Financial Data
Updated 23 Mar 2017


Zambia

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Business opportunities and risks

Opportunities for you to do business in Zambia

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Zambia is economically open, with low levels of governmental red tape. This significantly enhances the attractiveness of its business environment. Companies operating in Zambia will encounter a favourable tax regime, with various incentives and international agreements lowering the cost of doing business. Setting up a business is a straightforward process, and the cost of construction permits is low.

Zambia also offers one of the most competitive crime and security environments in sub-Saharan Africa. Businesses and foreign workers in Zambia benefit from a safer environment than in most other sub-Saharan Africa countries, with lower crime rates, a negligible threat from domestic or international terrorism and a secure strategic environment.

Business opportunities
  • Companies operating in Zambia will encounter a favourable tax regime, with various incentives and international agreements lowering the cost of doing business.
  • Zambia offers one of the most competitive crime and security environments in sub-Saharan Africa.

 

Operational risks to consider

Africa’s growth and development has attracted foreign investment to the continent. Yet, there are certain risks associated with doing business or operating in African countries.

The following are some of the potential challenges you may face when operating in Zambia:

  • The new mineral royalty tax regime could result in the closure of less profitable mines. This will lead to the loss of thousands of jobs and of additional foreign investment.
  • Businesses face the highest degree of operational risk from Zambia’s logistics capabilities. Zambia is a landlocked country with high trading costs.
  • Other concerns include the rising road congestion, high energy costs and the limited availability of utilities. The underdeveloped transport infrastructure makes trade costly and time consuming.
  • The limited availability of skilled and educated labour, high poverty rates and stringent labour laws also pose challenges to businesses.
  • The absence of a reliable source of power constrains the growth of power-intensive industries such as manufacturing.
  • Low levels of Internet penetration limit Zambia’s attractiveness to investors, as internet access is critical to international business. The e-commerce market is relatively new, so companies would need to rely on alternative channels for marketing and financial transactions.
  • The shortage of water infrastructure is a risk to businesses operating in Zambia. The underinvestment in this resource means that water supply and sanitation services are inadequate to meet domestic demand, especially in rural areas.
Business challenges
  • Zambia is a landlocked country with high trading costs, because it does not have a coastal access.
  • The underdeveloped transport infrastructure makes trade costly and time consuming.
  • Low levels of Internet penetration damage Zambia’s attractiveness to investors, as Internet access is critical to international business.
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