How to Register a Company in Zambia
The last decade has been quite phenomenal for Zambia as it continues to register a healthy growth rate of 5%, making it the fastest-growing economy in Africa. The sectors contributing to this growth include mining, agriculture, tourism, automotive, retail, etc. Foreign entrepreneurs belonging to domestic or foreign territories can venture into these sectors and reap consistent profits for years to come. To begin How to Register a Company in Zambia, you need to abide by some legal requirements, which this blog will unfold and discuss the same in detail.
Checklist to Register a Company in Zambia
The following checklist entails all the vital points you must consider for How to Register a Company in Zambia.
- Foreign applicants can form a company in Zambian territory with a single director. Also, there is no requirement to appoint local shareholders. Generally, a structure like a limited liability company is popular among businesses seeking establishment registration.
- Clearance from PACRA i.e., Patent and Companies Registration Agency is vital when legalizing a business name. The institution falls under the Patents and Companies Registration Agency Act (2010).
- The PACRA also oversees and regulates the licensing formalities.
- Applicant must file a separate form 46 when registering a branch office of an already existing entity in Zambia.
- The applicant must apply to secure a tax ID from a competent authority.
- To register a firm and authorize the appointment of the director, you must file forms 5 and 11, respectively.
Business structures available in Zambia for registration
Zambia offers an array of business structures to choose from. Each structure adheres to distinct incorporation legalities and post-registration compliances. Below are some common business structures available for registration:
Private Limited Company (Ltd):
- Acknowledged as a popular business type, the private limited company offers an array of benefits to the business owners such as limited liability, definite management control, and zero ambiguity among members.
- Requires only one director and a shareholder for incorporation purposes.
- Public share trading is not possible.
Public Limited Company (PLC):
- A PLC is eligible to conduct a public share trading.
- It requires a minimum threshold of share capital to incorporate as a public limited entity.
- Unlike a private limited company, PLCs follow strict compliances relating to operation and disclosure of financial statements.
Branch Office:
A branch office refers to an extended arm of an overseas entity operating outside Zambia. The BOs are not liable to comply with the Zambian laws. However, before starting a business operation, BOs must legalize their existence with the Registrar of Companies in Zambia.
Partnerships:
- Partnership refers to a legal entity formed by two more individuals having a common business objective.
- Partnership firms are classified into two types: General partnerships and Limited partnerships, each adhering to distinct management structures and liability requirements.
- Partnership firms have no separate legal identity, which means the owner and the firm shall be treated as a single entity. This can attract unlimited liabilities for the owners.
Sole Proprietorship:
A sole proprietorship refers to a business model that is registered and helmed by a single individual. Although it does not attract any establishment legalities, sole proprietors are required to secure certain approval and industry-specific permits depending on which industry they serve.
Non-Governmental Organization (NGO):
NGOs are broadly known as charitable entities that work for society’s betterment, raise awareness about the environment, and uphold the unprivileged.
Documents to register a company in Zambia
The common documents required for how to register a company in Zambia are as follows:
- Memorandum and Articles of Association
- Company registration Form 1
- Notice of Registered Office
- Declaration of Compliance assuring that all regulations have been met
- Statement of Nominal Capital
- Form 7 serves as a consent form that ensures that directors are competent to serve their position
- Copies of identification documents for directors, CS, and shareholders
- Business place proof
Steps for how to register a company in Zambia
Depending on who is applying, be it an applicant or an agent, the application procedure differs slightly. If you appoint an agent, you must apply documents reinforcing the agent’s identity. However, if you choose to take the charge yourself, you need to follow the given steps:
Step 1: The applicant must visit PACRA to visit search and validate their business name.
Step 2: Signed the declaration from the commissioner reflecting all the compliance has been met.
Step 3: File forms 5 and 11 with PACRA to register your entity and authorize the appointment of the director.
Note: Attach the form with constitutional documents like the Memorandum of Association and Article of Association.
Step 4: Once you successfully apply, proceed with fee submission. The incorporation fee varies depending on the type of business structure you have chosen.
Step 5: This step involves securing a tax ID number from the Zambia Revenue Authority. While applying for a Tax ID, make sure to submit documents like business registration and authorized signatory details alongside the prescribed form.
Step 6: If your entity leverages the manpower to uphold the operation, make sure to register with the National Pension Scheme Authority.
Step 7: Pay the business levy to the concerned authority as it is mandatory to make your business operational in a specific jurisdiction.
Step 8: You must secure the VAT number i.e., Value Added Tax if the threshold of your taxable supplies surpasses ZMK 800,000 in any consecutive three months.
Step 9: Step involves opening a bank account with a designated bank. The common documents required to serve this purpose include business registration, authorized signatory’s ID, business place’s address proof, etc.
Note: Overseas applicants must secure the foreign taxpayer registration ID before they attempt this step.
Depending on which business niche you serve, you need to secure industry-specific approval from your respective department. For example, most food businesses are required to secure food handler’s medical certificates since they use manpower to uphold their operation. Similarly, businesses that are prone to fire-related mishaps are liable obtain to a fire clearance certificate.
Conclusion
Zambia is an apparent choice for growth seekers and aspiring entrepreneurs seeking to make their mark in sectors like mining, agriculture, tourism, automotive, retail, etc. But to ensure that your growth doesn’t become stagnant, you need to have an upper hand in operational and registration-related legalities.
That is why we recommend you proceed professionally, preferably under the guidance of an expert firm like Adviso.
Whether you want to resolve complicated legal matters or want to know about how to register a company in Zambia or any nation in one go, our expertise on all such requirements is second to none.
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