How to start a foreign company in Zambia

Are you a foreign investor wondering how to start a foreign company in Zambia? Located in the heart of South Africa, Zambia offers promising business opportunities for foreign entrepreneurs looking to establish a presence in the country.

Process of foreign company registration in Zambia

Check the Business Name. A name search is done to confirm if the desired business name is available and is not already in use through PACRA.
Complete Form 3. This includes information about the directors and the activities of the company.
Receive the certificate and documents. Once everything is approved, you will receive a certificate of registration and a certificate.

Start a foreign company in Zambia: Post-registration steps

Obtain a Taxpayer Identification Number (TPIN). Submit your Certificate of Registration and register with the Zambia Revenue Authority (ZRA) to obtain a Taxpayer Identification Number (TPIN).
Register with the National Pension Scheme Authority (NPSA). If you are an investor, register with the NPSA by submitting a certificate of registration.
Transparent business tax. Before commencing business operations, please agree on the business fee with the Lusaka City Council or the local council from which your business will be operated.
Register for Value Added Tax (VAT). Register for VAT with the Zambia Revenue Authority if your business involves the production of goods and the value of taxable supplies exceeds the specified thresholds.
Obtain an investment registration certificate. Application form (Form No. 46 “Foreign Company Registration”), accompanied by a copy of the Certificate of Incorporation from the country of origin and its articles of association, regulations, provisions, memoranda and articles, as well as any other relevant information.
The company must also indicate the name of the firm, legal entity or individual resident in Zambia who will be authorised to act as the documentary agent.
Open a bank account. After obtaining a Foreign Taxpayer Registration Certificate, investors can open a bank account with any bank in Zambia.
Obtain the necessary licenses and permits. Depending on the nature of the business, obtain the appropriate licenses and permits. Companies dealing in excise goods (i.e. manufacturers and importers) must obtain an excise goods license from the Zambia Revenue Authority (ZRA).
Get a fire safety certificate. All businesses must obtain a fire safety certificate issued by the appropriate council, depending on the location of the business. The certificate is renewed annually.

Why Register a Foreign Company in Zambia?

Company registration is an important step for foreign entrepreneurs wishing to set up a business in Zambia. Here are some of the reasons why company registration is necessary:

Legitimacy and reliability. Company registration gives foreign investors legitimacy and authority in the eyes of potential partners, clients and stakeholders.
Limited liability protection. Registration of a company as a separate legal entity protects the limited liability of its owners. This means that the personal assets of shareholders or directors are usually protected from business liabilities.
Access to financing. Registered companies have greater access to financing options, including bank loans, venture capital and government grants.
Legal guarantees. Company registration ensures that the business operates within the legal framework of Zambia. It provides legal guarantees such as protection of intellectual property rights, enforceable contracts and access to remedies in case of disputes.
Business opportunities. Registering a company opens up opportunities for concluding government contracts, participating in tenders and cooperation with local companies. This allows foreign entrepreneurs to actively contribute to Zambia’s economic growth and benefit from its developing sectors.

Types of business structures available for registration in Zambia

Public limited liability company. This kind of business structure is subject to additional rules and transparency requirements and can sell its shares to the general public. Before issuing shares, public companies must register a prospectus with the Patents and Trade Registration Agency (PACRA) and have a minimum of seven members and two directors.
Private company limited by shares. This is a form of business structure laced with limited obligations to shareholders, making it the most popular. Once the investment has been made, shareholders are not liable for the company’s debts.
Limited liability company. Interested parties in this type of business are not subject to any limitations of liability. Although they have to use their personal assets, the members are nevertheless jointly and severally liable for the company’s debts.
Limited Liability Company. This type of business has members who act as guarantors rather than having share capital. In the event of liquidation of the company, the guarantors agree to pay a predetermined amount of money. This type of business is used for non-profit or charitable purposes.
Foreign company. It is applicable for a firm that is registered outside Zambia but has a place of business in the country.

Conclusion

Planning to start a foreign company in Zambia? requires a systematic approach and adherence to various regulatory requirements. While the process may seem extensive, each step is designed to ensure legal compliance, promote fair business practices, and contribute to the overall development of the construction sector. By diligently following these guidelines and understanding the roles, you can venture into Zambia’s booming business landscape. Reach out to our experts for assistance.

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