Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Zimbabwe. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Register the company name with the Chief Registrar of Companies | 7 days | USD 5 |
| 2 | File memorandum and articles of association with the Registrar of Companies | 14 days | Registration Fee is US$5.00 for every US$100.00 or part thereof of the nominal/ authorised capital of the company with a minimum fee of US$100.00 |
| 3 | Register with the tax authorities for income tax, VAT, and PAYE | 14 days | no charge |
| * 4 | Register with the National Social Security Authority for pension and Accident Prevention and Compensation Scheme | 14 days (simultaneous with procedure 3) | no charge |
| * 5 | Register with the Manpower Development Fund | 1 day (simultaneous with procedure 3) | no charge |
| * 6 | Pick up the form of license application notice from the City Health Department | 1 day, simultaneous with procedure 3 | USD 20 |
| * 7 | Advertise on a local newspaper the application for a trade and business license | 4-6 weeks, simultaneous with procedure 3 | USD 30 |
| 8 | Submit an application form for issuance of new licenses to the Licensing Office in Harare Municipality | 30 days | UDS 530 |
| * 9 | Licensing officers visit the company site | 1 day, simultaneous with previous procedure | no charge |