Zambia provides a reasonably stable and investor-friendly climate for anyone wishing to launch a commercial real estate venture. A burgeoning middle class, rising urbanization, and a need for office, retail, and industrial space make Zambia a great place for developers and real estate entrepreneurs. This is a comprehensive guide to getting started.
Why choose Zambia
The commercial estate scene has had a lot of growth in under-discussed cities such as Livingstone, Ndola, Kitwe, and Lusaka. Retail malls, offices, industrial parks, and logistics hubs have been in huge demand within the diversification programs and the foreign direct investment. The government supports private participation in property and infrastructure concerns, with fairly liberal laws for both domestic and foreign companies. Additional advantages that the country enjoys are a youthful population, political stability, and participation in regional economic sectors such as SADC and COMESA.
Commercial property opportunity types
Several sub-sectors make up Zambia’s commercial property market:
- Shopping malls and retail establishments
- Complexes of offices
- Warehouse and industrial facilities
- Advances in hotels and hospitality
- Developments with mixed uses
- Distribution and logistics hubs
While the need for more retail and office space is being driven by urban growth, the expanding e-commerce and industrial industries are also pushing up demand for storage and distribution centers.
Registering your company
In order to do business lawfully in Zambia, you must first register your company. Companies may be entirely owned by foreigners; the Patents and Companies Registration Agency (PACRA) oversees this procedure. The steps are as follows:
- Select a company name and use PACRA to verify its availability.
- Select a business structure, such as a limited corporation.
- Create and preserve the articles of association and other legal papers.
- Either register your company online or in person at a PACRA location.
- Obtain Taxpayer Identification Number (TPIN) from the Zambia Revenue Authority (ZRA).
- Register for Value Added Tax (VAT) if your annual earnings exceed ZMW 800,000.
- Apply for all required business licenses and permits (if required).
A business investment license from the Zambia Development Authority (ZDA) may also be required should you wish to take advantage of investment benefits in Zambia.
Purchasing real estate and land
Land in Zambia may be classified as either customary or state land. Technically, the President owns all land, and leases are only available for a maximum of 99 years. While they cannot directly own property, foreigners may get leasehold rights.
The steps involved in purchasing land for commercial use:
- Find land or property by contacting landowners, local government representatives, or property brokers.
- Take the necessary steps to confirm ownership and use rights.
- Get approval from the Ministry of Lands, then register the property under your company name.
- Obtain permission from the traditional chief and work with the Ministry of Lands to convert customary land to leasehold.
- Make the necessary payments for stamp duty, title registration, and ground rent.
Working with a local real estate attorney is advised to make sure all legal criteria are fulfilled.
Building and development
If you’re building real estate, you have to:
- Get local council approval for the project.
- Send in construction blueprints for approval.
- Follow environmental laws (an environmental impact assessment may be required).
- Employ certified experts, such as engineers, architects, and contractors.
- Secure the infrastructure connections and utilities that are required.
Developers are required to abide by the rules set out by the National Council for Construction (NCC), which oversees the construction sector.
Getting your real estate project financed
Your business endeavor in commercial real estate may be financed by:
- Private funding or collaborations
- Bank loans (provided by banks and microfinance organizations in Zambia)
- Development financing organizations or foreign investors (such as the IFC or AfDB)
- Syndicates or groups dedicated to real estate investing
Securing money is more likely if you have a thorough business strategy, feasibility study, and financial predictions.
Marketing and leasing your property
The next stage after developing or purchasing your property is marketing. One way to do this is by:
- Neighborhood real estate firms
- Websites for real estate (such as Property Zambia and Go Zambia Jobs)
- Social media promotion
- Advertising on billboards and in print
- Organizing launch or open house events
Provide dependable property management, affordable prices, and flexible lease terms to draw in and keep renters.
Tax and legal responsibilities
Your company has to continue adhering to Zambian tax laws:
- Make yearly returns to PACRA.
- Send monthly income tax and VAT returns to ZRA.
- Pay the Property Transfer Tax (PTT), which is 5% of the sale price, when you sell your property.
- If appropriate, pay the rental income’s withholding tax.
- Preserve accurate documentation for leasing agreements and renters.
To stay out of trouble with the law, you must also make sure that safety standards and local laws are followed.
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