June2013Page1

ApplicationManualfor

Investors

CertificateofRegistration

andotherLicenses

PublishedbytheZambiaDevelopmentAgency©2012

ASupplementto

“ZambiaInvestorGuideHandbook”(June2013)

and“Zambia:Africa’sNewFrontierforInvestmentsandProfits”

(FourthEdition,2012)

ZAMBIA

1.GREETINGFROMZDA

OnbehalfoftheGovernmentoftheRepublicofZambia,Iwouldliketoexpressmy

sinceregratitudeforyourconsiderationofourcountryasapossibleplaceforyoutodo

business.Thelastfourdecadesofouryoungnation’sexistencehasprovedthatthecountry

ofZambiaisthebestexemplarofnationalpoliticalstabilityinSouthernAfrica.Zambia

hascompletedits6thmulti-partypeacefulpoliticaltransition,whichincludeaPresidential

bye-electionwiththeSeptember2011ElectionsbringingthePatrioticFrontasanew

governmentintopower.Whilewe,thenewgovernmentofZambia,willstrivetobringnew

systemsandapproachestothewaysofgovernmentinourcountryinordertoimprovethe

livesofourpeopleandbringgreaterefficiencytoourinstitutions,atthesametimewewill

alsoremaindevotedtopromotingeconomicdevelopment,nurturingofinvestmentin

ZambiaandexpandingZambia’spresenceintheglobaltradingplatform.Inorderforour

nationtocontinueitsjourneytowardsbecomingadevelopednation,webelievethatyou,

theinvestor,andthoselikeyouplayacrucialroleinthisjourneyandthatwe,the

government,andyou,theinvestor,mustcooperateandsupporteachothersothatwemay

allgrowtogether.

Zambia’sminingindustryhasbeenakeyresourcefortheworldeconomy,attracting

investmentfromacrosstheglobe.ButitisnotZambia’sonlyindustryandthereisawide

rangeofgrowingsectorsthatwearepromotingtodriveZambia’seconomic

diversification.OurareasofparticularfocusoverthenextfewyearswillbeinAgrobusiness,

livestock,fisheries,tourism,manufacturing,energyandinfrastructure.Withyour

investmentinZambia,wehopethatnotonlywillournationbeabletogainintermsofnew

employmentandtechnologicaladvancement,butthatyouaswellwillgainwith

unparalleledreturnsonyourinvestmentandbyattainingafootholdintotheSouthern

Africanmarketsthroughwhichyoumayexpandyourbusinessandinvestment.Astravelers

overcenturieshavecomethroughZambia,understandandconnectedwiththenationsand

societiesofthisregion,wehopethatyoutowillfindZambiaasasafeandstablestarting

pointforyourinvestmentasyoumoveintotheSouthernAfricanregion.

OnbehalfoftheZambianDevelopmentAgency(ZDA)whosemandateistopromote

tradeandinvestmentintheRepublicofZambia,Iamhonoredtoprovideyouwiththis

“User-friendly”ApplicationManualforInvestorsandwithitthefullsupportand

customer(investor)friendlyassistanceoftheZDA.

Zambiais“Africa’sNewFrontierforInvestmentandProfits”.Profitsforyouandthe

communitiesinwhichyouwilloperate.Ihopethatyouwillchoosetoinvestinthisgreat

nationandthatyourpresencewillserveasafoundationforthemutualbenefitand

friendshipbetweenyouandournationinthenearfuture.

Respectfullyyours,

AndrewChipwende,DirectorGeneralofZDA

ZDAClientCharter

OURVISION

TobecomeaworldclassAgencyforpromotionandfacilitation

oftradeandinvestment.

OURMISSION

Topromoteandfacilitateinvestment,trade,competitivenessand

developmentofmicro,smallandmediumenterprises

byprovidingcomprehensiveservicesin

atransparent,innovativeandefficientmanner.

OURCOREVALUES

•Integrity

•Dynamism

•Professionalism.

•Passion

•TeamSpirit

•Accountability

CHARTERREVIEW

Strivingforserviceexcellence,ZDAwillcontinuallyseektoobtainthe

viewsofourclientsthroughcommentchannels,regularone-to-onemeetings

andannualinvestorevents.Thisinput,togetherwithinternalreviews,willbe

usedtoreviseourclient.

Wearecommittedtocontinuousreviewandimprovementofallservice

deliveryandwelcomeclientinvolvementthroughcommentstotheManagerof

CommunicationsandPublicRelations:

E-mail:info[ta]zda.org.zmTel:+260211220177Fax:+260211225270

TableofContents

1.GREETINGFROMZDA...2

2.ZDACLIENTCHARTER..3

3.FLOWCHARTOFZDAAPPLICATIONFORCoR5

4.PROCEDURESFORAPPLICATIONFORCoR..6

4.1Overview6

4.2STEP1:ConsultationandPreparationofDocuments7

4.3STEP2:SubmissionofApplicationForms.7

4.4STEP3:ReceiptofCertificateofRegistration7

5.APPLICATIONFORINVESTMENTINCENTIVES8

5.1Overview8

5.2STEP1:ConsultationandDocumentPreparation8

5.3STEP2:ReceiptofFinalApprovedSchedule8

5.4STEP3:ApplicationforCorporateTaxIncentives..8

6.APPLICATIONFORIMMIGRATIONPERMITS.9

6.1Overview9

6.2STEP1:ConsultationandDocumentPreparation9

6.3STEP2:ReceiptofPermits..9

7.OTHERREQUIREDLICENSES/PERMISSIONS9

7.1EnvironmentalImpactAssessment(EIA)9

7.2TelecommunicationsLicense.9

7.3TourismLicense9

7.4FinancialandNon-FinancialInstitutions..10

7.5InsurancePermit.10

7.6Medical-relatedLicense.10

7.7StockBrokerRegistration..10

7.8ManufacturingLicense10

8.FREQUENTLYASKEDQUESTIONS(FAQ)...10

8.1AcquisitionofCertificateofRegistrationProcess.10

8.2ImmigrationIssues.11

8.3InitialFundsandFinancing12

8.4InvestmentPromotionandProtectionAgreements(IPPA)12

8.5ApplyingforIncentives..13

8.6InvestmentSectors,PrioritySectors,andOwnership.13

Annex1CoRRequiredApplicationDocumentsChecklist..15

Annex2ListofPriorityandMFEZPrioritySectors16

Annex3ApplicationforCoRFormandAnnexes18

Annex4ApplicationforCustomsDutyExemption.24

Annex5ApplicationforImmigrationStatus..25

Annex6ImmigrationRequirementsChecklist.26

3.FLOWCHARTOFZDAAPPLICATIONFORCERTIFICATEOF

REGISTRATION(CoR)

Generalconsultationthrough

meetingwithaZDAofficer

Information/guidance

giventoinvestor.

Applicationformissued

Investorprepares

necessary

documentsand

submitstoZDA

officer

Step2:Submission

ofApplication

InvestmentPromotionofficer

reviewsdocumentsandadvises

whentherearemissing

documents.Forcomplete

applicationsinvestorproceedsto

thenextstep.

Investorpaysprocessingfees

toaccountsandbringsa

receipttoZDAofficer

Officerfilestheapplication

tothesystemserverwhich

canbeaccessedbyall

investmentpromotionstaff

Step3:ReceiptofZDA

CoRwithin72hrs+.

SeniorInvestmentofficer

screenstheapplicationand

checksforsuitability

Applicationisprocessedand

recommendedforapproval

IssueApprovalletterCertificateprocessing

Certificatesigningbythe

DirectorGeneral

CertificateofRegistration

issuedtotheinvestor.

CertificatesigningbyDirector

CorporateServices

Step1:Consultation

Box1:BenefitsofHoldingaCoR

Non-FiscalIncentives

OnceyouholdaCoRyouwillbeentitledtothefollowingnonfiscalincentives:

Investmentguaranteesandprotectionagainststatenationalization;

Freefacilitationinapplyingforimmigrationpermits,secondarylicenses,landacquisitionsand

utilities;and

Theabilitytoownlandunderthecompany’sname.

FiscalIncentives

Ifyouinvest$500,000ormoreinaprioritysector,youwillbeabletoreceive:

Acorporatetaxrateof0%foraninitialperiodof5yearsfromthefirstyearprofitsaremadeby

yourcompany.Foryears6to8thereafteryourcorporatetaxratewillonlybeappliedto50%of

yourprofitsandthen75%oftheprofitsinyear9to10;

Dividendsshallbeexemptedfromtaxfor5yearsfromtheyearoffirstdeclaration;and

Improvementallowanceof100%CapitalExpenditureonimprovementorfortheupgradingof

infrastructure

SuspendedCustomsDutytozerofor5yearsonmachineryandequipment.

OtherIncentivesApplicabletoCoRHolders

AsaCoRholder,youwillalsobeentitledtotheincentivesof:

ExemptionfromtaxesondividendsdeclaredbyacompanylistedontheLusakaStockExchange;

Exemptionfromtaxesondividendsdeclaredbyacompanyintheassemblyofmotorvehicles,

motorcyclesandbicyclesindustriesforaperiodoffiveyearsfromthedateoffirstdeclaration;

Dutiesoncomputerpartsbeingreducedfrom15%tozeropercent;

4.PROCEDURESFORAPPLICATIONFORACERTIFICATEOFREGISTRATION

4.1Overview

EveryInvestor,regardlessofwhethertheyarepotentialorestablishediswelcometovisittheZambia

DevelopmentAgency(ZDA)andspeaktoanyoftheInvestmentPromotionOfficers(IPO).The

InvestmentPromotionOfficersareintheofficeofthegroudflooroftheZDAbuilding,andtheofficeis

openeverydayoftheweekfrom08h00-13h00and14h00-17h00.

TheIPOwilldiscussthevariousopportunitiesinZambia,taxstructure,investmentpolicies,and

immigrationrequirements.Thisconsultationprocessisnecessaryfortheinvestortofullyunderstandthe

investmentprocedure,stepstotakeandtheexpectedoutcomes.Thisprocessalsohelpsyoupreparefor

yourapplicationfora“CertificateofRegistration”(CoR),customsdutyexemptionsandimmigration

permitapplications.

Therearenolimitsontheamountofinvestmentrequiredtobemade,however,therearesome

minimuminvestmentthresholdstoqualifyforcertainbenefits,specifically:

NolessthanUS$250,000inordertoqualifyforanInvestorsPermit;and,

NolessthanUS$500,000inordertoqualifyforspecialtaxincentivesforPrioritySectors

orproducts(alistofsuchsectorsandproductscanbefoundunderAnnex2).

Oncereceived,theCoRisvalidforten(10)yearsfromthedateofissueandyoumayapplyforits

renewalpriortothedateofexpiry.

WhenyoumakethedecisiontoapplyfortheCoR,youwillbeguidedbythe(IPO),stepbystep

shouldyouneedassistance.ThefollowingstepsareundertakeninyourapplicationforCoR.

Dutiesonthefollowinginputsforthetextileandclothingmanufacturingbeingreducedfrom15%to

zeropercent:

oGreyfabric;

oWovenfabric;

oSewingthreads;and

oSewingmachinespareparts;

Dutiesonselectedmachineryusedinthetextileandclothingmanufacturingbeingreducedfrom5%

tozeropercent;

Dutyoninputsusedinthemanufacturingofroofingsheetsbeingreducedtozeropercentfor5years

effectivefrom2006

Dutyonallmachinery,fixtures,equipment,tools,motorvehicleparts,motorcyclepartsandbicycle

partsusedinthemanufacturingofmotorvehicles,motorcyclesandbicyclesbeingreducedtozero

percentfor5yearseffectivefrom2006;

Dutyonmaterialsusedinthemanufacturingandpackagingofcementbeingreducedtozeropercent

for5yearseffectivefrom2006;

Abilitytoexternalizationof‘After-Tax’incomewithoutrestriction.

4.2STEP1:CONSULTATIONANDPREPARATIONOFDOCUMENTS

(A)WhenyouarereadytoapplyfortheCoR,theIPOwillprovidegeneralguidelinesonhowthe

applicationprocess,incentives,immigration,theminimumrequirementsyouneedtomeetandthe

paymentmethodsinvolved.Youarethenpermittedtotakeyourapplicationformtogetherwith

proceduresandguidelinesforcompletionoftheformandpreparationofallnecessaryattachments.

4.3STEP2:SUBMISSIONOFAPPLICATIONFORMS

(A)OnceyourapplicationiscompleteandtheIPOhasanalyzeditandissatisfied,youarethenexpected

topayK1,280.00totheaccountsdepartmentasprocessingfee.Youwillbeissuedwith2receipts,

onebeingtheoriginalforyourrecordsandsafekeepingandaduplicatethatyouresubmittotheIPO

asproofofpaymentforyourfile.

(B)Yourapplicationisthenenteredintotheapplicationsapprovaldatabaseandimmediatelyforwarded

totheSeniorInvestmentPromotionsOfficer(SIPO)forfurtheranalysis.

(C)Yourapplicationwillthenbesubjectedtointernalanalysisonseveralpointssuchasviabilityofthe

project,economicimpact,andjobcreation.

(D)Duetothenecessitytoanalyzetheprojectbyseveralofficials,somedelaysmayarise;however,the

approvalprocesstakes3-5workingdaysoftheofficialsubmission.

4.4STEP3:ReceiptofCertificateofRegistration

(A)Afteryourlicensehasbeenapproved,youareadvisedtopaythelicensefeeofK7,670.00tothe

accountsdepartment.

(B)YourlicensewillbeaccompaniedbyaletterfromtheDirectorGeneraladvisingthesectionunder

whichyourlicensehasbeenapproved.Ifyourlicenseisapprovedundersection68oftheZDAAct,

thenyourprojectwillnotbeeligibleforSpecialTaxBenefitsasprovidedforundertheAct;

however,ifitisapprovedunderSection56,youarethenadvisedtofillintheCustomsDuty

ApplicationFormprovidedforbytheIPO(Annex3).