambia has a total land area of 75 million hectares (752,000 square km), out of which 58% (42 million hectares) is classified as medium to high potential for agricultural production.

Zambia stands out as one of the prime tourism destinations in Africa offering a wealth of natural tourism assets – waterfalls, lakes and rivers holding about 35% of Southern Africa’s water, ‘wildlife protected areas’ occupying about 10% of the country’s total land area, and a tropical climate.

It is also the home of the Victoria Falls, one of the Seven Natural Wonders of the World. In addition, Zambia is endowed with a rich and diverse culture resulting in the occurrence of more than 30 colourful traditional ceremonies annually.

Fiscal Incentives and Qualifying Thresholds

The Act provides for investment thresholds that have to be met to qualify for fiscal and non-fiscal incentives. Projects that qualify may be new or existing ones undergoing expansion or modernization. These are the categories of investors who can be considered under the ZDA Act.

Investors who invest not less than US$500,000 in the Multi Facility Economic Zone, an Industrial Park, a Priority Sector and invest in a Rural Enterprise under the ZDA Act, are entitled to the  following fiscal incentives:

  1. Zero percent tax rate on dividends for 5 years from year of first declaration of dividends.
  2. Zero percent tax on profits for 5 years from the first year of operation for manufacturing projects in a rural area, MFEZ and Industrial Park.
  3. Zero percent import duty rate on capital goods, machinery including specialized motor vehicles for five years.

In addition to fiscal incentives, the above category of investors is entitled to the following

Non- Fiscal incentives;

Investment guarantees and protection against state nationalization;
Free facilitation for application of immigration permits, secondary licenses, land acquisition and utilities

Investors who invest an amount not less than US$250,000 in any sector or product not provided for as a priority sector or product under the Act. This category of investors is entitled to non-fiscal incentives as follows;

  1. Investment guarantees and protection against state nationalization;
  2. Free facilitation for application of immigration permits, secondary licences, land acquisition and utilities

The Certificate of Registration is valid for ten (10) years from the date of issue.

The investor may apply for renewal of the Certificate of Registration before the date of its expiry.

Zambia practices a system of multiparty democracy with Members of Parliament and the President who is also the Head of State, There is a stable legal environment governed by the rule of law.

  1. Political stability since attaining independence in 1964
  2. The country is one of Africa's most peaceful, tolerant and democratic states with extremely low levels of crime.
  3. Westminister-style government and sound governance structures based on the rule of law and respect for private property. Elected government officials, parliamentary system.
  4. Independent judiciary with established court systems with separate commercial courts
  5. Strong anti-corruption measures have been instituted                                           
     

Investment guarantees and protection against state nationalization through the Certificate of Registration for your investment under the ZDA Act 2006

Guarantees through Zambia's participation in the World Bank Group's Multilateral Investment Guarantee Agency

Member of the International Convention on the Settlement of Investment Disputes

Zambia has undertaken rigourous and institutional reforms aimed at improving the attractiveness of the country to investors.

Specifically, the Private Sector Development Reform Program (PSDRP) and the Millennium Challenge Account (MCA) are the two major reform programs.

PSDRP addresses the issues related to cost of doing business through legislation and institutional reforms, while the MCA addresses issues relating to transparency and good governance.

  1. Over 10 years of steady GDP growth
  2. Investors freely invest in any sector of the economy and are entitled to various incentives
  3. Direct support by an Investment Promotion Officer (IPO) for your investment registration process and assistance with processes for all other licences and permits for your business
  4. A Private Sector Development and Reform Program (PSDRP) continually streamlining licensing and administrative processes for the private sector resulting i
  5. Starting and registering a business can be done in one day
  6. Private Investment is a top priority by the Government
  7. No sectors are barred to foreign investors and no restrictions on the percentage of equity they might hold
  8. Creation of world-class infrastructure in desgnated areas known as Multi Facility Economic Zones (MFEZ) to facilitate entry of businesses
  9. Development of capital markets beginning with Lusaka Stock Exchange (LuSE)