Company formation in Zambia

Before deciding to set up a new company in Zambia, read the information below to understand the characteristics of a Private Company limited by shares (Ltd):

Shareholders: a minimum of 1 shareholder who can be an individual or a corporate entity. But the number of shareholders must not exceed 50. There are no residency requirements for shareholders.

Director: the company must appoint at least 2 directors or more directors. The number of directors, including the executive director, who should be resident in Zambia, shall not be less than half the number of directors appointed. They do not, however, need to be Zambian citizens.

Company secretary: a company must have a secretary; the secretary may be a corporate body; 2 or more persons may act jointly as the secretary of a company; the secretary of a company shall be (a) resident in Zambia, if an individual OR (b) incorporated in Zambia, if a corporate body.

Minimum share capital: nominal capital required is K 15,000 (~ $552).

Legal address: the company is required to have a registered office in Zambia for official correspondence.

Liability: the shareholders are not responsible for the company’s debts.

Accounting: the company is required to file annual returns, maintain proper accounting records.

• The standard CIT is 30%.
• But companies operating in certain sectors have a different CIT:
• income from farming and agro-processing is taxed at 10%;
• income from other non-traditional exports is taxed at 15%;
• telecommunications companies are taxed at 35%.

• The rates are the following:
• from K 0 to K 5,100 (~ $186) - 0%;
• from K 5,101 (~ $186) to K 7,100 (~ $260) - 20%;
• from K 7,101 (~ $260) to K 9,200 (~ $337) - 30%;
• from K 9,201 (~ $337) and above - 37%.

• The standard rate is 16%.
• VAT is not levied on all sales of goods or supply of services.
• The Value Added Tax Act of Zambia provides supplies of goods and services as either taxable or exempt.
• From July 1, 2024, all VAT-registered taxpayers must issue electronic invoices through the Smart Invoice software solution implemented by the Zambia Revenue Authority.
• Companies are required to register as VAT payers in Zambia if their annual turnover exceeds K 800,000 (~ $ 29,311) per year.

Double taxation avoidance agreements in Zambia: ‍Botswana, Canada, China, Denmark, Finland, France, Germany, India, Ireland, Italy, Japan, Kenya, Mauritius, Morocco, Netherlands, Norway, Seychelles, South Africa, Sweden, Switzerland, Tanzania, Uganda and the UAE.