Self Employment, Tariffs and Regulations

All about Self Employment, Tariffs and Regulations in Zimbabwe, How to Register Your Business in Zimbabwe, How Much Will it Cost to Register Your Business and more on Mywage Zimbabwe.

What are the procedures  and costs involved in the registration of companies in Zimbabwe?

The following are bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new business in Zimbabwe.

Below we examine the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees.

No.

Procedure

Time to Complete

Associated Costs

1

 

Register the company name with the Chief Registrar of CompaniesThe reservation is valid for 30 days and can be extended for another 30 days for an additional fee.

7 days

USD 5

2

File memorandum and articles of association with the Registrar of CompaniesThe law provides for model or boilerplate articles of incorporation. on the date of incorporation, the Registrar of Companies must be notified of the appointments of the company’s directors and secretaries. This is done by filing the particulars (a) of register of directors and secretaries and any changes therein or a list of directors and principal officers (Form CR 14) These documents must be accompanied by a duplicate original or a printed notarized copy.

In practice, companies usually start up with a low amount of capital to avoid the exorbitant stamp duty. A company may also issue shares at a premium to circumvent the requirement.

14 days

Registration Fee is US$5.00 for every US$100.00 or part thereof of the nominal/ authorised capital of the company with a minimum fee of US$100.00

3

Register with the tax authorities for income tax, VAT, and PAYE Upon formation, a company must register at the regional Zimbabwe Revenue Authority Office. A copy of the company’s certificate of incorporation is required for the Collector’s records, along with the memorandum and articles of association and a certified copy of the identification of the assigned public officer. The company will be issued a registration number, as well as the current tax tables and the pay-as-you-earn (PAYE) receipt books. The P8 and P6 Forms now must be generated by the applicant itself and are not freely available. The ITF 16 Form must be completed in consultation with the Income Tax Office. According to Zimbabwe’s Finance Act (as amended), companies must now budget to pay all their company tax within the trading year. The tax must be paid as follows: 10% by the 25th of March, 10% by the 25th of June, 40% by the 25th of September, and the balance of the estimated tax for the tax year by the 20th of December.

Firms with a turnover of US $60,000 must register for VAT with the Zimbabwe Revenue Authority (ZIMRA). An application must be made on an Application for Certificate of Registration (Form VAT 1), which, along with Forms VAT 2 and VAT 3, is found at ZIMRA website). Firms with a turnover of less than ZWN 120 billion may apply for voluntary VAT registration.

14 days

no charge

* 4

Register with the National Social Security Authority for pension and Accident Prevention and Compensation Scheme. The employer and the employee must each contribute 4% of employee gross monthly salary.

14 days (simultaneous with procedure 3)

no charge

* 5

Register with the Manpower Development Fund. Employers must register with, and contribute 1% of their wage bill to, the state-run Manpower Development Fund. The fund allows employers to recover expenses when employees complete training.

1 day (simultaneous with procedure 3)

no charge

* 6

Pick up the form of license application notice from the City Health Department

1 day, simultaneous with procedure 3

USD 20

* 7

Advertise in a local newspaper the application for a trade and business license A trade and business license applicant must publicly announce the proposed application twice in a local newspaper. The form, Notice of intention to apply for the issuance of a new license, is available from the City Health Department. The first notice must be published no more than 6 weeks, but at least 4 weeks, before the application will be heard by the licensing authority. The second notice must appear 7 days after the first notice. Any objections to the application must be submitted in writing to the licensing authority within 7 days of the second notice.

4-6 weeks, simultaneous with procedure 3

USD 30

8

Submit an application form for issuance of new licenses to the Licensing Office in Harare Municipality. Two copies of the application forms are submitted and proof of both publications in a local newspaper of a notice of intention to operate a business. On receipt of the application, the Licensing Office requests a police report on the applicant, as well as a report on the person who will be in actual and effective control of the premises to which the application relates. The Licensing Office also seeks a report from the Harare Town Planner to ensure that the application is consistent with the zoned use of the premises.

Application for the license can start once the Registrar of Companies grants its approval of the company name. It is also possible to apply for a temporary license pending the grant of the full license, which can take up to a month or longer.

30 days

UDS 530

* 9

Licensing officers visit the company site and inspect the company site to check if the intended premises are suitable for the intended use. The criteria used by the officers are specified in the relevant by-laws.

1 day, simultaneous with previous procedure

no charge

* Takes place simultaneously with another procedure.

What are the benefits of registering a business?

There are important benefits that flow from registering a business namely:

A registered company has more credibility. Having a business that’s not registered is a signal to potential customers and partners that you’re not serious. A registered company is an entry-level commitment and sign that you’re not just a fly by night operation or shadow business as so many in Zimbabwe have become.

Big opportunities often require registration papers. Big government tenders and dealing with many big companies will often demand that you are able to produce your papers in one form or another. You may be capable of doing the job perfectly and at the best price, but you could lose the opportunity if you’re not registered.

No registration papers? No corporate bank account. Again, if you’re dealing with larger amounts, most corporates will not pay you in cash. In fact, some investors or securities will not even consider you without looking at your banking history. You cannot get a corporate bank account without being a registered business. If you’ve been keeping your cash under the mattress, isn’t it time to move to the next level?

If you’re building a real business, you MUST be registered. There are things you do to make a quick buck here and there, and then there are things you do for the long-term – like your dream business or a business you hope to sell for massive profit one day. If your company is not registered, you will be disadvantaged and even hinder your business’s growth.

Registration proves you exist! This is important for tax-related issues and VAT. It’ll also prove important should you end up in court to defend you rights in some matter.

Registration helps to protect your brand. You could invest significantly into building a name and reputation, only to watch someone else legally enjoy all the benefits because they’ve started a competing business and they own your name! Not much you can do to stop them if your business is not registered!

How do you register your business?

In Zimbabwe there are two ways to register your company namely:

Buy a “shelf company”: a shelf company is a business that for the most part has already been registered. All you have to do is buy it, change the directors’ names and you’re done. It’s supposed to be faster and easier in every way. Truth is though, it’s NOT. These days it’ll take about the same amount of time and in some cases much longer to go the shelf company route. It’s also not really any cheaper (except in some artificial pricing scenarios by some consultants).

 Register a business from scratch: registering a business from scratch is the second and by far the best option. It allows you the most flexibility and branding power later. You’ll need to come up with at least four or five possible names for your name search.

How do you find a suitable name for your business?

Don’t try to win any creativity awards. This is more science than art so don’t waste days or weeks trying to find the perfect name.

Keep it simple. Your name should be easy to pronounce and spell. No silent letters or out of the ordinary punctuation marks.

Tie your name to your line of business. I should be able to look at your name and without any help, at least have a clue about what you do. Think “Chicken Inn”, “Securico”, “Floorcare”, “Agri-Bank”. Sure, you could use a name like Coca-Cola, Kodak or Apple…but be prepared to spend a massive amount of money on branding to help customers associate that name with your line of business.

Make it as unique as possible. Uniqueness refers to your industry or domain, not in the world. Unless you’re using words and sounds or geographic qualifiers like (Zimtech, Zimsun or Zimnat) coming up with a completely original name may be difficult. I’d recommend going for a name that’s unique in your industry. 

Finally, submit your names in order of priority. When you submit your list of names to be registered, please remember to write them in order of preference. That way, if you don’t get your most wanted name, the company registrar’s office knows which one on your list you’d next prefer.

Read more

Take our Salary Survey to see where you fit in on the jobs and wages scale.


Loading...