It is essential to register your business for safety and security reasons before official operations commence. Be it a local business or an international business; registration should be taken as a core value for any investor in the process of starting a business in Zambia.
In Zambia, the body responsible for registering companies and businesses is called the Registrar of companies. The registrar of companies issues out certificates of compliance for foreign enterprises and companies. In addition, local companies are given certificates of incorporation, while sole proprietorships and partnerships are given certificates of registration.
According to the Zambian Companies Act of 2017, foreign investors are free to own a company solely and own a local company without incorporating any Zambian shareholders.
In Zambia, investors usually register their local businesses as limited liability companies. This could be regarded as a private or public company.
How to register a foreign business in Zambia
Search the company name online to confirm if it’s being used already or if the name is already in existence.
Online name search costs ZMK 83, while name reservation costs ZMK 166. (Jan 2022) Patent and Companies Registration Agency do the clearance. The bodies are governed by the Patents and Companies Registration Agency Act of 2010 and the Registrations of business names Act of 2011.
The commissioner of oaths signs the declaration of compliance (form 11).
The business registration has to be done with the Patent and Companies Registration Agency.
Upon registration, the business owner must submit the following documents;
Application for incorporation (Company form 2)
Declaration of consent to act as a director or Secretary (Company form 5)
Declaration of compliance (company form 11)
Registration of a foreign company (Company form 46). This is required only when an Investor puts a branch of a foreign company in place. This form must be accompanied by a copy of the certificate of incorporation from the home country, the charter, regulations, statuses, MOU, articles of association and any other documents required by PACRA.
The registration forms must indicate the information below;
The name of the business.
A corporate body or an individual who resides in Zambia (they must be authorized as the documentary agent).
Note: The application fee is paid when the registration process is done. Upon completion of registration, the investor is given a certificate of Registration to confirm that the process is complete and the business has been successfully registered.
1. Acquiring a tax ID number
In order to acquire TIN (tax identification number), the investor has to file a certificate of incorporation and register with Zambia Revenue Authority.
2. Registering with Social Security
If you are an investor then you are required to register with National Pension Scheme Authority. Registering with NPSA requires you to file a certificate of Incorporation.
3. Clearing business Levy
Before business operations commence, the investor has to pay the business levy first. The business levy fee has to be cleared with Lusaka City Council.
4. Registering for Value Added Tax (VAT)
Registering for VAT is mainly for businesses or companies that manufacture goods. An investor must get a VAT tax number only if the value of taxable supplies exceeds approximately 800,000 in twelve consecutive months or ZMK 200,000 in three consecutive months. Registering for VAT must be done with the Zambia Revenue Authority.
5. Acquiring an investment registration certificate
Getting an investment registration certificate is optional for all investors. To get this certificate, you must have invested at least $250,000. The Development Agency of Zambia does the issuance of the certificate. The certificate is issued upon inspection of premises to ensure the use of registered premises is uniform with the operational activities of the business.
6. Opening a bank account
If you are an investor, you are free to open a bank account only if you have successfully obtained a foreign taxpayer registration ID. However, there are several banks in Zambia that investors can access to secure accounts for their businesses.
7. Acquire the necessary licenses and permits
The kind of licenses and permits that an Investor has to acquire must specifically depend on the type of business or company one runs. For instance, if a company is involved in manufacturing food and related products or businesses involved in handling consumables might be required to obtain a health clearance and food hygiene license.
Employees of such businesses have to acquire a food handler’s medical certificate.
8. Obtaining a fire clearance certificate
A fire clearance certificate must be obtained by all businesses. The issuance of this certificate is based on the council in which business activities take place. The fire clearance certificate lasts for a year, and it’s renewable.
(a) Business operation permit
The business permit is harmonized and processed throughout the country. However, the issuance is done at the council level.
Business activity is chargeable, and the fee depends on the investor's activity and the number of workers. A business operation permit is issued only when business premises are ready.
(b) License to manufacture excisable goods
Businesses involved in manufacturing and importation (excisable goods) have to get an excisable goods license from the Revenue Authority of Zambia.
Registering a local company in Zambia
A company is a voluntary business association of two or more people formed to make profits. A business is a legal entity separate from its members and is incorporated for a lawful purpose. In Zambia, a company is deemed to be in existence if it is registered under the Companies Act No.10 of 2017.
You can register a local company either as a public or private company. A private company can either be;
Limited by shares
Limited by guarantee
How to register a local private company limited by shares;
A private company limited by shares offers liability to its shareholders but restricts ownership; for instance, it’s not allowed to sell shares to the public or a stock exchange market.
In order to register a private local company in Zambia;
Company form 3 must be filled and signed by both directors and shareholders. The applicant opts for non-standard articles of association, and the form must be logged in with articles.
Two or more directors are required, including the executive director who is residing in Zambia.
Company shareholders must be above 18 years of age and have a sound mind.
Under the Zambian laws, the company and the shareholders must have an undischarged bankruptcy.
There must be a company secretary registered in the company registration forms.
Four copies of the non-standard articles of association are a requirement.
The minimum nominal capital amount for a business to start operating is ZMK 15,000.
Certificate of Incorporation costs ZMK 150
Certificate of a share capital costs ZMK 175
Declaration of consent costs ZMK 150
Declaration of Compliance costs ZMK 150
Application for incorporation filed online costs ZMK 925. The forms listed above can be accessed online through the website of the Zambian registration authority at; www.pacra.org.zm.
Upon completing the registration process, a registration certificate is issued, legalizing your business to operate formally. At this point, you are free to start your business operations as an investor.
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