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Vengai Madzima (LLB, LLM (Business Law) ) is the senior partner of MCM Legal responsible for the Property Law and Estates. He has extensive experience in real estate having practiced as a registered agent and taught property law at a local college.
Property.co.zw: Hello Mr. Madzima, what should a foreign investor consider when planning on investing in property in Zimbabwe.
Vengai: Our laws do not restrict foreign investors from purchasing residential, commercial or industrial property in Zimbabwe. Rural or agricultural land purchases or investments require consent from the government to be secure.
The objective of any investment is the ability to liquidate the investment at a later stage and for the foreign investor, it is the ability to liquidate and remit the proceeds to the country of choice.
Our laws allow and in fact encourage foreign investment and reinvestment to be treated on the same conditions as if it was a local investment. However, a foreign investor has the subsequent need to export profits and capital on disinvestment. It becomes vital that on initial investment, such investments are registered with Zimbabwe Investment Development Agency.
The Agency is a one stop shop comprising having a desk for every regulatory authority the investor will need approval from when bringing their investment into the country, for example, the Reserve Bank and Ministry of Finance.
The Reserve Bank is critical because it approves remittances of either rentals or profits and capital on disinvestment. A clear record of initial inward capital into the country allows for quicker approvals for outward remittances,
Property.co.zw: How can a foreign investor ensure that he/she purchases a property safely in Zimbabwe?
Vengai: Having completed the registration process for investment with the relevant authorities. A foreign investor has to ensure that he deals with reputable professionals in identifying and consummating the transactions.
In the property identification stage, reputable websites like property.co.zw will be a good start as it has listings of the majority of investment properties in Zimbabwe from reputable estate agents.
Having identified the property under an agent. The next step will be to confirm the estate agency is registered with the Estate Agents Council of Zimbabwe. The Council keeps a list of all registered agents and agencies. This is important in that, should your transaction for whatever reason turn out to be illegitimate, the Estate Agents Council maintains a compensation fund that will compensate the affected buyer in an illegitimate transaction consummated by a registered agent.
As all purchases end at a lawyer’s desk for finalization and registration, it is important that a foreign investor has his own local lawyer who is also a conveyancer representing their interests in the transaction. Our legal default position is that the Seller nominates the conveyancer whose mandate it is to transfer the property in the buyer’s name. It would serve the foreign investor well if he/she is also represented by a local conveyancer who understands the costs processes.
Property.co.zw: What costs are expected outside of the selling price?.
Vengai: It ultimately depends on whether the purchaser is buying the property from an individual, out of a company or buying the shares in the company that holds the property.
I will discuss the attended costs following a purchase from an individual .
The estate agent's commission is normally paid by the Seller, while the legal costs of transfer which include lawyer fees and stamp duty are paid by the purchaser. Capital gains tax where applicable is paid by the Seller.
You can contact Vengai Madzima on vengai@mcmlegal.co.zw or visit MCM Legal’s website : www.mcmlegal.co.zw
