Foreign business owners operating across Zimbabwe have been given a firm three-year deadline to surrender control of their enterprises, following the government’s sweeping new indigenisation regulations that significantly reshape who may participate in key sectors of the economy.
The measures are contained in the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025, which came into effect on 12 December 2025. Gazetted as Statutory Instrument 215 of 2025, the regulations introduce a mandatory divestment framework that requires foreign-owned businesses in newly reserved sectors to sell a controlling 75 percent stake to Zimbabwean citizens.
The announcement has triggered widespread concern and uncertainty within the small and medium enterprise (SME) sector, where foreign nationals have for years played a visible role in service delivery, retail, transport, and light manufacturing. Under the new law, those businesses must either restructure their ownership to comply with the local shareholding requirement or shut down operations entirely by December 2028.
According to the government notice, the policy is designed to “promote meaningful economic empowerment of indigenous Zimbabweans” by reserving specific sectors of the economy exclusively for citizens. Authorities argue that the move will enhance local participation, wealth creation, and job security in industries that directly affect everyday livelihoods.
The list of businesses now ring-fenced for Zimbabweans is extensive and covers many common, community-level enterprises. These include barber shops, hairdressing and beauty salons, bakeries, and grain milling operations below a defined major-investment threshold. Employment agencies, estate agencies, and advertising firms have also been placed on the reserved list.
In addition, foreign participation is no longer permitted in the marketing and distribution of locally produced arts and crafts, artisanal mining activities, borehole drilling, passenger transport services such as buses, taxis, and car hire firms. Valet services and pharmaceutical retailing have also been designated as citizen-only sectors under the new regulations.
Foreign business owners granted three-year window to offload shares in Zimbabwe
For foreign nationals currently operating in these fields, the choice is now clear but difficult. They must identify local partners willing and able to acquire a majority stake in their businesses, or prepare to exit the market once the three-year grace period expires. The regulations do not provide for exemptions once the deadline has passed, raising fears of business closures and job losses if transitions are not managed smoothly.
Despite the clampdown on smaller-scale enterprises, the government has left a narrow window open for foreign investors with substantial financial capacity. In certain sectors, participation is still permitted, but only under strict and costly conditions.
Foreign entities seeking to operate in the retail and wholesale trade sector must now invest a minimum of US$20 million and employ at least 200 Zimbabwean nationals. Entry into the haulage and logistics industry similarly requires a minimum capital injection of US$10 million and the creation of at least 100 local jobs.
Officials say these thresholds are intended to ensure that foreign investors bring significant value, capital, and employment opportunities, rather than competing directly with small local businesses. However, critics argue that the requirements are prohibitively high and effectively shut out all but the largest multinational corporations.
The regulations clarify that major sectors such as large-scale mining, manufacturing, and banking remain open to foreign ownership under the broader Indigenisation and Economic Empowerment Act. In these areas, foreign investors may retain controlling stakes, subject to existing laws and sector-specific regulations.
Government spokespersons have defended the policy as a necessary corrective measure, saying Zimbabwe must prioritise citizen ownership in sectors that form the backbone of the domestic economy. They contend that similar policies exist in other countries and that local empowerment is essential for sustainable economic growth.
However, business associations and economic analysts have warned that the sudden policy shift could undermine investor confidence and disrupt service delivery, particularly in urban areas where foreign-owned SMEs are prominent. Some have called for clearer guidelines, transparent valuation processes, and support mechanisms to facilitate fair partnerships between foreign owners and local investors.
As the three-year transition period begins, attention will turn to how the policy is implemented on the ground. The success or failure of the regulations may ultimately depend on whether they can balance the goal of citizen empowerment with economic stability, job preservation, and continued investment.
With December 2028 now firmly marked as the deadline, foreign-owned businesses face a race against time to comply, adapt, or depart, while Zimbabwe embarks on one of its most ambitious indigenisation drives in recent years.
