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Zambia

 
   

Executive Summary
The Republic of Zambia is a landlocked country located in the Southern part of Africa. Angola, Botswana, Zimbabwe, Mozambique, Malawi, Tanzania and Democratic Republic of Congo are its neighbour countries. Zambia covers a total area of 752,618 sq km. Lusaka is the capital of Zambia; English is its official language, but a number of local minor languages are recognized as regional languages.

Zambia has adopted a political model as a presidential representative democratic republic. The President of Zambia is the head of the country and the head of the government at the same time. The government has executive power, legislative rights belong to the parliament and the government.

Traditionally, the economy of Zambia was mainly based on the copper mining, however, economic diversification importance has been stressed by the government in the recent years, pointing out the necessity to develop tourism, agriculture, gemstone mining and increase hydro power production. Licenses are granted to foreign companies engaged in working with minerals such as nickel, copper, tin and uranium.

Poverty is a significant problem of the country; it has a low annual GDP per capita and income is not distributed equally among different population groups. Maternal mortality and low life expectancy at birth are important social indicators. In addition, other negative characteristic traits of the country are related to always increasing problems caused by HIV/AIDS, such as increase of medical costs, and decline of labour productivity. Reforms are necessary for ensuring a country’s sustainable development.

The Zambian Kwacha (ZMK) is the official currency of the country.

Geography
The landscape of Zambia is rich with hills and mountains, beautiful river valleys, picturesque waterfalls, as well as flat and broad plains in the Western part of the country.

Zambia has mainly a tropical climate which is altered in the elevated territories. November-April is a rainy period, while May-October is a dry season. May-August is the coolest time of the year.

Map, Flag and Coat of Arm

 


Types of Company

Sole Proprietorship

This type of a business structure is fully owned by one person, who is fully liable for its debts and obligations.

Partnership
Two or more entities cooperate together under a common name. Relationship of all parties involved in the partnership is usually regulated by a partnership agreement.

Private Company Limited by Shares
It is the most widely used type of company for conducting a business activity in Zambia. It must have at least two shareholders and two directors.

Public Company Limited by Shares
A name of this type of company must end with “Public Limited”, in order to identify that this company is allowed to offer its shares to the general public.

Branch of a Foreign Company
Any foreign company, wishing to conduct a business activity in Zambia, must be registered in the country as a local company submitting all the requested documents. The parent company is liable to the local company’s debts and obligations up to the capital invested. Accounts of the company must be audited and filed with the Companies Registrar.

Taxation
A tax year starts on the 1st of April and ends on the 31st of March.

Personal
A resident of Zambia is a person who spends at least 183 days in the country during a tax year and who intends to become a resident there.

Individuals are liable to pay income tax, which has a scalable nature. It is levied at different rates from 0% to 35%, depending on the total amount of the annual income. A medical levy is applied at a rate of 1% on interests. Social security contributions are payable by employers and employees.

No gift, inheritance or wealth tax is levied.

Corporate
Corporation tax is levied at a rate of 35%. Companies, undertaking certain activities, such as farming, may be granted tax exemption or incentives for a certain period.

Withholding tax on dividends, rents and interests is applied at a rate of 15%. Income which derives from sale of capital is tax free, as there is no capital gains tax. Mineral royalty tax and property transfer tax are levied as well. A standard rate of VAT is 17.5%; several goods and services are exempted from the VAT.

 
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