THE Government has gazetted new regulations reserving several sectors of the economy for indigenous Zimbabweans, reinforcing its policy on indigenisation and economic empowerment.
This is contained in Statutory Instrument (SI) 215 of 2025, titled Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025, published in the Government Gazette Extraordinary on December 11, 2025.
The regulations apply to all foreign nationals seeking to operate in reserved sectors, setting strict conditions for participation or exit. The SI defines participation broadly, stating: “In order to participate in a reserved sector of the economy, including to go into partnership with or invest a majority or minority stake in or take over a reserved sector business, or to form or start a new business operating exclusively or predominantly in the reserved sector.”
Zimbabwe’s policy aims to correct historical economic imbalances, empower locals and foster national economic participation. Similar frameworks exist in countries such as Malaysia, South Africa, Nigeria, Brazil, India, China, Russia and Saudi Arabia, ranging from mandatory ownership transfer to preferential procurement. For example, Malaysia’s New Economic Policy (NEP) introduced affirmative action programmes to increase Bumiputra participation, while South Africa’s Black Economic Empowerment (BEE) encourages black ownership and control.
Reserved areas in Zimbabwe include barber shops and beauty salons, bakeries, employment agencies, advertising agencies, artisanal mining, valet services, borehole drilling, pharmaceutical retailing, small-scale grain milling, and marketing and distribution of local arts and crafts. Passenger transport, real estate agencies and customs clearing services are also restricted, except for recognised international brands.
Where foreign participation is allowed, entry thresholds are deliberately high. For instance, retail and wholesale investors must commit US$20 million and employ at least 200 full-time workers; grain milling requires US$25 million and 50 employees; haulage and logistics demand US$10 million and 100 employees.
Economist Tinevimbo Shava said: “This is a clear attempt by the Government to preserve space for local entrepreneurs, especially in sectors that naturally support small and medium enterprises. The emphasis on thresholds shows that foreign capital is being directed towards large-scale, capital-intensive activity rather than everyday commerce.”
The SI also introduces strict rules on beneficial ownership to curb the use of fronts. Authorities may demand sworn declarations, and any person who fails or makes a false declaration faces a fine not exceeding level eight or imprisonment of three to five years.
Foreign-owned businesses already operating in reserved sectors have 30 days to submit regularisation plans and must divest 75 percent of their equity to Zimbabwean citizens within three years, in annual tranches of no less than 25 percent.
The SI specifies: “Foreign nationals operating in the reserved sector shall, within a period of three years, divest a minimum of seventy-five per centum (75 percent) of their equity to Zimbabwean citizens. The divestment shall occur in annual tranches of no less than twenty-five per centum (25 percent) per annum,” leaving foreign investors with no more than 25 percent ownership at the end of three years.
“The objective of empowering locals is sound, but execution must be careful. If the transition is not managed properly, there is a risk of disrupting supply chains or forcing abrupt exits that hurt employment. Reserving sectors alone is not enough. Local players must have access to finance, skills and markets to ensure these businesses grow and remain competitive,” Industrialist Dr Nxaba Ndiweni said.
The regulations grant significant authority to the Minister of Industry and Commerce, who may approve, reject or revoke participation permits. The SI states that the Minister “may approve and subsequently issue a permit or an exemption certificate or reject an application” and may revoke permits where investors fail to meet empowerment obligations.
Penalties for non-compliance are severe. Operating in a reserved sector without a permit is classified as a criminal offence, with the SI warning that offenders are liable to fines or imprisonment, and repeat offenders may be barred from doing business with Government entities for five years.-herald
