Zimbabwe, formally the Republic of Zimbabwe, is a landlocked nation in Southeast Africa surrounded by South Africa to the south, Botswana to the south-west, Zambia to the north, and Mozambique to the east. Harare is the capital and biggest city. Bulawayo is the country's second biggest metropolis. Zimbabwe, a nation of around 15 million people, has 16 official languages, the most prevalent of which are English, Shona, and Ndebele. It was previously renowned as the "Jewel of Africa" due to its wealth.
Zimbabwe has one of the most colorful histories of any country in southern Africa, and it originally became a key commerce route in the 11th century. The Gokomere, the Bantu people who would become the ethnic Shona, created the massive city-state of Great Zimbabwe during its late iron age. Great Zimbabwe thrived financially and culturally during the 14th to 15th century, becoming a commercial powerhouse controlling the gold, ivory, and copper trades with the Swahili coast and numerous Arab and Indian nations. The great Kingdom of Zimbabwe was created from there, followed by the Rozvi and Mutapa empires. When Europeans started colonizing Zimbabwe in the 1800s, the Zimbabwean people had transformed the country into an affluent and strategically significant territory.
Cecil Rhodes' British South Africa Company originally delineated the current region in 1890 when it invaded Mashonaland, and then in 1893 when it took Matabeleland after a ferocious struggle by Matabele people known as the First Matabele War. Company control ended in 1923, when Southern Rhodesia became a self-governing British colony. The conservative white minority administration proclaimed unilateral independence as Rhodesia in 1965. The state faced international isolation and a 15-year guerrilla struggle with black nationalist movements, culminating in a peace deal in April 1980 that created universal suffrage and de jure statehood as Zimbabwe. Zimbabwe thereafter joined the Commonwealth of Nations, from which it was suspended in 2002 for violations of international law committed by the then-government of Robert Mugabe, and from which it resigned in December 2003.
Robert Mugabe became Zimbabwe's Prime Minister in 1980, when his ZANU–PF party won elections after the end of white minority rule; he served as President of Zimbabwe from 1987 until his retirement in 2017. The state security system ruled the nation and was responsible for extensive human rights abuses throughout Mugabe's dictatorial administration. The economy endured collapse and hyperinflation from 2000 to 2009 before regaining once the use of currencies other than the Zimbabwean dollar was authorized, however recovery has subsequently slowed. After more than a year of demonstrations against his regime and Zimbabwe's rapidly failing economy, Mugabe was put under house arrest by the country's national army in a coup d'état on November 15, 2017, and resigned six days later. Since then, Zimbabwe's president has been Emmerson Mnangagwa.
Zimbabwe is a member of the United Nations, the Southern African Development Community (SADC), the African Union (AU), and the East and Southern African Common Market (COMESA).
After one year of continuous work, employees in Zimbabwe are entitled to 30 days or one month of leave. Weekends and national holidays are included in the vacation leave days.
The Republic of Zimbabwe recognizes sixteen national public holidays.
Employees receive up to 180 days of sick leave per year. After providing a medical certificate, the employee will initially be granted up to 90 days of sick leave at full pay.
Female employees are legally protected and are entitled to 98 working days of paid leave. (The 98 days include a mandatory entitlement of 21 days before to imprisonment.)
Paternity leave is not available to fathers.
There are no provisions in the Zimbabwe law regarding parental leave besides the maternity and paternity leave mentioned above.
Both the employer and the employee have the right to cancel an employment contract with notice. The notice period is between one and three months, depending on the duration of employment of the employee. Collective or redundancy dismissals are subject to special rules.
Employers may be obligated to pay severance to employees terminated due to redundancy under the terms of a collective bargaining agreement. Severance pay is typically one month's compensation for every two years of employment.
The notice period varies depending on the length of service of the employee:
At least 3 months for an indefinite contract or a length of service of more than two years.
At least 2 months for a length of service between one and two years.
At least 1 month for a length of serice between six and twelve months.
At least 2 weeks for a length of service between three and six months.
At least 1 day for a length of service less than three months or if the work is casual or seasonal.
Zimbabwean labor laws stipulate that the maximum probationary period is one day for casual or seasonal work and three months in all other cases.
Severance pay is only available under the Labor Act for collective dismissals for economic reasons or retrenchment. Although the Retrenchment Board determined the amount of severance pay differently depending on the organization's ability to pay, the most common amount is three months' pay for one year of service.
In most cases, work hours and overtime are determined by the collective bargaining agreement. Employees typically work 8.5 hours per day and 44 hours per week.
Overtime hours and the pay rate are generally indicated in the collective bargaining agreement.
Zimbabwe does not have a minimum wage policy.
Zimbabwe provides free healthcare to all citizens. There are various private providers and facilities as well. Some businesses provide private health insurance to their workers.
Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits.
The corporate income tax (CIT) rate for businesses (other than mining enterprises with special mining leases, but including branches) is lowered to 24.72 percent as of January 1, 2020. (previously 25.75 percent ). This rate comprises a 24 percent base rate plus a 3 percent AIDS levy.
Zimbabwe currently has a source-based tax system. This implies that money earned in, or considered to be earned in, Zimbabwe will be taxed in Zimbabwe unless a particular exception is provided. To establish whether a transaction is taxable in Zimbabwe, the particular circumstances of the transaction should always be examined.
Foreign businesses' income generated in Zimbabwe, or considered to be earned in Zimbabwe, will be taxed in Zimbabwe. In this situation, it is necessary to establish if the foreign entity is required to register a local entity. If a firm has established a location of business or is otherwise deemed to be dealing in Zimbabwe, it must register a branch. As an alternative to a branch business, a local subsidiary firm may be formed.
Non-residents who do not have a company in Zimbabwe, on the other hand, may be liable to withholding tax (WHT).
Currently, the Zimbabwean tax system is based on source rather than residence. Income obtained or perceived to be sourced from Zimbabwean sources is taxed. During the current tax reform process, Zimbabwe has stated that it is contemplating shifting to a residence-based system.
The location where money originates or is generated, not the place where it is paid, is referred to as the source. If products are sold under a contract made in Zimbabwe, the source of revenue is considered to be in Zimbabwe, regardless of the location of delivery or transfer of ownership. The location where services are provided is referred to as the source of services.
Certain kinds of money earned outside of Zimbabwe may be considered to have been earned in Zimbabwe and taxed as such in the hands of a Zimbabwean tax resident. Interest, dividends, and some copyright royalties originating outside of Zimbabwe are examples.
WHT may apply to non-residents who do not have a place of business in Zimbabwe.
For a taxable income of up to ZWL 120,000, the tax rate is 0.
For a taxable income from ZWL 120,001 to ZWL 360,000, the tax rate is 20% for each ZWL above 120,000.
For a taxable income from ZWL 360,001 to ZWL 720,000, the taxable income is ZWL 48,000 + 25% for each ZWL above 360,000.
For a taxable income from ZWL 720,001 to ZWL 1,440,000, the taxable income is ZWL 138,000 + 30% for each ZWL above 720,000.
For a taxable income from ZWL 1,440,001 to ZWL 3,000,000, the tax rate is 354,000 + 35% for each ZWL above 1,440,000.
For a taxable income from ZWL 3,000,001 and above, the tax rate is 900,000 + 40% for each ZWL above 3,000,000.
VAT is a transaction tax, and the consequences vary depending on the transaction. Some transactions are taxed at a rate of 14.5 percent (from 1 January 2020; formerly 15 percent) or 0%, while others are VAT-free. Certain restrictions apply to the ability to claim input tax deductions. Prior to the execution of transactions, advice on the VAT consequences of particular transactions linked to company activities should be sought. The registration requirement has been raised to 1 million Real Time Gross Settlement (RTGS) dollars in yearly revenue (from 60,000, which was unadjusted from United States dollar [USD] based currency).
VAT is charged on all taxable supplies made by a registered person. A taxable supply is one that is made in the course or advancement of a taxable activity. A taxable activity is defined as any continuous or regular activity in Zimbabwe that includes the provision of goods or services for consideration.
VAT is due on all imports entering Zimbabwe for local consumption, subject to specific exclusions (e.g. in terms of a technical assistance agreement, donations to the state, goods of which the local supply is zero-rated). Item VAT is levied on the whole amount of the import plus any relevant customs charge. This is usually payable in the currency used to pay for the imported goods.
A registered VAT vendor may deduct input tax credits paid in the course of taxable supplies made to such person if a tax invoice is available to substantiate the input tax deduction. It is also essential to understand the distinction between presumed and disallowed input tax deductions. Import VAT paid may be deducted as input tax only if the import was made in furtherance of a taxable activity and the importer has the necessary paperwork (e.g., stamped customs records).
VAT returns must be submitted by the 25th day of the month following the month to which the VAT pertains.
All registered taxpayers (those with a tax Business Partner Number) are required to utilize electronic fiscal registers (EFRs) that may be connected to the Zimbabwe Revenue Authority (ZIMRA). Penalties of up to USD 25 per point of sale per day may be levied.
In April 2017, the idea of designating VAT agents was introduced. Several major mining firms have been recognized as agents, and the law requires them to deduct 10% of the total invoice as VAT WHT. The agents must then provide the payees with a document indicating that the VAT WHT has been deducted so that the payee may claim it against the next month's VAT obligation.
With effect from 1 January 2019, the VAT operator must account for the relevant VAT in the same currency when sales of goods or services are made in foreign currency.
Depending on Zimbabwe visa rules, certain nations do not need a visa to enter Zimbabwe, while others may enter the Southern African Republic with an authorized visa. Zimbabwe presently permits about 40 nations to enter the country visa-free for stays of up to 90 days upon presentation of a valid passport at any of the country's border post checkpoints. The bulk of these visa-free people are from other nations in southern and central Africa.
Visas are required for all international visitors, regardless of how long they intend to remain or for what reason they are coming. Zimbabwe is home to people from over 200 different nations. After finishing the application procedure, you will get an electronic visa acceptance through email. EVisas for Zimbabwe are accessible to citizens of up to 55 different countries
You will avoid lengthy lineups at the border and the need to visit an embassy in person if you apply for a Zimbabwe visa online. Zimbabwe visas for tourists, business travelers, and transit visitors may be obtained online.
For stays of more than 30 days or for other purposes like as employment or study, the eVisa program requires eligible nationals to get a Zimbabwe visa via an embassy. All nationalities above the age of 45 must additionally get a visa, regardless of their intended purpose or period of stay. According to the Zimbabwe Visa Policy, no foreign citizens are currently subject to visa restrictions.
Visitors from over 200 countries must get a visa in order to enter Zimbabwe. Depending on your nationality, you may be able to get a Zimbabwe tourist visa upon arrival in Zimbabwe by applying online, at an embassy, or at a consulate.
Tourist eVisas for Zimbabwe should be applied online since they are only given online, avoiding lengthy waits at the border and trips to government offices. Visitors to Zimbabwe with an authorized online visa may remain in the country for a maximum of three months, and their visas may be extended after they arrive.
Anyone who is not qualified for an eVisa or visa on arrival for tourism should contact the Southern African Republic's closest embassy or consulate. To enable enough time for processing and acceptance, an application for a tourist visa at an embassy must be filed well in advance of the expected arrival date.
Employment contracts may be either verbal or written, although a written contract is preferred. The written contract should contain the following provisions:
Employer's name and address
Timeframe (if for a fixed term)
Probation time (if applicable)
Salary information and payment schedule
Vacation and various types of leave are available.
Working hours
Specifics about any bonus or incentive program
Details on any further advantages
Any other job conditions
If the contract includes a probationary term, it cannot be more than three months, unless the job is temporary or seasonal, in which case the probationary period may be as short as one day.
Zimbabwe Dollar
Establishing a Zimbabwe subsidiary requires careful consideration of your location as well as your anticipated business operations. First, look for an area in Zimbabwe with the best laws and regulations. Zimbabwe's subsidiary laws might differ depending on the city, region, or locality, thus it's critical that you understand the location where you wish to incorporate. If you're still unsure about where to incorporate in Zimbabwe, consult with an expert who can steer you in the right direction.
Another crucial factor to consider is what form of subsidiary would best serve your company's objectives. There is no one-size-fits-all subsidiary structure; you may choose among entities such as a limited liability company (LLC), public limited company, branch, or representative office. We propose incorporating as a branch or representative office if you simply require an office in name or if you only need to manage a few operations. However, most businesses choose the LLC form since it offers the greatest advantages and operational independence.
The following actions are required to establish a Zimbabwe subsidiary:
1. Choosing a Distinctive Company Name
2. Completing the procedure of registering a corporation
3. Obtaining a ZIA-issued investment license
4. Meeting the prerequisites for indigenization
5. Obtaining operational permissions for your industry
6. Obtaining immigration-issued residence and work permits
Zimbabwe's subsidiary rules differ depending on the entity, thus you must adhere to the appropriate restrictions based on your subsidiary structure. LLCs must have at least one director and one shareholder of any nationality. Because Zimbabwe's rules do not specify a precise quantity, it is up to investors to determine the minimum paid-up share capital. Although LLCs function similarly to resident companies, there are no yearly audit obligations.
