Government has with immediate effect abolished the Minimum capital requirement to start a company as part of the on-going business legislative reform aimed at making business easy.
This means that People wishing to start businesses will not be subjected to disclose their capital to PACRO.
Commerce Trade and Industry Minister Felix Mutati announced the change at a press briefing in Lusaka this morning.
Mr Mutati said the move is part of business licensing reform approved by government last year in July whose objective was to reduce the burden faced by the community when establishing their businesses.
He disclosed that 23 licenses out of the 517 have so far been eliminated while 40 bills will be approved by Parliament at the next sitting.
Last year Cabinet approved the business Licensing Reform report that directed that 170 licenses be eliminated and 57 redefined.
The report also provided that 99 licenses be amalgamated into 21 licenses with the rest being returned after being streamlined.
[QFM ]
What a magnificent move to boost business !! Well done Mutati!! How about the minimum amount required for VAT registaration? $40,000 is somehow high for an average SME entrepreneur.
How this can turn out to be a magnificent move is beyond any business sense
Capital Requirement
Total financing needs (Long-term capital + Working capital) of a firm arising from its current and future plans.working capital, is the funding that will help you pay for equipment, rent, supplies, etc., for the first year or so of operation.Even if you walk into a Bank to borrow,they will look at what you have for starters and then they will decide based on what you are willing to put in and how much risk is involved
The way its been put, as though this capital was paid to an organization in order for someone to start a business DOH!!!!!!!
Way to encourage smoke screen businesses and money laundering govt. *clap clap*
Briefcase companies will spring up
This is perfect, we are going somewhere for sure; Mangelepa Ltd from onwards. I am happy about move wth u Gvt.:d
The Great Kaponya is coming to start a company. Look out for him. You will want to be associated with him. :)>-:)>-
How can one start business without capital…coz even kugulisa nshaba one need some capital…:o:o:o:o:o
This is a bold move by Govt. For registration puropses, the move is long overdue. Adherence to archaic and draconian laws requiring minimum capital is a drag on small scale private sector invovlement in economic development. This, however, does not eliminate the challenges faced by Zambians in starting viable businesses. For operational purposes, capital is still required. Two questions that remain to be answered: What incentives has the Govt put in place to ensure Zambians have access to loans from banks and other financial institutions. What steps are being taken to stop the politicisation of the Citizenship Economic Empowerment Commisssion so that vaible businesses can access funding regardless of their political affiliation.
MUTATI one of the few cabinet Minister Brain tunker. Ulinshimbi mwana wesu
Are we sure that we understand the topic, guys? My understanding is that before this move by GRZ, to obtain a permit to start a business, you needed to show your starting capital, not that GRZ would supplement your needs. Under the new regulations you do not need to show your capital, but you can start your business, no questions asked. Whether you actually start the business or not that is your indaba. Now if I am right, when Red Card wants to borrow money from the bank to start a business, the manager will ask for collateral or ask him to show how much he has raised himself towards his capital requirements. There is risk involved here but not in the other case. Now is this a misunderstanding or a deliberate distortion of facts? There are bloggers on LT whose mission is to distort facts.
Are we sure that we understand the statement, guys? My understanding is that before this move by GRZ, to obtain a permit to start a business, you needed to show your starting capital and not because GRZ would top up. Under the new regulations you do not need to show your capital, but you can start your business, no questions asked. Whether you actually start the business or not that is your indaba. When Red Card wants to borrow money from the bank to start a business, the manager will ask for collateral or ask him to show how much he has raised himself towards his capital requirements. There is risk involved here but not in the other case. Now is this a misunderstanding or a deliberate distortion of facts? Some bloggers’ mission on LT is to distort facts. Sorry we are not that ignorant.
@ 11, 8: make good points and observations.The law was an obstacle and a source of corruption when trying to start a business or company.This will make it easier to start a company and reduce stages and days of processing a license. Like # 11, how your get your capital is no ones business and it is not the governments duty to dish out money for starting a company. However, it is Governments dety to formulate laws that will make it easy to start business and protect businesses from abuse, especially in this global economy. Already most people have been complaining on how the government has made it easy for foreign investors while making it hard for Zambians and Zambians in diaspora.So any little effort to make things easy for Zambians business entrepreneurs should be welcomed. Quit whining
Katie Good – The article is clear as it is. Anyone can now REGISTER a business without declaring the minimum capital at PACRO. Before this, the minimum authorised capital for a private Ltd coy was K5m for whic you paid K245,000.00 to register. If you want to increase your capital, the Registration fee for Notice of Alteration in Capital is 2.5.% of every K200 or part thereof of the increased capital plus K60,000. What most of us have done is to register a company for the very minimum (K5m) and do not bother to increase alter the minimum capital. This can turn out to be a disadvantage to Zambian owned businesses. The ‘new law’ is similar to what the State of Georgia – USA has where you register a business just by submitting the Articles of Incoporartion without stating the capital.
Katie Good – By ‘What incentives has the Govt put in place to ensure Zambians have access to loans from banks and other financial institutions. What steps are being taken to stop the politicisation of the Citizenship Economic Empowerment Commisssion so that vaible businesses can access funding regardless of their political affiliation’ I did not mean Govt should give money to Zambians but that it should create an atmosphere in which banks can open up their lending to Zambian. These policy changes can range from special interest rates for small scale business development to Govt guaranteed business loans. Zambians, however, must change their attitude towards credit – when you borrow, you ought to pay back!
This is good move. I guess it is in line with the Doing Business Index of the World Bank. Rwanda has made a name by doing the same. I wish I could vote for Mutati as president instead of RB or the other politicians. The day will come some day…
This will surely add to the ease of doing business in Zambia. This will also lead to more companies registering and adding tax into govt coffers. Welcome move indeed.
How does this ease doing business mwe banthu,,,you dont have capital to start a busines, you cant even walk into a bank and present your proposal unless you have some form of equity somewhere..
awe sure
#17 Red Card-Smoothcriminal, please refer to my comment at #11. The point is that there was a minimum amount required before you could register a business. Now there is no minimum, doesn’t that make it easier to start a business? That is what is called an enabling environment, development does not only mean loans,subsidies, grants and freebies from GRZ. Please separate bank issues from this matter, in fact people do start small businesses without any help from the banks. Be positive, recognise opportunities, and do something for yourself. As you can see from some bloggers, those with the above attributes have already welcomed the move while your mind is fixed on flashing red cards.
Well said Katie Good @ 18. However, you are missing the point whenyou take out banks from the equation. No one is advocating for freebies. Being in the USA, take time and attend and familiarize yourself with The Small Business Administration and its services. The task of the SBA is to bring borrowers and lenders together (Kind of what ZED wants to do with CEEC). Making the business registration simple is one thing, we understand that. The policy changes I alluded to at 14 can ensure that those small businesses that do start do not fail.
Nakabalika and sons (Zm) Ltd
“This means that People wishing to start businesses will not be subjected to disclose their capital to PACRO.”
this is just for form filling when registering a company at registrar of companies. it does not mean you don’t need capital. this is just a way of improving zambia’s ease of doing business ranking as reported annualy by the world bank. in actual fact – it doesn’t make doing business any easier.
#18
You are missing the point,the issue is about Capital,not registering a company…anyone can go to the registrar of companies and get a business name or whatever,they wont ask you about Capital