Zimbabwe: Investing

FDI in Figures

FDI flows to Zimbabwe are far below the country's potential due to the recession the country experienced in 2019 following the passage of Cyclone Idai and drought caused by El Niño, and the economic and health crisis triggered by the Covid-19 pandemic. According to the UNCTAD's 2022 World Investment Report, FDI inflows ammounted to USD 166 million in 2021, a significant decline compared to the pre-crisis period (USD 745 million in 2018). In the same year, the total stock of FDI reached USD 6 billion. The end of Robert Mugabe reign brings hopes of reforms that should stimulate the investment. FDI is mainly directed towards the mining sector (diamonds, gold, nickel, platinum), infrastructure, the wood industry, health care, water and sanitation, financial services, tourism, manufacturing and agriculture. China is the first investor in Zimbabwe. Russia, Iran and India are also important investors in the country.

The government seeks to attract FDI and has implemented the Zimbabwe Investment Authority (ZIA), which is the country's investment promotion body set up to promote and facilitate both foreign direct investment. In recent years, Zimbabwe has made it easier to obtain building permits, obtaining loans and resolving insolvency. However, the unpredictability of the government’s economic policies and the unstable political and economic climate in recent years has undermined foreign investment. The country has a very rich natural potential (second largest reserve of platinum and chrome; diamonds, coal, gold, platinum, copper, nickel, tin) and an adequate infrastructure (except for recurrent power cuts), which represent genuine assets to foreign investors. Nevertheless, the government reserves certain part of the economy to national investors and refuses to privatise some firms. Additionally, the country has a program of naturalisation through investment (CBI). The "law of indigenisation" (applied in certain sectors) requires foreign investor to concede 51% of their capital to native Zimbabweans. In addition, in late 2013 a law was passed which forbids foreigners from owning small business in Zimbabwe. Foreign investors have been dominating the local mergers and acquisitions scene, with 73% of all approved mergers since June 2017 concluded by foreign parties. Some of the biggest M&A deals in recent years were a merger between Linde AG and Praxair incorporation, as well as the acquisition of 49% shareholdings in Niculata Investments Limited by Vilmorin Singapore (Pvt) Limited, in 2018.

What to consider if you invest in Zimbabwe

Strong Points

Zimbabwe's strong points in terms of attracting FDI include:

- abundant mineral resources (platinum, gold, diamond, nickel);
- agricultural wealth (maize, tobacco, cotton);
- potential for tourism development;
- membership of the Southern African Development Community (SADC);
- normalisation of relations with the international community.

Weak Points

The factors hindering foreign investment in Zimbabwe include:

- economic and financial situation hit by a long period of hyperinflation;
- shortage of cash;
- under-investment in infrastructures (especially energy infrastructure);
- precarious food and health situation: the majority of the population depends on international aid;
- AIDS prevalence rate among the highest in Africa and in the world.

Government Measures to Motivate or Restrict FDI

While the government of Zimbabwe has implemented since 2009 a number of measures designed to attract foreign direct investment (FDI), many of its macroeconomic policies, such as the indigenization and economic empowerment laws, acted as significant deterrents. Following recent political changes, the new government amended indigenization, or local ownership laws, to reduce the restriction to only the diamond and platinum sectors; other sectors are now open to unrestricted foreign ownership. Moreover the government has announced its commitment to improving transparency and removing corruption.

Zimbabwe’s incentives to attract FDI include tax breaks for new investment by foreign and domestic companies and allowing capital expenditures on new factories, machinery, and improvements to be fully tax deductible. The government also waives import taxes and surtaxes on capital equipment. Tax inventives may be obtain in certain sectors such as pharmaceuticals, energy, construction, agriculture and mining. To learn more about inventives for investment, please visit Zimra website.

Bilateral Investment Conventions Signed By Zimbabwe

Zimbabwe has signed 32 bilateral agreements. For more details, please see the UNCTAD website.

Procedures Relative to Foreign Investment

Freedom of Establishment

Although Zimbabwe law guarantees the right to private property, in practice the government often does not respect this right. In fact, in recent years the government has seized thousands of farms and private conservation sites without following due process or provide compensation.

Government involvement is necessary for any new investment in strategic sectors such as energy, public water supply and railways.

The government further reserves certain sectors such as passenger busses, taxis and car hire services, employment agencies, grain milling, bakeries, advertising, dairy processing and estate agencies for Zimbabweans

Acquisition of Holdings

While there is a right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity, foreign ownership of businesses in the diamonds and platinum sectors is limited to 49 percent (or less in certain reserved sectors).

Obligation to Declare

Zimbabwe does not have an online registration process. The Zimbabwe Investment Authority (ZIA) is the country's investment promotion body set up to facilitate both foreign direct investment and local investment. The country encourages companies to register with ZIA and the process currently takes 90 days.

Competent Organisation For the Declaration

Zimbabwe Investment Authority (ZIA)

Requests For Specific Authorisations

Anyone running a trade or the business of selling or renting goods or merchandise must be licensed by a competent local authority.
Factories are required to have a license showing compliance with certain health & safety and environmental requirements. Tourism operators must be registered with the Zimbabwe Tourism Authority. Other areas require a specific license, such as publishing, banks, mining, insurance companies and telecom operators.

For more information, please visit Zimbabwe Investment Authority website.

Investment Opportunities

Investment Aid Agency

Zimbabwe Investment Centre

Tenders, Projects and Public Procurement

Africa Getaway, Tenders in Africa
DgMarket, Tenders Worldwide

Other Useful Resources

Zimbabwe Revenue Authority
Zimbabwe National Chamber of Commerce

Any Comment About This Content? Report It to Us.