Zambia Market Entry

Zambia Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Entering the Zambian market is associated with certain disadvantages for Czech exporters, among which are the low purchasing power of the majority of the population, geographical distance and logistical complexity, bureaucracy, widespread corruption, the prevailing orientation towards traditional (mainly South African) suppliers, the absence of a bilateral contractual basis and in the case supplies for state entities in recent years, the rapidly deteriorating state of public finances and the growing risk of insolvency. The insurability of export credits is problematic; in the classification of OECD countries according to territorial risk, Zambia is in the 7th, i.e. the worst, level. Check smber for agriculture and fishing facts of Zambia.

The distribution of goods in Zambia is made difficult by the difficult transport accessibility of many places outside the larger cities. Goods are mostly imported into Zambia by trucks through the port of Durban and Port Elisabeth (JAR), less Beira and Nacala (Mozambique), Dar es Salaam (Tanzania) or Walvis Bay (Namibia). Shipping from the port can take several weeks.

There are no barriers to direct sales in the country, e-commerce is developing rapidly. However, it is often more advantageous to establish a relationship with a reliable local (or South African) partner (importer, distributor, representative). Consumer goods can be redeemed on the local market through distributors and wholesalers or directly through retail (mostly South African) chains (Shoprite, Spar, PicknPay, Woolworth). In most cases, the basic decision-making criterion of potential distributors is price.

Customs administration is carried out by the Zambia Revenue Authority (ZRA), on whose website you can find information on customs procedures and the customs tariff. In addition, ZRA also issues licenses for production enterprises exempted from any form of customs duties or taxes, for customs warehouses and other regulations regarding the import and export of goods. ZRA verdicts can be contested through the Revenue Appeals Tribunal. The relevant law governing the collection of taxes and duties is the Customs and Excise Act.

The basic import documents are an invoice containing the names of the supplier and recipient of the goods, the name of the goods, unit and total price and quantity data, certificate of origin of the goods, Bill of Lading or Air Waybill, packing slips Blade). The Import Declaration Form is filled out for statistical purposes. ZRA standardly applies the CIF (Cost, Insurance and Freight) method to determine the amount of duty. However, when comparing the declared value of the goods with similar import cases, complications may arise from the side of the customs administration.

Roughly speaking, customs rates are divided into three categories. The first includes raw materials and means of production subject to an import duty of 0% – 5%, the second includes semi-finished products (15% duty) and the third includes finished products subject to a 25% duty. Preferential tariffs are applied to goods originating in the Common Market of Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC). Most goods are subject to an import VAT of 16%. From 1 January 2022, a zero VAT rate applies to the import of a number of agricultural machinery and equipment (manure spreaders, balers, harvesters, irrigation systems, feed mixers, granulators, food dryers, etc.). Consumption tax is paid when importing tobacco products (145%), alcoholic beverages (usually 60%),

Imports of medicines, veterinary products, hospital equipment, computer components, fertilizers and seeds, machinery for the mining industry, agriculture and fish farming and solar-powered equipment (street lamps, solar regulators) are exempt from duty. Further tariff reductions are possible for some investment units and equipment and for most materials and raw materials used by the local manufacturing industry. Until the end of 2023, the collection of customs duties on the import of cars used for safaris and tourist buses is suspended – the aim is to support tourism. Companies investing more than USD 0.5 million in Zambia and operating in priority economic development sectors defined by the Zambia Development Agency Act (manufacturing, infrastructure construction, energy and water management), companies operating in rural areas,

In addition to customs duties, imported goods are subject to other administrative, phytosanitary and other obstacles. These tend to be justified by the need to protect consumers and domestic production and mostly concern food imports. The importation of pornographic goods or goods threatening public morals, goods made by prisoners, objects originating from wild animals protected by CITES (e.g. ivory) is prohibited. The ad hoc increases in customs rates or complete bans on imports with the aim of protecting domestic producers, especially in the area of ‚Äč‚Äčagricultural commodities, are no exception.

Forms and conditions of operation on the market

The basic legal forms of businesses in Zambia are Private Limited Company (obdoba sro) with a minimum share capital of ZMW 15,000 and Public Limited Company (as) with a minimum share capital of ZMW 1 million. The newly established business/office should have at least one local management, at least one management member must have permission to stay in Zambia. A joint venture with a local partner is the preferred (and most widespread) form of a company with foreign participation. Franchising is also developing (hotel services, restaurant services, beverage production, tourism).

Zambia has set up a so-called one stop shop for foreign investors at the Zambia Development Agency (ZDA), which will help with all the formalities associated with setting up a company. The first step is to register the name and then the company or branch in the Patents and Companies Registration Agency (PACRA). WHETHER it is then necessary to submit a copy of the PACRA registration (Certificate of Incorporation), the company agreement, articles of association (must include the exact name and seat of the company, legal form, share capital, date of establishment, names of all statutory representatives), copies of identification documents management staff, proof of tax payer registration at the Zambia Revenue Authority and for social security purposes atNational Pension Scheme Authority, business plan, proof of financial resources and securing a place/land for business.

Marketing and communication

The promotional, marketing and advertising market is quite standardly developed and the methods are basically no different from European ones. All promotional and similar materials are in English by default. Advertisements in the press, large-scale billboards, advertising spots on TV or radio are common ways, and in recent years the importance of advertising on the Internet and social networks has been growing rapidly. All mass media can be used. The print media with the greatest reach are: Zambia Daily Mail, The Mast, Times of Zambia, Lusaka Times. The original monopoly of state television and radio ZNBC, which broadcast advertising spots, is gradually being limited by issuing licenses to private television and radio stations. Advertising on local radio stations is especially important in rural areas. A list of media in Zambia with contacts can be found on the websiteMedia Institute of Southern Africa. More than 80% of Zambians today use a mobile phone and around a third use the internet, where businesses routinely advertise. The most popular social network is Facebook, closely followed by Pinterest, Twitter, YouTube and Instagram.

Given the minimal awareness of Zambian consumers about Czech products, the need for effective marketing is generally important, so that they can assert themselves against already established South African and other (especially Asian) competition. Also in the field of marketing, it is advisable to keep in mind the rather conservative character of Zambian society and morals.

Issues of intellectual property protection

Zambia is a signatory to most international conventions and protocols aimed at the protection of intellectual property, including the Berne Convention for the Protection of Literary and Artistic Works and the Paris Convention for the Protection of Industrial Rights. As a WTO member, Zambia is a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). Zambia is also a member country of WIPO (World Intellectual Property Organization). The protection of intellectual property is enshrined in the Zambian Constitution and other laws (including the Copyright and Performance Rights Act, Registered Designs Act, Patents Act).

All intellectual property rights (patents, industrial designs, trademarks, copyright, etc.) should be registered in Zambia. The competent authority is the Patents and Companies Registration Agency (PACRA), under the Ministry of Trade and Industry.

In practice, however, the fulfillment of international obligations and own legislation is not at a satisfactory level. The sale of pirated music recordings, films, computer software, but also medicines and drinks, etc., is very widespread and the government does not have the capacity to suppress it. In addition, local courts are slow to resolve intellectual property disputes and lack experience in this area.

Public procurement market

Zambia has adopted the necessary legislation and established public procurement management structures up to the standard of developed countries. However, the system does not work very well in practice and Zambia continues to be criticized by international institutions such as the IMF and the World Bank for the lack of transparency in the awarding of public contracts, the high level of corruption manifested in this area and the persistent obstacles to the participation of foreign entities. They can apply for public contracts only in partnership with a domestic entity. According to surveys, in recent years approximately three-quarters of public contracts have been implemented with significant delays due to late payments to suppliers by public institutions. Moreover, in recent years, large public contracts have often been awarded directly without tendering. The vast majority of large infrastructure projects in the country are implemented by Chinese companies,

The Zambia Public Procurement Authority (ZPPA) should publish all government contracts and tenders above USD 80,000 on its website. In Zambia, an electronic public procurement management system ( e-GP System ) was introduced, which is supposed to facilitate the participation of foreign entities in tenders, but its use is not yet mandatory for all contracting authorities. Information on many advertised tenders continues to be available only in the local press. On the ZPPA website you can find a list of currently issued public contracts and information on upcoming public contracts. The ZPPA also functions as an appeal body for complaints about the course or result of the selection process.

Payment terms, payment ethics and resolution of commercial disputes

In the case of supplies of goods or services to Zambia, considerable caution is required on the part of the supplier. In the case of public sector supplies, repayment problems are practically the rule due to government insolvency and cannot generally be recommended without further ado. Even in the case of private entities, it is highly advisable to check the potential business partner thoroughly in advance (the Embassy of the Czech Republic in Lusaka can also help in this regard).

As for payment methods, advance payment or documentary credit can definitely be recommended. In the case of repeated deliveries and good knowledge of the business partner, it is also possible to proceed with payment after the delivery of the goods. It is very difficult for Zambian companies to obtain an import loan, but the same is the case with an export loan for a Czech company, because as of 2019, Zambia is in the 7th, i.e. the most risky, category according to the OECD territorial risk assessment (standard for the EGAP classification).

In case of non-fulfillment of obligations by the Zambian customer, it is possible to turn to one of the local legal offices providing assistance with the collection of outstanding claims. According to the references of European companies, you can use the services of, for example, B & M Legal Practitioners (contact: Mr. Mabvuto Sakala, tel. +260966876917 or +260 21 138 8702, e-mail: [email protected]). Possible disputes can be resolved by court or arbitration, even abroad, the decision is recognized in Zambia.

Visas, fees, specific conditions for traveling to the territory

Visa: Czech citizens need a visa to travel to Zambia. It is recommended to arrange visas in advance online, although most visas are also issued upon arrival at an international airport or upon entry at land crossings. The basic type of visa is a single-entry visa (25 USD) or a double-entry visa (40 USD) with a maximum validity of 90 days. For any work stay (i.e. also voluntary, non-profit activity), it is necessary to have a business visa and, for longer stays, a work permit. Travelers on a business trip are entitled to a free visa valid for 30 days once a year, but for repeated trips they must purchase a so-called temporary employment permit (price 13,500 ZMW valid for six months). An invitation letter from a Zambian company is required to obtain a business visa. Up-to-date information on visa fees and information regarding the various residence permits can be obtained from the Zambia Immigration website. A visa to Zambia can also be arranged in advance at the Embassy of Zambia in Berlin.

Travel document requirements: Passport, valid for at least 6 months from entry into Zambia, document must have at least 2 free pages. To combat human trafficking, parents traveling with children may be asked to present their birth certificates (translated into English). A parent traveling alone with a child may be asked to document the other parent’s consent to travel. If a traveler is coming to Zambia from a country with an epidemic of yellow fever, they may be asked to show proof of vaccination against this disease.

Specifics, security situation, recommendations for tourists: Zambia is a relatively safe country, but you need to follow the general principles and be aware that a European can already attract unwanted attention with his different appearance. Among other things it is not recommended to visibly carry large sums of money and valuables, to participate in gatherings of a particularly political nature, to walk in the city after dark, etc. Traveling in large cities, as well as in national parks, is generally safe during daylight hours, but serious crimes cannot be ruled out, such as armed robbery, burglary and sexual assault. There is a risk of pickpocketing and theft of parked cars in the vicinity of shopping centers, bus stations and city centers. Photography of military installations, government buildings and other strategic objects (including railway stations and airports) is prohibited. Travelers are advised to avoid political gatherings, demonstrations, etc. Shops are well stocked in Lusaka and larger towns. In Lusaka itself there are already several large shopping centers relatively corresponding to the standards known, for example, from the Czech Republic. In these places, in larger hotels and at modern gas stations, it is usually possible to pay with ordinary payment cards, and the network of ATMs is also gradually expanding. However, the number of frauds targeting debit and credit cards, robberies near ATMs, etc. is also increasing in proportion to this. Therefore, maximum caution is recommended in such transactions. Currencies can be changed in exchange offices or banks, on the contrary, it is not recommended to change money on the street. However, as a rule, only new series of foreign currency banknotes are accepted (not, for example, dollar banknotes issued before the year 2000).

Traffic: Drive on the left in Zambia, the maximum speed is limited to 50 km/h in the village and 100 km/h outside the village. All foreigners must have an international driver’s license. The condition of the road infrastructure is gradually improving, but many road sections are still in a state of disrepair. Road accidents are common throughout the country. The risk is particularly posed by poorly maintained vehicles, dangerous driving habits and stray animals. Fuel supply may be insufficient on some routes (e.g. Lusaka – Mongu) and it is necessary to pre-stock for longer journeys. It is fundamentally not recommended to travel at night. High-quality bus transport (air-conditioned, modern cars) is limited to only the most important lines.

Car rental is recommended through established international rental companies. The use of public transport in cities is not suitable, the use of taxi services is recommended (including transfers to the airport). Walking in big cities during the day does not pose a safety risk, but most roads lack sidewalks, and drivers are not considerate of pedestrians.

Health situation: Health facilities and telephone connections in Zambia are at a low level, especially in rural areas. Even basic medicines and clean needles may not be available. Emergency services are limited. Medical facilities in Zambia generally do not meet European standards in terms of equipment and availability of medical supplies. In the event of a serious illness or injury, the only solution may be expedited transport to, for example, the Republic of South Africa. Make sure you have adequate travel medical insurance and funds available to cover the costs of any medical treatment abroad and repatriation. When traveling to Zambia, vaccination against meningococcal encephalitis and jaundice type A and B is recommended. Prophylactic prevention against malaria is also highly recommended. Zambia is among the countries most affected by the HIV/AIDS epidemic.

Water used for personal hygiene in hotels and other accommodation facilities aimed at foreigners is mostly safe, but not recommended for drinking. It is also not recommended to consume food prepared on the street. On the contrary, it is possible to recommend even scrupulous adherence to the main hygiene principles (washing hands before eating, etc.). Where safe water is not available, there is a risk of cholera. The traveler can avoid the disease if he consistently drinks only water from verified sources (e.g. bottled water available in stores).

Employment of citizens from the Czech Republic

Although the lack of skilled workers is one of the main problems for foreign investors in the country, Zambia is very protective of its labor market and is quite reluctant to grant work permits to foreigners. Only a large investor can obtain a work permit relatively easily and only for a limited number of experts. The Zambian government prefers that foreign businesses train and employ local workers. When assessing applications for work permits, it is further taken into account whether the employment of a specific foreigner will be a knowledge or capital contribution to the national economy and whether it will not represent a potential financial burden for the state.

A work permit is required for work longer than 6 months and can be extended for a maximum of 10 years. The application for a work permit must be submitted by the prospective employer, a specialist lawyer or an immigration consultant, and must be processed before the worker arrives in the country.

The following must be submitted with the application:

  • Employer cover letter
  • Employment contract or job offer
  • Extract from the criminal record of the home country
  • Curriculum vitae
  • Certified copies of documents confirming qualification prerequisites
  • Copy of birth certificate, or marriage certificate
  • Certified copy of passport
  • Verified confirmation of the employer’s capital and statutory body
  • A copy of the plan for later transfer of knowledge/experience to the Zambian worker
  • A copy of the employer’s articles of association
  • In the sectors of construction, mining, ICT, engineering and other project activities, a cover letter specifying the relevant project, its completion date and the value of the project
  • Original job advertisements published in at least two leading Zambian dailies in A5 format and the result of the selection process
  • Passport photo
  • Applicable fee.

Detailed information and requirements are available on the Zambia Immigration website at

All employers are obliged to pay contributions to the pension insurance of employees. 5% is deducted from the employee’s gross salary, the employer also contributes the same amount. The National Pension Scheme Authority website has all the necessary information on pension insurance.

In 2019, a general health insurance system was introduced, into which both the employer and the employee (or self-employed person) contribute 1% of the gross salary. The system is managed by the National Health Insurance Management Authority, on whose website you can find detailed information and apply for insurance.

Fairs and events

The following major exhibitions and fairs are held annually in Zambia:

Agritech Expo Zambia: Held in April in the town of Chisamba near the capital Lusaka. It is the most important trade fair in Zambia, which in recent years has been attended by over 200 exhibitors (including Czech ones – with the support of the Ministry of Foreign Affairs and the Ministry of Foreign Affairs of the Czech Republic as part of the so-called PROPED projects to support economic diplomacy) and about 20,000 visitors. It is focused on a wide range of products and services for agriculture, such as seeds, fertilizers, veterinary preparations and services, agricultural machinery, irrigation systems, etc.

Other trade fairs held in Zambia are rather only of local importance:

Zambia Agriculture and Commercial Show: Held in August in Lusaka, focusing on a wide range of agriculture, industry and services

Zambia International Trade Fair: Held in June in the town of Ndola in the Copperbelt Province, a general trade fair

Copperbelt Mining, Agriculture and Commercial Show: Held in Kitwe, Copperbelt Province, focusing on the mining industry and agriculture

Zambia International Mining and Energy Conference & Exhibition: Held in Lusaka or Kitwe, focus on the mining industry and energy

Zambia Market Entry