Zimvest would like to wish it's clients a prosperous new year and all the best for 2010. We hope that the bilateral investment
agreement signed on the 27 th of November 2009 will continue to entice Investors into Zimbabwe.
The Bilateral Investment Promotion and Protection Agreement
(BIPPA), was signed in the capital by trade ministers from both
countries.
"We want this BIPPA between our two countries to work. BIPPA is
a document signalling to the world that Zimbabwe is ready for
investments," Elton Mangoma, Zimbabwe's trade minister, said after
the signing ceremony.
What does this mean ? Realistically it means that any Investor from South Africa now is afforded Government protection for his/her/it's investment. We believe that now political risk cover will be afforded more easily to those wishing to invest in Zimbabwe and this in tuen will allow finance houses to look at Investment in Zimbabwe.
A key facet to our burgeoning gold mining book which is growing by the day is to have finance available for what is an extremely capital intensive business. Ask us for more information on our mining book.
In other news - below is a link to an
interview MD Shaun Lightfoot gave to Mining Weekly detailing the opportunities and
constraints of investment in mining in Zimbabwe.
We have summarized further the key incentives and deductions we believe are important;
Zimbabwe Investment: Key Incentives and Deductions
Mining: Income tax on Mining companies shall be levied at a flat rate of 15 %. All Capex incurred wholly and exclusively for mining operations shall be allowed as a deduction at the rate of 100%. Royalties on minerals are extremely low, but are non tax deductible and are charged on a gross fair market value. There is a 5% withholding tax on dividends for Zimbabwe Stock Exchange (ZSE) listed companies and 10% for all other companies. There shall be a duty exemption for customs duty, surtax and VAT on all capital goods during the exploration phase of a mining project , and for a period of up to five (5) years from the date of grant of mining title, during the development phase thereof.
Tourism: Currently all tourist operators are allowed duty free exemptions on vehicles imported for their operations. In addition, investors in areas designated as Tourism Development Zones (TDZ) enjoy 0% tax on first five (5) years of operation, thereafter 15% and 20% for the second and third five (5) year periods. Full refund of duty on all capital expenditure for use in TDZ’s. Normal corporate tax is 30%.
General/Other: There are various other tax incentives; for example any commercial and industrial development in growth point areas attracts a flat 10% tax rate for the first five (5) years. The Minister of Finance may from time to time designate such growth points. Any BOT projects have the same tax incentives as the mining companies. 100% repatriation of any original capital investment upon disinvestment. Licensed investors qualify to obtain residence permits upon fulfilling requirements which include a min investment threshold of USD 100 000.00 per investor. 20% income tax for a manufacturing or processing company which exports 50% or more of its products. 100% of dividends after tax may be remitted by foreign investors. Goods and services can be paid for offshore. Exporters can now keep their export proceeds indefinitely in their Foreign Currency Accounts (FCA’s)
