I. Introduction
The Indigenisation and Economic Empowerment Act [Chapter 14:33] (hereinafter referred to as the Indigenisation Act) provides for the reservation of certain sectors of the economy in Zimbabwe for its citizens. The framework of reservation is, however, complemented by a regulatory mechanism that allows for controlled foreign participation in some reserved sectors subject to defined conditions and safeguards. These conditions are set out in Statutory Instrument 215 of 2025 being the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025, gazetted on 11 December 2025, (hereinafter referred to as S.I 215 of 2025). S.I 215 of 2025 sets out the qualifying criteria for participation by foreign nationals (i.e persons who are not citizens of Zimbabwe) in certain reserved sectors and introduces a mandatory regularisation framework.
II. Sectors Designated as Reserved
The following sectors are designated as reserved in Schedule 1 of the Indigenisation Act as amended by the Finance Act No 2 of 2024 and Finance Act 7 of 2025;
- Transportation including passenger buses, taxis and car hire services,
- Retail and Wholesale Trade,
- Barber Shops, Hairdressing and Beauty Salons,
- Employment Agencies,
- Estate Agencies
- Valet Services
- Grain Milling
- Bakeries
- Tobacco Grading and Packaging
- Advertising Agencies
- Provision of Local Arts and Crafts Including marketing and distribution
- Artisanal Mining
- Haulage and Logistics Industry, encompasses all activities, services, and operations related to the movement of goods, cargo, fuel, mineral ores and other consumables within the country’s inland territory using rigid trucks (up to 15tonnes), horse drawn trailers, including tipper trucks, dump trucks, fuel tankers other road vehicles across Zimbabwe’s road networks.
- Borehole Drilling, covers The borehole drilling industry in Zimbabwe involves the exploration, drilling, and installation of water boreholes to provide sustainable water sources for domestic, agricultural, and industrial use.
- Clearing and Customs, involving all activities related to the facilitation of goods through customs borders, ensuring compliance with regulatory requirements and efficient processing of imports and exports.
- Shipping and Forwarding, including, Freight forwarding, warehousing and storage, customs clearance, transportation services and logistics consulting
- Pharmaceutical Retailing, involves the sale and distribution of medications and health-related products to consumers through retail pharmacies and other outlets including; community pharmacies, hospital pharmacies, online pharmacies, pharmaceutical wholesalers and consultation and advisory services
- Quarry Mining
- Brick Moulding
- Granite Mining
- Travel Agency Business
The Schedule to S.I 215 of 2025 distinguishes between reserved sectors that are fully reserved, sectors in which foreign participation is permitted on a conditional basis, and sectors in which participation by qualifying international brands is permitted. The regulatory framework therefore adopts a differentiated approach to foreign participation, rather than imposing a blanket prohibition across all designated sectors.
Fully Reserved Sectors
The sectors reserved exclusively for Zimbabwean citizens are set out in the Schedule to SI 215 of 2025 and these include Barber shops, hairdressing salons and beauty parlours; Valet Services, Estate Agencies, Employment agencies; Bakeries; Tobacco grading and packaging; Advertising agencies; Provision of local arts and craft, marketing and distribution; Artisanal mining; Borehole drilling services; and Pharmaceutical retailing.
Sectors allowing conditional foreign participation
Section 4 of S.I. 215 of 2025 provides that foreign participation may be permitted for certain reserved sectors (e.g Haulage and Logistics Industry, Shipping and Forwarding, Grain Milling, Retail and Wholesale) where an investor demonstrates compliance with prescribed economic contribution requirements which include:
- Compliance with minimum capital investment thresholds and the creation of a prescribed number of full-time local jobs
- Submission of a business plan demonstrating objectives such as significant employment creation, skills transfer, technology transfer, and sustainable value-chain development
- Full corporate registration, tax compliance and maintenance of a local bank account.
Foreign participants are required to apply for a permit to the Minister of Industry and Commerce & Enterprise Development through the National Indigenisation and Economic Empowerment Unit who assigned administration of the matter or, where applicable, an exemption under the Regulations showing compliance with the above in order to continue operating in a reserved sector.
III. Requirement to regularise existing operations
Section 6 of S.I. 215 of 20205 requires foreign nationals and foreign-owned entities that were operating in reserved sectors prior to the commencement of the Regulations to regularise their operations in line with the Statutory Instrument. The Ministry of Industry and Commerce have advised that affected entities must submit their regularisation plans by 31 January 2026 to the Economic Empowerment Unit or the Ministry’s provincial offices with the objective of showing how such entities plan to comply with the Foreign Participation Regulations.
In relation to regularisation the Statutory Instrument also provides for divestment of up to 25% of shareholding over a three-year period, in annual tranches with from the effective date.
IV. Consequences of Failure to Comply
Failure to regularise exposes an entity to enforcement action, including the cancellation of operating licences, the imposition of fines, or other regulatory sanctions. Affected Foreign Owned entities should therefore treat the regularisation process as a high-priority compliance matter.
V. Practical steps for Foreign Entities in Reserved Sectors under S.1 215 of 2015
Foreign Owned Entities operating in Reserved Sectors or considering entry into, affected sectors should take the following steps:
- Assess activities:
Determine whether current or proposed activities fall within a reserved sector. - Review ownership and capital structure:
Assess and confirm compliance with ownership and prescribed investment thresholds and devise a regularisation plan where gaps exist. - Prepare a compliant business plan:
Where required document a business plan with clear objectives linked to employment creation, skills transfer, technology transfer, and sustainable value creation. - Submit Regularisation Plan promptly:
Submit the required regularisation plan by 31 January 2026. - Apply for the requisite authorisation:
File an application for an exemption or permit depending on the entity’s status in order to continue operating in the reserved sector. - Seek specialist counsel and tailor documents to your needs:
Engage legal advice to draft and review the requisite documentation tailored to your company’s needs and assist in the application process. - Implement and monitor compliance:
If authorised, implement the commitments in your plans monitor progress, and keep contemporaneous records to demonstrate ongoing compliance.
By Tendai Rwodzi
Associate – Corporate and Commercial Department