Business in Zambia

Zambia has a large micro and informal business sector. The 2022 official MSME survey recorded 1,553,892 MSMEs: 98.8% were micro businesses, 1% small and 0.2% medium; 95.6% operated informally and 4.4% formally. Sole proprietors accounted for 78.3% of ownership, partnerships for 21.6% and cooperatives or groups for 0.2%. Agriculture, forestry and fishing represented 62.7% of activity, followed by other services at 19.2% and manufacturing at 9.1%. The 2025 Economic Establishment Census recorded 485,034 establishments, but it covers a broader and different population and cannot be compared directly with the MSME survey. A person can begin with own-account activity, but informal operation does not remove tax or licensing duties and does not provide PACRA legal-entity protection. A PACRA Business Name gives a commercial name but remains unincorporated, has no separate legal personality and generally leaves the owner or partners with unlimited liability. A partnership follows the business-name registration path and also does not create a separate company. A local company is a separate legal person with perpetual succession and limited liability, subject to unpaid shares or guarantees. A cooperative suits a collective enterprise and follows the Ministry of Small and Medium Enterprise Development and cooperative registration path. A foreign company or branch registers with PACRA and requires separate attention to tax and immigration or work permissions. PACRA registration normally starts with name clearance. An applicant submits three proposed names through the PACRA Portal, ZamPortal or a PACRA office. A cleared name is valid for 30 days, and a reservation can add up to 90 days. Applicants must be at least 18, of sound mind and discharged from bankruptcy. The current published fees in the research material are K120 for name clearance, K213.33 for reservation and from K1,266.67 for local-company incorporation; business-name and other fees change, so the current PACRA fee schedule controls the transaction. Business Name Form III, Companies Form 3 and Foreign Company Form 38 apply to the respective registration paths. A registration certificate is not a business licence, tax clearance or ZDA certificate. PACRA-registered businesses generally receive a Taxpayer Identification Number, or TPIN, through registrations made after 2020 and then complete their ZRA tax account. Older entities may need manual assistance. Non-resident companies use the ZRA TPIN path together with the PACRA certificate or Form 38. For annual sales up to K5,000,000, Turnover Tax can apply; annual sales up to K30,000 are taxed at 0%, while sales above K30,000 up to K5,000,000 are taxed at 5% of gross turnover. Partnerships are excluded from Turnover Tax. The return and payment are due 14 days after the end of the sales month. Higher turnover can lead to Income Tax, while VAT, customs, withholding tax and other taxes depend on the activity and transaction. A business also checks the Zambia Business Licensing Portal using its location, industry and business type. Licensing may involve a national authority, Lusaka or another municipality or town council. A typical sequence is business registration, TPIN and tax clearance, followed by activity and location licences. A local council Business Levy Certificate is often required for lawful operation, but there is no single licence bundle for every business. Fire, health, food, liquor, tourism, mining, agriculture, import and export, professional and sector permits can apply. Fees, validity periods, processing times and inspection requirements vary by authority, activity and location. During operation, a company files its PACRA annual return within three months after the financial year-end and keeps its directors, secretary, members, shareholders and beneficial-ownership information current. A beneficial owner is the individual who ultimately owns or controls the business. A director or secretary change uses Form 10 within 21 days. Non-filing can create a strike-off risk. Tax records should be kept for at least six years, and each licence must be renewed with its issuing authority. Written partnership, shareholder and supply records reduce disputes. PACRA can also register trademarks, patents and designs. The Ministry of Small and Medium Enterprise Development supports formalization, incubation, mentoring, business information, grants, market links and business-plan capacity. The Citizens Economic Empowerment Commission, or CEEC, provides product-specific empowerment finance and preferential procurement or reservation opportunities; eligibility can require formal registration, current annual returns and audited accounts. The Zambia Development Agency, or ZDA, issues Enterprise Certificates for qualifying MSME investment projects and Investor Certificates for local or foreign direct-investment projects. An MFEZ Operator Permit applies to an enterprise in a multi-facility economic zone. Incentives are sector- and project-specific, and an enterprise cannot receive incentives without the required licence, permit or certificate. The PACRA Movable Property Registry can support security interests over equipment, livestock, crops, fish, inventory, receivables, bank accounts and other movable assets. Financing terms themselves belong to banking rather than business registration. A sole activity can later move from a business name to a local company, but the change is not automatic. The owner first ceases the Business Name with BN Form XIII and then completes new name clearance and incorporation. A company ownership or control change requires updated PACRA shareholding and beneficial-ownership records. A sale of shares or business assets can also require seller and buyer TPINs before the ZRA property-transfer-tax return. Permits, contracts, tax liabilities, incentives and assets require separate checks because a licence or incentive does not automatically transfer to a buyer. To close a Business Name, the owner uses BN Form XIII while keeping annual-return obligations current and checking the current PACRA fee and processing requirements. Voluntary deregistration of a local company uses Companies Form 44, a special resolution, an account summary, a statutory declaration by at least two directors confirming no debts or liabilities, and surrender of the certificate. After notice publication, a 90-day period normally applies before deregistration unless a stated cause changes the process. Earlier liabilities remain enforceable. Debt or insolvency requires liquidation, receivership or business rescue under the Corporate Insolvency Act rather than simple deregistration. Tax accounts, licences, employees and creditors also need separate closure steps. Formalization can improve access to contracts, finance and support, but it adds annual-return, tax, licensing and disclosure duties. There is no single Zambia-wide startup cost, processing time or licence list. The exact council, activity and location should be checked through the responsible authority before trading, and current fees and online procedures should be verified when the transaction is prepared.