I write this article following numerous inquiries from readers on the recent changes in laws applicable to reserved sectors of the economy.
Some of the readers who inquired are foreigners residing in Zimbabwe and some who are based outside Zimbabwe. Many said they were encouraged by the stable macroeconomic environment prevailing in the country and wished to do business here. Key laws on the reserved sectors of the economy
The main laws on reserved sectors include the following:
Indigenisation and Empowerment Act (Chapter 14:33).
Statutory Instrument 215 of 2025 (Foreign Participation in Reserved Sectors)
Regulations, 2025.
Finance Act No. 7 of 2025.
I explain those key laws below.
Indigenisation and Empowerment Act (Chapter 14:33) (“the Act”)
I refer to section 3A (Reserved Sectors of the Economy) of the Act. In terms of section 3A(1) of the Act, subject to subsections (2) and (10), only a business owned by a person who is a citizen of Zimbabwe may operate in the reserved sector of the economy.
According to section 3A(4), any person who is not a Zimbabwean citizen and who, after January 1, 2018, wishes to operate a business in the reserved sector of the economy shall seek the permission of the minister.
The Act has a First Schedule, which is pursuant to section 3A(1) (Reserved / Threshold Sectors). Before the December 2025 changes through Statutory Instrument 215 of 2025 and the Finance Act No. 7 of 2025, the First Schedule listed the reserved sectors from Item 1-11, and these are:
1) Transport: passenger buses, taxes and car hire services.
2) Retail and wholesale trade
3) Barber shops, hairdressing and beauty salons.
4) Employment agencies.
5) Estate agencies.
6) Valet services.
7) Grain milling
8) Bakeries
9) Tobacco grading and packaging.
10) Advertising agencies.
11) Promotion of local arts and crafts, marketing and distribution.
Statutory Instrument 215 of 2025 [Indigenisation and Empowerment (Foreign Participation in Reserved Sectors), Regulations, 2025 (or “the SI”) The SI issued on December 11, 2025, added the following sectors to the Reserved Sectors of the Economy:12) Artisanal mining
13) Haulage and Logistics Industry
14) Borehole drilling.
15) Clearing and customs.
16) Shipping and forwarding.
17) Pharmaceutical retailing.
According to section 3 of the SI 215 of 2025, these regulations apply to all foreign nationals, not being citizens of Zimbabwe, who wish to participate in a reserved sector of the economy.
The SI defines “participate in a reserved sector of the economy” to mean:
To go into partnership with or invest in a majority or minority stake in or take over a reserved sector business.
To form or start a new business operating exclusively or predominantly in the reserved sector.
According to section 4(1), a foreign national may qualify to participate in a reserved sector of the economy if the applicant:
Is an individual or legal entity registered or incorporated in Zimbabwe, of which a majority or minority of the stake or shares are owned by a foreigner and -Meets the thresholds stated in the Schedule (being First Schedule to the Act).-Is registered for tax purposes with ZIMRA.
Maintains a bank account.
Presents a sound business plan detailing how the applicant will achieve the objectives in 3A(10) (a) to (d), being significant creation and maintenance of employment, transfer of skills and technology for the benefit of the people of Zimbabwe, creation of a sustainable value chain, and other prescribed socially and economically desirable objectives.
According to Section 4(2) of SI 215 of 2025, a foreign national who wishes to participate in a reserved sector of the economy shall apply to the minister through the National
Economic Empowerment Unit for a permit.
In terms of section 6 (Regularisation Period) of the SI 215 of 2025:
Foreign businesses that have been operating in the reserved sector before the gazetting of these regulations (11 December 2025) shall be granted 30 (thirty) days to submit their
regularisation plan.
Foreign nationals operating in the reserved sector shall, within a period of 3 years, divest a minimum of 75 percent of their equity to Zimbabwean citizens at the rate of 25 percent, such that after 3 years, they will not hold more than 25 percent.
Businesses that fail to regularise their operations in terms of subsections (1) and (2) shall be subject to suspension or revocation of their business licences.
Finance Act No. 7 of 2025 of 29 th December 2025
Section 67 (Amendment of First Schedule of Cap 14:33) of the Finance Act No. 7 amends the
First Schedule to the Act by inserting/adding the following sectors to the Reserved Sectors of the Economy:
18) Quarry mining.
19) Brick moulding.
20) Granite mining.
21) Travel agencies.
Conclusion
Foreigners already operating in the above sectors need to regularise their positions within the time allowed at law or seek the necessary ministerial approvals, where necessary or possible. Prospective foreign investors ought to be aware of the legal requirements when considering investing in reserved sectors.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons BCompt (UNISA), CA(Z), ACCA (Business Valuations). MBA (EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, a chartered accountant, insolvency practitioner, commercial arbitrator, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He was recently appointed to sit on the Council of Estate Administrators in Zimbabwe. He writes in his personal capacity. He can be contacted on +263 772 246 900 orghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.-herald
