A Message from the Zambia Development Agency

The Zambia Development Agency (ZDA) was established in 2006 2006 under Act No. 11 of 2006 and became operational in January 2007 after the amalgamation of five statutory bodies that previously operated independently. The primary objective of the Agency is to foster economic growth and development by promoting trade and investment in Zambia through an efficient, effective and coordinated private sector led economic strategy.
Its mandate includes facilitation of the economic development of Zambia by promoting investment and competitiveness of businesses and promoting exports from the country. It has the task of working with relevant authorities to reduce the cost of doing business in the country by simplifying the process of various formalities such as licensing.
The Agency’s aspiration is derived from the Government’s long term vision of creating a prosperous middle income nation by 2030 that feeds into the Agency’s goal of contributing to the creation of wealth and one million jobs by 2020. In other words, the Zambia Development Agency is the gate way to the Zambian economy.
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INVESTMENT TRENDS
A production of the Zambia Development Agency and Zambia National Broadcasting Services

INCENTIVES

Fiscal Incentives and Qualifying Thresholds
The Act provides for investment thresholds that have to be met to qualify for fiscal and non-fiscal incentives. Projects that qualify may be new or existing ones undergoing expansion or modernization. These are the categories of investors who can be considered under the ZDA Act.
Investors who invest not less than US$500,000 in the Multi Facility Economic Zone, an Industrial Park, a Priority Sector and invest in a Rural Enterprise under the ZDA Act, are entitled to the  following fiscal incentives:
  1. Zero percent tax rate on dividends for 5 years from year of first declaration of dividends.
  2. Zero percent tax on profits for 5 years from the first year of operation.
  3. Zero percent import duty rate on capital goods, machinery including specialized motor vehicles for five years.
In addition to fiscal incentives, the above category of investors is entitled to the following

Non- Fiscal incentives;

Investment guarantees and protection against state nationalization;
Free facilitation for application of immigration permits, secondary licenses, land acquisition and utilities

Investors who invest an amount not less than US$250,000 in any sector or product not provided for as a priority sector or product under the Act. This category of investors is entitled to non-fiscal incentives as follows;

  1. Investment guarantees and protection against state nationalization;
  2. Free facilitation for application of immigration permits, secondary licences, land acquisition and utilities
The Certificate of Registration is valid for ten (10) years from the date of issue.

The investor may apply for renewal of the Certificate of Registration before the date of its expiry.

Incentives for Mining Mining companies have additional incentives in addition to general ones as follows:

  • Period of carry forward of mining losses has been extended from 5 to 10 years
  • Withholding tax on interest, rent, consultancy, royalties and dividends is only 15 percent
  • The restriction of offsetting losses against profits which is limited to 20 percent for mines with a common owner have been removed so that 100 percent of the losses can be offset
  • Duty free importation of capital equipment and utility vehicles, capital allowance increased to 100 percent
  • Input tax claim for five years on pre-production expenditure for exploration companies in the mining sector
  • Zero rate on mining products for export
Please note that there is also a 30 percent corporate tax for mining.

Incentives for Agriculture Agriculture companies have the following specific incentives:

  • Dividends payable to farmers are tax exempt for the first 5 years of operation
  • Fifteen (15) percent income tax on farming profits
  • Capital expenditure on farm improvements qualifies for an allowance of 20 percent per annum for each of the first five years
  • Substantial rate of depreciation allowing farm machinery to be written off against tax
  • Special development allowances for growing certain crops: tea, coffee, bananas, citrus, and other similar trees
  • Input tax claim tax claim for three months prior to VAT registration for businesses that have already commenced trading
  • Reduction of VAT rate for in tax free zones
  • Selected agricultural equipment and accessories – zero rated for VAT: two wheel tractor and accessories; tractors up to 60 horse power; ploughs; harrows; disc harrows; planters; seeders; rippers; sub-soilers; cultivators; pump sets; treadle pumps; hip pumps; hand pumps; knap sack sprayers; and suction, delivery and lay flat hoses. other: hammer mills
​Incentives for Manufacturing Manufacturing companies have additional incentives as follows:
  • Refund of Zambian VAT on purchase and export of Zambian products by non-resident businesses under the commercial exporters scheme
  • Input tax claim for three months prior to registration for businesses that have already commenced trading
  • Input tax claim for two years prior to commencement of production
  • Duty on a number of raw materials has been reduced from 15 to 5 percent
  • Five-Fifteen percent duty on some categories of industrial machinery (e.g. industrial furnaces and ovens, printing machinery and machinery used in food production)
  • Custom duty rate on selected items used on manufacturing process has been reduced
Incentives for Tourism Tourism companies have additional incentives as follows:
  • Zero rate – tour packages
  • Zero rate – other tourist services
  • Refund to non-resident tourists and visitors
  • No import VAT on all goods temporarily imported into the country by foreign tourists
Export Incentives Incentives for exporting companies include:
  • Fifteen percent corporate tax instead of the normal tax bands
  • Special exemption from duty and VAT on imports and machinery is offered to exporters of non-traditional products

Multi-Facility Economic Zones (MFEZ) and Industrial Parks
  • No withholding tax on management of fees, consultancy, and interest repayments to foreign contractors
  • Supplies to developers of MFEZ and industrial parks- zero rated
  • Foreign supplies to the MFEZ and industrial parks exempt from reverse VAT charge
  • Raw materials, equipment and machinery imported for the development of MFEZ and industrial parks exempt for from customs duty
  • Zero percent tax rate on dividends for companies operating in MFEZ for a period of 5 years
  • Zero percent tax rate on profits for companies operating in MFEZ for a period of 5 years; year 6-8 (50 percent of profits taxed); year 9-10 (75 percent of profits taxed)

Taxation The tax rates in Zambia are as follows:
  • Standard: 35 percent
  • Mining: 30 percent
  • Farming: 15 percent
  • Non Traditional Exports: 15 percent
  • Personal Income Tax: 25 to 35 percent
  • VAT: 16 percent
  • Withholding Tax: 15 percent on rental income, consultancy, dividends and royalties for non-residents
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WEBSITE LINKS
Embassy of the Republic of Zambia in Washington DC
Zambia Development Agency
Ministry of Commerce Trade and Industry (MCTI)
​Bank of Zambia
Zambia Revenue Authority
Zambia Development Agency
Citizens Economic Empowerment Commission
Central Statistics office
Immigration Department
Mining sector
Registration of Companies and Patents
​Zambian Parliament
​State House
Energy Regulation Board
Lusaka Stock Exchange
Zambia International Trade Fair
Zambia Association of Chambers of Commerce and Industry
Zambia Export Growers Association
American Chamber of Commerce Zambia