ZIMBABWE

(e) INCENTIVES

(ii) Export Processing Zones

The main objective of the Export Processing Zone (EPZ) programme is to encourage new export-oriented investments in Zimbabwe as well as to enhance employment creation and technological transfers.

Types of Export Processing Zones

Industrial Parks

Defined geographical areas where export oriented manufacturing activities are carried on.

The parks provide the following infrastructure to support the establishment of industrial projects:

• Factory space
• Communications o Water/sewage networks
• Industrial power

Tax concessions accorded to BOT investors were extended to private developers of EPZ industrial parks with effect from January 1999.

Each industrial park has a single customs entry and exit point to allow for easy customs and excise controls and administration.

Stand Alone EPZ's

These are individual companies accorded single factory EPZ status irrespective of their location. This usually applies to resource-based projects.

Applications for approval to invest in an EPZ should be made to the Export Processing Zones Authority in the prescribed form and accompanied by the pre-scribed fee.

Qualifying Criteria for Export Processing Zones

In considering an application for a licence the Authority will take into consideration companies:

• Undertaking a new project;
• Expanding existing activities - provided the proposed activity is constituted as a wholly separate entity legally and physically;
• Undertaking a manufacturing, assembly, processing or service activity; · Exporting a minimum of 80% of total production;
• Generating acceptable levels of value addition;
• Injecting new capital investment;
• Hiring additional employees;
• Transferring technology into Zimbabwe;
• Sensitive to the impact the development will have on the environment and the measures proposed to deal with any adverse effects.

Export Processing Zone Incentive Package

Five year tax holiday after which tax on profits will be levied at a flat rate of 15%;

• Exemption from customs duty in respect of capital goods, intermediate goods and raw materials;
• Exemption from withholding tax on dividends, all management fees, licence fees and interest earned;
• Exemption from capital gains tax;
• Refund of sales tax paid;
• Exemption from the fringe benefits tax for employees of EPZ companies.

Protection for Investors in an Export Processing Zone

In terms of the Export Processing Zones Act no property or interest of a licensed investor to whom an EPZ investment license has been issued shall be compulsorily acquired.

Foreign Currency Accounts for investors in Export Processing Zones

A licensed investor carrying on an approved EPZ project is entitled to operate a foreign currency account with a commercial bank within Zimbabwe. This is subject to approval required in terms of the Exchange Control Act.