02/05/2021
INVESTMENT LAW IN ZIMBABWE
The Zimbabwe Investment Development Agency Act [Chapter 14:37] (ZIDA) was passed into law in February 2020 by the President. ZIDA deals with the promotion, entry, facilitation and protection of investment in Zimbabwe. The Act was introduced as part of the government’s broad efforts to harmonise investment laws and to promote investment in Zimbabwe. ZIDA is also part of Government's efforts to create a friendly business environment that is attractive to investors, both local and foreign.
ZIDA repealed the Zimbabwe Investment Authority Act [Chapter 14:30], Special Economic Zones Act [Chapter 14:34] and Joint Ventures Act [Chapter 22:22]. Prior to the passage of ZIDA into law, these repealed pieces of legislation regulated different aspects of our investment law. Our approach was very fragmented. Also prior to ZIDA, ministries/departments conducted investment-related duties separately from each other and also in terms of distinct laws. With the advent of ZIDA, all issues relating to investment in Zimbabwe are now regulated by one legislation and government departments now co-odinate in their investor-related duties.
ZIDA contains critical provisions for investment approval, facilitation and protection. ZIDA establishes the Zimbabwe Investment Development Agency (the ‘Agency’), which has very broad functions and powers. Its main function is to facilitate entry, approval and implementation of investment projects. The Agency also has functions of establishing and regulating special economic zones. The Agency also provides investors with post-establishment services to support investment retention and expansion as well as monitoring the operations of registered investors.
The Agency has powers to cancel or suspend investment licences if obtained fraudulently or ceded to another person without its approval. Investor licences can also be cancelled or suspended in instances where an investor fails to implement the investment within a stipulated time period or violates any of the conditions of the licence.
ZIDA creates One-Stop Investment Services Centre which is supervised by the Agency. This One Stop Investment Services Centre consists of representatives of several government departments who are ceased with investment related issues. These include the Immigration department; Zimra; Tourism Authority; Reserve Bank; Environmental Management Agency; Companies Registration Office, National Social Security Authority; Energy Regulatory Authority; Ministry of Mines and Minerals, Ministry of Labour and Local authorities.
The harmonisation of investment laws and the creation of a One Stop Shop for investment services will go a long way in improving our ease of doing business. It is also worth noting that ZIDA provides legal protection for Investments in Zimbabwe. Investors are thus allowed to expatriate their profits.
Investors also have access to legal remedies when their rights are violated. ZIDA also guarantees equal access to courts and protection against denial of justice in criminal and civil and administrative proceedings. Furthermore investors are also protected from having their investments expropriated by the State except in terms of a law of general application to fulfill a legitimate public purpose or goal. In such an event in terms of ZIDA an investor is entitled to compensation which is equivalent to the market value of his investments prior to expropriation and such compensation must be paid promptly.
In conclusion the passage of ZIDA is a significant step in promoting investment in Zimbabwe. However more is still required to create a conducive environment for business. Resolving the country's economic and political challenges will also go a long way in attracting foreign investment. Even the process of approving & registration of investors can be enhanced by the creation of online platforms. Services such as company registration can also be done online to make the process more efficient.
Kindly note that the above information is for educational purposes and cannot be construed as Legal advice. Always consult with your lawyer or consultant for detailed information on what best suits your individual interests.
