Zimbabwe Market Entry

Zimbabwe 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

The import of goods from the Czech Republic to Zimbabwe is complicated by low purchasing power, geographical distance and logistical complexity, a high level of corruption, a lack of finance, a focus on traditional (primarily South African) suppliers and the absence of a contractual base. Establishing a relationship with a local reliable partner (importer, distributor, representative) is a basic condition for successful business. Check smber for agriculture and fishing facts of Zimbabwe.

Goods are mostly imported to Zimbabwe by trucks through the port of Durban (JAR), less so Beira (Mozambique). Czech goods are practically unknown in Zimbabwe and Czech companies do not yet have a network of local representatives in Zimbabwe. Consumer goods can be applied to the Zimbabwean market through distributors and wholesalers who have established distribution channels for local large retail chains (Pick n Pay, Bon Marché, Spar, Choppies, etc.). The basic criterion for most potential distributors is the price, which must be competitive with established, especially South African, suppliers.

The Zimbabwe-EU Business Information Center (EBIC) operates in Harare and Bulawayo, the main mission of which is to raise the awareness of Zimbabwean businesses about the EU market, possible EU business partners (importers and exporters), customs regulations, phytosanitary standards, consumer protection requirements, etc., current business opportunities, exhibitions and fairs in the EU, etc. EBIC thus represents a suitable place for obtaining business contacts.

Customs collection is done by the Zimbabwe Revenue Authority (ZIMRA), on whose website you can find information on customs procedures and a complete customs tariff. Customs rates depend on the type of goods, basically there is a basic tariff (15-20% for most goods, 0% for production equipment, 5% for fabrics, 60% for luxury goods), a customs surcharge of 10% and VAT of 14.5%. For goods originating from the countries of the Common Market of Eastern and Southern Africa (COMESA), or Southern African Development Community (SADC), preferential tariff rates apply.

The import and export of some items requires a special permit or license (e.g. a license from the Zimbabwe Medicines Control Authority for medicines or a permit from the Ministry of Agriculture or Veterinary Administration for staple foods/agricultural produce, products of plant or animal origin, seeds, live plants and animals). Lengthy licensing procedures make it difficult to import medicines and food supplements.

Importing goods into the country is logistically more demanding. Lengthy customs procedures and ubiquitous corruption must be reckoned with. The basic customs documents are the import permit (Bill of Entry), declaration of the value of the goods, invoices, which must contain the names of the supplier and the recipient of the goods, the name of the goods, the unit and total price and quantity data. Furthermore, the certificate of origin of the goods, Bill of Lading or Air Waybill, Packing List must be documented.

Forms and conditions of operation on the market

Foreign companies can operate on the Zimbabwean market through a foreign branch or representative office, but the preferred (and most widespread) form of a company with foreign participation is a joint-venture with a local partner. The Zimbabwe Investment Authority functions as a so-called one-stop shop, which should help handle all the formalities associated with establishing a business. It is also possible to use the services of a local lawyer.

The first step to establishing a company is to register the company name in the Zimbabwe Companies Registry (ZCR). The company is established at the founding general meeting, where the founding partners or their representatives meet (power of attorney certified by a notary is required). The capital is deposited into a bank account. In addition, the company agreement must be submitted to the ZCR (it must contain, among other things, the exact name and seat of the company, legal form, share capital, date of establishment, names of all statutory representatives) and articles of association. Furthermore, the company must register with the tax authority ( Zimbabwe Revenue Authority – ZIMRA), the social authority ( National Social Security Authority ) and the Manpower Development Fund). The last step is obtaining a license from the local administrative body (town hall, municipality). The incorporation of the company must be publicly published.

Marketing and communication

Promotion, marketing and advertising are quite well developed and, in principle, the methods do not differ from European ones. Common methods are advertisements in the press and specialist magazines, large-scale billboards, advertising spots on television or radio. All mass media can be used. The importance of promotion through the Internet and social networks is growing rapidly. The most important print media are The Herald, Daily News and NewsDay. Only the state-controlled ZBC, which also operates several radio stations, has television broadcasting rights.

Due to the minimal awareness of local 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 nature of Zimbabwean society and morals.

Issues of intellectual property protection

Zimbabwe is a signatory to most of the standard 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. As a WTO member, Zimbabwe is a signatory to the TRIPS Agreement. Zimbabwe is also a member country of WIPO (World Intellectual Property Organization). Zimbabwean laws formally provide protection for intellectual property, however the sale of counterfeit goods of all kinds is widespread and the government lacks the capacity to crack down on it.

Public procurement market

According to the law, all government contracts whose volume exceeds USD 300,000 should be awarded through a public tender. A special office, the Procurement Regulatory Authority of Zimbabwe, was established to coordinate and supervise tenders, with which those interested in public contracts should register. There is no central online register of public tenders in Zimbabwe, tenders are published mainly in the daily press or on the Internet (see e.g. Zimbabwe Tenders). Participation in custom tenders requires long-term monitoring of the situation with the necessary provision of relevant information even before the official announcement of tender conditions. This is practically impossible without a permanent presence on the local market. If a participant who did not succeed in the tender has doubts about the regularity of the competition, he can file an appeal with the above-mentioned authority within 14 days from the announcement of the tender result.

In the case of important contracts, the government very often makes decisions without tendering, and this process tends to be very non-transparent. Foreign companies usually prefer to participate in tenders issued by foreign institutions or donors (EU, World Bank, African Development Bank, etc.) that have secured financing.

Payment terms, payment ethics and resolution of commercial disputes

Zimbabwe is a member of the Multilateral Investment Guarantee Agency (MIGA), the Overseas Private Investment Corporation (OPIC), acceded to the International Convention on the Settlement of Investment Disputes (ICSID) of 1965, the New York Convention on the Recognition and Enforcement of Foreign Judgments of 1958 and is also member of UNCITRAL (UN Commission on International Trade and Arbitration Law). Despite being a member of these agreements, Zimbabwean courts have in the past mostly not recognized the decisions of foreign courts and arbitrations. The resolution of commercial disputes directly before the Zimbabwean courts is also a problem. In the past, the Zimbabwean judiciary has shown a very lax approach to the protection of foreign investors, especially in the case of expropriation of farms. In addition, local elites do not always respect court decisions.

A well-drafted commercial contract (preferably by a local lawyer) is essential for preventing and resolving commercial disputes. It is always necessary to thoroughly check the local partner (due diligence). The place of dispute resolution (if possible abroad) must always be specified in the commercial contract. The resolution of disputes through the courts in Zimbabwe is usually associated with high financial and time costs, therefore it is generally recommended to resolve the dispute by agreement or out of court settlement.

For supplier-customer relationships, the most common practice is advance payment (for lower volumes) or an irrevocable letter of credit. 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.

Visas, fees, specific conditions for traveling to the territory

Visas: Citizens of the Czech Republic can obtain tourist visas at any Zimbabwe embassy or at border crossings, including all three international airports (Harare, Bulawayo, Victoria Falls). The fee for issuing a visa at the border crossing is: USD 30 for one entry (valid for 30 days), USD 45 for two entries. It is paid in cash. Please note that this adjustment only applies to some EU member countries. A visa on arrival can only be obtained for tourist purposes, for other purposes a visa must be obtained before travel (volunteer work and missionary work for more than 30 days is considered work and a temporary employment permit is required).

Applications for a different type of visa must be submitted to: Embassy of Zimbabwe in Berlin, Kommandantenstrasse 80, 10117 Berlin, tel.: +49/30/206 22 63, fax: +49/30/206 22 63. Obtaining a visa at the Zimbabwean embassy can be lengthy as the consular officer cannot issue a visa without the approval of the immigration police in Harare. Approval can take several days or even several weeks.

Travel Document Requirements: A valid passport with a minimum validity of six months from the visa issue date. Parents traveling with children may be asked to present their birth certificates, a parent traveling alone with a child may be asked to document the consent of the other parent for the trip. When arriving from a country where yellow fever occurs, it is necessary to show an international vaccination card with a valid vaccination against this disease. A visitor to Zimbabwe may be required upon entry to the country to demonstrate sufficient funds for the duration of the stay and to ensure departure from the country (return ticket, funds to purchase it).

Specifics, security situation, recommendations for tourists: Due to the protracted economic crisis, there are regular mass protests and strikes by civil servants. The police intervenes very hard against the demonstrations, using tear gas, batons and other means of coercion. Travelers to Zimbabwe are therefore strongly advised to avoid all gatherings, especially political ones. Photographing members of the police and armed forces or demonstrations is not permitted.

No vaccinations are mandatory when traveling to Zimbabwe, but vaccinations against yellow fever, meningococcal encephalitis and jaundice type A and B are recommended. AIDS is widespread in Zimbabwe. Malaria prophylaxis is recommended in low-lying areas (mainly Lake Kariba, Victoria Falls and Hwange and Gonarezhou National Park areas). At higher altitudes, including the largest cities Harare and Bulawayo, the risk of contracting the disease is low. Where safe water is not available, there is a risk of cholera. 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.

Traffic: In Zimbabwe, you drive on the left. The maximum permitted speed in the village is 60 km/h and outside the village 120 km/h. The main road stretches are tolled. If the stay does not exceed 90 days, a driver’s license issued in the Czech Republic can be used, but it is recommended to use an international driver’s license. Traffic accidents are a common cause of death and injury in Zimbabwe. There are often deep potholes on the roads. Traffic lights are often out of order. Travelers are advised to obey all traffic police orders, stop at police checkpoints and toll gates and present documents when requested. You should insist on receipt of any fine you have to pay. If the presidential motorcade is passing you in any direction, stop immediately, failure to stop is an offence.

Public transport is at a low level. Bus transport between the largest cities is characterized by a wide range of offers ranging from minibuses to air-conditioned modern buses. The technical quality of the vehicle fleet of local carriers is highly variable. However, even with new buses in good technical condition, their drivers do not respect road traffic rules, and their passengers are thus frequent victims of traffic accidents. Outside the main roads, passenger transport is often limited to paid hitchhiking or does not exist at all.

Domestic air transport is provided by the state-owned Air Zimbabwe and the private company FastJet. Air Zimbabwe was denied permission to operate flights to the EU because the airline was unable to demonstrate that it met international aviation safety standards. Travelers traveling to and within Zimbabwe are therefore advised to prefer the second of the named companies.

Health situation: Health facilities in Zimbabwe suffer from severe shortages of basic equipment and supplies. Satisfactory medical care can only be provided in the largest cities, in the event of a serious illness or injury, the only solution may be rapid transport to, for example, the Republic of South Africa.

Employment of citizens from the Czech Republic

In the case of employing non-resident foreigners, it is necessary to obtain a work permit and subsequently a residence permit from the Immigration Office, on whose website you can find detailed conditions for individual types of permits. In principle, the application for a work permit must be accompanied by confirmation of a job offer from the future employer, agreed salary, working conditions, proof that the position was advertised in Zimbabwe, there is a lack of local expertise for it and no way will be found in the foreseeable future for this local ensure expertise. In general, it can be stated that this is a lengthy, administratively demanding process. In the case of foreign investments above USD 100,000, a work permit for foreigners is usually granted for three years with the possibility of extension to five years.

The government encourages foreign companies to make maximum use of local workforce. The employment of local workers is governed by the Labor Law, which very rigidly protects the rights of employees and restricts the labor market.

Fairs and events

The most important regularly held trade fairs in Zimbabwe are as follows:

  • The Zimbabwe International Trade Fair, the country’s largest general exhibition event, is held annually in late April in the city of Bulawayo
  • Mine-Entra, a mining and infrastructure trade fair held in the city of Bulawayo every July
  • Zimbabwe Agricultural Show, an agricultural exhibition held annually in Harare

More events and fairs can be found on the Zimbabwe International Trade Fair Company website.

Zimbabwe Market Entry