The Government actively supports, facilitates, and rewards new companies in all sectors of enterprise and this support is equally available to indigenous and foreign-based companies without any discrimination whatsoever against offshore companies. Large and small enterprises are equally welcome.
The 1993 Investment Act guarantees foreign investment against compulsory acquisition or nationalization without compensation.
Time-wasting procedures that may confront foreign investors elsewhere have been eliminated in Zambia and legal requirements have been reduced to an absolute minimum. Streamlined processing of paperwork and rapid decisions, guided by the Investment Centre, greatly facilitate all aspects of importation of equipment and export of products.
Zambia’s Investment Centre, located in central Lusaka, was set up under the Government’s “Open Door” policy to encourage and support investment in the country by foreign nationals. Tailored fast-track services include:
- Providing information for the planning stages of a project and organizing exploratory visits to Zambia.
- Assistance in evaluating projects, preparing proposal documents, and obtaining approvals.
- Formation of local and foreign companies and establishment of joint ventures with indigenous Zambian companies.
- Sourcing of short-term and long-term equity and loan finance.
- Company secretarial services and staff recruitment.
- Feasibility and investment studies to ascertain the technical, commercial, and economic viability of projects.
Foreign Exchange System
The economy has been completely liberalized and thus exchange rate are determined entirely by the market forces of supply and demand for foreign currency.
There are no exchange controls whatsoever, in line with the absence of restrictions on externalizing profits, dividends or royalties.
The Central Bank (Bank of Zambia) is responsible for executing and implementing the Government’s monetary policy and licensing of commercial banks. The bank is currently pursuing, successfully, a “tight” policy characterized by curtailed money supply in order to reduce both inflation rates and bank lending rates.
Commercial banking is provided by local and international banks which offer a wide range of financial sources. Major international banks include Barclays Bank, Citi Bank, Standard Chartered Bank, and Stanbic Bank; the larger local banks include Zambia National Commercial Bank, Finance Bank, and Indo-Zambia Bank.
Sources of Financing
Zambia is a member of a number of international and regional organizations through which private-sector companies can seek support for development of new projects. Medium-term funding is available from the European Investment Bank, the Commonwealth Development Corporation (with the Zambia Venture Capital Fund), the Zambia Development Programme (World Bank), and Japanese Grant Aid. Longer term investment can be sought from the International Finance Corporation (World Bank) and the Commonwealth Africa Investment Fund.
Company registration is undertaken through the Registrar of Companies at the Ministry of Commerce, Trade and Industry. The law requires that foreign investors wishing to conduct business in Zambia should apply for and obtain an Investment Certificate from the Zambia Investment Centre. The Centre has a legal department to help such investors register their companies, within three days, and the Centre’s Business and Investor Relations department will help investors obtain work permits for any expatriate staff. The Immigration Department meets twice a week to consider applications for work permits, and the Investment Centre has senior liaison officers at the department to ease the issuance of such permits.
Business and Professional Organizations
The strengthening and expansion of Zambia’s economy has seen a growth in the number of business and professional organizations in the country.
Chief amongst these are:
- The Zambia Association of Chambers of Commerce and Industry (ZACCI)
- The Zambia Association of Manufacturers (ZAM)
- The Economic Association of Zambia (EAZ)
- The Zambia Institute of Certified Accountants (ZICA)
The Zambia Association of Manufacturers in particular represents a large number of companies that can offer a range of supporting services to the mining and minerals industry, thus permitting incoming companies to operate on a low-cost basis.
Due to the monolithic nature of the mining industry in the past (predominantly copper), no Chamber of Mines has been established but the recognition that the current high-level of investment in mining and exploration will lead to the emergence of such an organization is welcomed by the Government.