Zambia-Investors Tax Heaven


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Zambia-Investors Tax Heaven

  1. 1. African Country known as Investors Paradise ...... Salient Features for Investment - Overview
  2. 2. A Brief on Zambia <ul><li>Area:752,644 Sq.Km </li></ul><ul><li>Population:11.8 Millions </li></ul><ul><li>Capital City: LUSAKA </li></ul><ul><li>Other large cities: </li></ul><ul><ul><li>Ndola – (349,300); </li></ul></ul><ul><ul><li>Kitwe – (306,200); </li></ul></ul><ul><ul><li>Kabwe – (219,600); </li></ul></ul><ul><ul><li>Chingola – (151,100); </li></ul></ul><ul><li>Official Language: English Is Government Language,7Other Languages are official languages </li></ul><ul><li>Government: Parliamentary Democracy </li></ul><ul><li>Political Stability: Stable Government, More than 30years political stability with least political turmoil is observed. </li></ul><ul><li>Riots/ Disturbances: Nothing much Compared to other countries </li></ul><ul><li>Local Currency: Kwacha K5,981 - £1 K 5,000-US$1 </li></ul>
  3. 3. <ul><li>Landlocked country with 8 bordering countries [one of 31 landlocked developing countries in the world] </li></ul><ul><li>Strong linkage with large economies through rail and road network </li></ul><ul><li>Total population of 12Mn; access to potential population of over 170Mn </li></ul>Strategic Location High Literacy <ul><li>Knowledge economy </li></ul><ul><li>Literacy levels growing - 81% of total population (Male 87%; Female 75%) - more & more women accessing education; thus, enhancing the total workforce </li></ul><ul><li>Recruitment of over 10,000 teachers and 450,000 pupils in 2007 </li></ul>
  4. 4. <ul><li>Total area of over 750,000 sq km with water 11,900 sq km & rest land </li></ul><ul><li>Zambia accounts for 40% of water reserves in Southern Africa </li></ul><ul><li>85% of arable land uncultivated </li></ul><ul><li>Rich in commodities: </li></ul><ul><li>- C opper (2 nd largest producer in the world & accounts for 6% of total world reserves); </li></ul><ul><li>- Others include Cobalt, Zinc, Lead, Coal, Gold, Silver, Uranium </li></ul>Abundant Natural Resources Youthful Population – Consumer Boom <ul><li>Over 45% of population below 14-years of age </li></ul><ul><li>1:1 ratio of male to female </li></ul><ul><li>Population growth rate at 2 - 2.9% </li></ul><ul><li>Per capita income increased from $360 (2001) to $934 (2007) </li></ul>POPULATION DISTRIBUTION Age Male Female %age of Population 0 - 14 2,659,572 2,634,379 45.40% 15 - 64 3,045,536 3,053,465 52.30% 65+ 115,662 160,920 2.40% Total 5,820,770 5,848,764  
  5. 5. Economy - Basic Economic Facts <ul><li>Major Industries: Copper, other mining activities, wholesale and retail trade, agriculture. manufacturing, service industries, and tourism. </li></ul><ul><li>Major trading partners: South Africa, EU, Japan and China, USA </li></ul>(Figures in $ mn) Source : http:// 6.2 11.6 5.7 6.6 6.7 8.0 8.0 2.0 FDI as %of GDP 6.0 6.2 6.2 5.0 5.4 5.1 3.3 4.9 GDP Growth Rate (%) 16.6 8.9 8.2 15.9 17.5 17.2 26.7 18.8 Inflation Rate (%) 2008 2007 2006 2005 2004 2003 2002 2001
  6. 6. Entry to Zambia <ul><li>A VISA </li></ul><ul><li>A Visa is an endorsement on a visa form or in a valid passport of a foreigner granting such person the authority to enter Zambia within a specified period upon examination by an Immigration Officer at the port of entry. </li></ul><ul><li>The period of stay in Zambia shall be determined by an Immigration Officer at the port of entry. The validity of the visa is not the period which the holder is entitled to remain in the country. There are six categories of visas and these are:- </li></ul><ul><li>The following procedures shall apply:- </li></ul><ul><li>Completion of the visa application form (Form 22) in triplicate </li></ul><ul><ul><li>Two recent certified passport size photographs; </li></ul></ul><ul><ul><li>Return air tickets or Bank guarantee; </li></ul></ul><ul><ul><li>Invitation letter from the host; </li></ul></ul><ul><ul><li>Certified copy of the host’s permit; </li></ul></ul><ul><ul><li>Certified photocopies of passport </li></ul></ul><ul><ul><li>Covering letter to the Chief Immigration Officer by host or company. </li></ul></ul>
  7. 7. Entry to Zambia (Contd..) <ul><li>Types Of Visa </li></ul><ul><li>Visa procedures </li></ul><ul><li>Transit visa </li></ul><ul><li>Single entry visa </li></ul><ul><li>Double entry visa </li></ul><ul><li>Multiple entry visa </li></ul><ul><li>Re-entry visa </li></ul><ul><li>Day tripper visa </li></ul><ul><li>The visa application form (Form 22) in triplicate With the following </li></ul><ul><ul><li>Two recent certified passport size photographs; </li></ul></ul><ul><ul><li>Return air tickets or Bank guarantee; </li></ul></ul><ul><ul><li>Invitation letter from the host; </li></ul></ul><ul><ul><li>Certified copy of the host’s permit; </li></ul></ul><ul><ul><li>Certified photocopies of passport </li></ul></ul><ul><ul><li>Covering letter to the Chief Immigration Officer by host or company. </li></ul></ul>
  8. 8. Working Conditions <ul><li>Basic salaries, Wages, Allowances </li></ul><ul><li>Housing </li></ul><ul><li>Transport </li></ul><ul><li>Children’s Medical & Education </li></ul><ul><li>Water , Electricity, Holiday travel(for senior Staff) </li></ul><ul><li>Indicative Monthly wages: </li></ul><ul><li>Management Workers :US$2,500/- </li></ul><ul><li>Fresh Graduates :US$1,400/- </li></ul><ul><li>Technical Staff :US$1,000/- </li></ul><ul><li>Manual Labor :US$265/- </li></ul><ul><li>Unskilled workers/manual labor does not include food, transport </li></ul><ul><li>allowance, which can be negotiated. </li></ul>
  9. 9. Efficiency of Government Machinery/Bureaucracy <ul><li>Speed of Approvals. </li></ul><ul><li>Business/Company Incorporation: 2 days </li></ul><ul><li>Application & Approval of foreign Currency account:21days </li></ul><ul><li>Tax registration with Zambia revenue Authority: 7 days </li></ul><ul><li>Investment License approval :30 days </li></ul>
  10. 10. Economic Reforms for Accelerated Growth <ul><li>Abolition of Price controls </li></ul><ul><li>Removal of exchange rates &Bank Interest rates </li></ul><ul><li>Abolition of foreign Currency controls in total </li></ul><ul><li>100% repatriation of total profits </li></ul><ul><li>Privatization of state owned enterprises </li></ul><ul><li>Promotion &Facilitation of local &foreign direct investment. </li></ul><ul><li>Promotion of Exports </li></ul><ul><li>Development of capital market through LUSAKA Stock Exchange </li></ul>
  11. 11. Incentives in Taxes <ul><li>Zero Tax on profits made by companies in priority sector for a period of 5 years from the first year of profits made. For 6 to 8 years 50% profits shall be 9&10 years ca 75% of profits earned are taxed. </li></ul><ul><li>Zero % import duty rate on materials, capital goods, machinery including trucks, specialized vehicles for a period of 5 years for priority sector investments. </li></ul>
  12. 12. Priority Sector Investments <ul><li>Floriculture (fresh & dried flowers) </li></ul><ul><li>Horticulture (Fresh & dried vegetables, Fruits) </li></ul><ul><li>Processed Foods& </li></ul><ul><li>Beverages </li></ul><ul><li>Textile sector </li></ul><ul><ul><li>Cotton </li></ul></ul><ul><ul><li>Cotton yarn </li></ul></ul><ul><ul><li>Fabric </li></ul></ul><ul><ul><li>Garments </li></ul></ul>
  13. 13. Priority Sector Investments (Contd..) <ul><li>Manufacturing </li></ul><ul><ul><li>Copper Products </li></ul></ul><ul><ul><li>Iron ore &Steel </li></ul></ul><ul><ul><li>Cobalt </li></ul></ul><ul><ul><li>Other Engg Products </li></ul></ul><ul><li>Agro Processing </li></ul><ul><li>Fertilizers, Cement </li></ul><ul><li>Leather </li></ul><ul><ul><li>Raw Hides Processing </li></ul></ul><ul><ul><li>Crust Leather </li></ul></ul><ul><ul><li>Leather Products </li></ul></ul>
  14. 14. Priority Sector Investments (Contd..) <ul><li>Mini Hydro power plants. </li></ul><ul><li>Education &Skills training. </li></ul><ul><li>Information Technology. </li></ul><ul><li>Communications </li></ul><ul><li>Software </li></ul><ul><li>Pharmaceuticals </li></ul><ul><li>Repair & Maintenance of medical equipment </li></ul><ul><li>Providing Laundry service to medical Institutions </li></ul><ul><li>Ambulance service </li></ul><ul><li>Diagnostic Laboratories </li></ul><ul><li>Setting up of hospitals, super specialty hospitals </li></ul><ul><li>Infrastructure developers for Industrial parks </li></ul>
  15. 15. Salient features for investment <ul><li>Abundance of natural resources & manpower which are highly under utilized. </li></ul><ul><li>Abolition of controls on prices, interest rates, foreign exchange transactions. </li></ul><ul><li>Free repatriation of earnings & repayments. </li></ul><ul><li>Guarantees & Security to investors with statutory rights to full and fair compensation. </li></ul><ul><li>Duty free access to USA,EUROPEAN UNION & African countries under SADC,COMESA bodies. </li></ul><ul><li>Financial, Legal &Insurance services at international standards. </li></ul>
  16. 16. Salient features for investment (Contd..) <ul><li>Good place to work & Live: Subtropical climate with least polluted environment, Peace loving friendly people , English spoken with high level of literacy, open air life style with natural reserves, game parks, rivers, lakes, water falls strong religious values. </li></ul><ul><li>Thriving Private sector </li></ul>
  17. 17. Protection to investments <ul><li>Zambia development agency act assures investors property rights shall be respected. No investment of any description can be expropriated unless parliament has passed an act for compulsory acquisition in such case full compensation at market value & shall convertible into foreign exchange at the existing rates. </li></ul><ul><li>Zambia is signatory to Multilateral Investment Guarantee Agency which guarantees foreign investments against war , strife, disasters or similar disturbances or in expropriation. </li></ul><ul><li>Zambia has double taxation agreements with the following countries : INDIA, Canada, Denmark, Finland, France, Germany, Holland, Ireland ,Italy, Japan ,Kenya, Mauritius, Norway, Romania, South Africa , Sweden, Tanzania, United kingdom , Yugoslavia, Zimbabwe </li></ul>
  18. 18. Infra Structure Facilities <ul><li>Road Network : Govt of Zambia has began process of 38,763 Km road network which link Zambia with South Africa, Mozambique, Malawi ,Democratic Republic of Congo ,Namibia </li></ul><ul><li>Rail Network :Two Major rail lines link to 6 African seaports which are Dar-es-Salaam, Beira, East London, Port Elizabeth, </li></ul><ul><li>Airports: There are four International airports. Lusaka, Livingstone, Ndola, Mfuwe (For Chartered Flights) </li></ul><ul><li>Energy: Electric power is generated through Three Major Hydro power stations. Scope to several mini hydro power stations to implement. </li></ul><ul><li>Communication: Zambia is a member of INTELSAT .and accesses an earth satellite station, which connects with the rest of the world.97% telephone exchanges are automatic </li></ul><ul><li>Water: Good quality treated water is abundantly available. </li></ul><ul><li>Ground water is available at an average depth of 300 feet. </li></ul><ul><li>The quality of ground water is having dissolved solids with in tolerable limits for portability. </li></ul>
  19. 19. Thank You !