Special Economic Zones (also referred to as free zones) in Zimbabwe represent designated geographical areas within an economy, where business activity is subject to different rules from those prevailing in the rest of the economy or A SEZ is a geographical region that has economic laws that are more free-market-oriented than a country's typical or national law. These rules pertain to investment conditions, trade, customs and taxes. In Zimbabwe, both foreign and local investors are legible to invest in the special economic zones.

The most common objective around the world is to attract foreign direct investment (FDI), as a means of boosting exports, links to global value chains and structural transformation of the economy. In trying to promote the development of SEZ, Zimbabwe has established Zimbabwe Investment and Development Agency (Zida) which handles bureaucracy challenges and investment approval processes, legal instruments, as well as fees for permits and licenses. There are special incentives that are afforded to investors that invest in the Special Economic Zones and some of those special incentives are listed below. These include

  1. CORPORATE TAX
    Zero-rated Corporate Income Tax for the first 5 years of operation with a corporate tax rate of 15% applying thereafter
  2. CUSTOMS DUTY ON CAPITAL EQUIPMENT
    Duty free importation on Capital Equipment
  3. SPECIAL INITIAL ALLOWANCE
    Special Initial allowance of 50% of cost from year one and 25% in the subsequent two years
  4. EMPLOYEES TAX
    Exemption from Non-residents tax on fees for services that are not locally available
  5. NON-RESIDENTS WITHHOLDING TAX ON FEES
    Exemption from Non-residents tax on fees for services that are not locally available
  6. NON-RESIDENTS WITHHOLDING TAX ON ROYALTIES
    An exemption from Non-residents tax on royalties
  7. CUSTOMES DUTY ON RAW MATERIALS
    Inputs which include raw materials and imported for use by companies set up in the SEZs be imported duty free. The duty exemption will, however not apply where such raw materials are produced in Zimbabwe.
  8. CAPITAL GAINS TAX
    Zero-rated Capital Gain

Recently the Zimbabwe Investment Development Agency (Zida) Bill that regulates Special Economic Zone Administration was signed into Law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.