This analysis focuses on the impact and implications of S.I. 215 of 2025: The Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025.The Statutory Instrument (S.I.) represents a significant re-alignment of Zimbabwe’s Indigenisation policy, moving away from a broad, general ownership mandate towards a highly targeted and strictly enforced sectoral reservation policy.
🛑 Analysis of S.I. 215 of 2025: New Indigenisation Rules
1. The Policy Shift: Targeted Economic Exclusion
The new regulations operate on two clear principles: outright exclusion for small-scale and service-based sectors, and high barriers to entry for capital-intensive sectors.
A. Expansion of Exclusively Reserved Sectors (12 Sub-Sectors)
The S.I. explicitly reserves numerous sub-sectors exclusively for Zimbabwean citizens. Foreign nationals are prohibited from participating in these areas, demonstrating a firm government stance on protecting local entrepreneurs in the service and retail value chains.
The sectors marked as exclusively for Zimbabweans include:
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Service & Retail:
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Barber shops,
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hair dressing and
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beauty salons;
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Valet services;
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Bakeries;
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Advertising
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Agencies;
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Provision of local arts and craft (Marketing and distribution);
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Employment Agencies;
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Pharmaceutical Retailing.
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Logistics & Extractives:
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Transportation (passenger buses, taxis and car hire services);
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Borehole drilling;
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Artisanal mining;
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Clearing and customs (except international brands).
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Agriculture-Related: Tobacco grading and packaging.
The inclusion of sectors like Borehole Drilling and Artisanal Mining is a direct move to regularize and empower local players in these resource-adjacent activities, where informal foreign participation has been historically challenging to monitor.
B. High-Threshold Foreign Participation
Foreign nationals are only permitted to participate in the remaining reserved sectors if they meet extremely high minimum investment and employment thresholds. This is a mechanism to ensure that any foreign presence in these key sectors is genuinely large-scale and strategically beneficial.
| Reserved Sector | Minimum Full-Time Paid Employees | Minimum Investment (US$) | Implication |
| Retail and Wholesale Trade | 200 | $20,000,000 | Excludes nearly all foreign-owned small and medium-sized trading businesses. |
| Grain Milling | 50 | $25,000,000 | Restricts foreign participation to large industrial milling complexes only. |
| Haulage and Logistics Industry | 100 | $10,000,000 | Limits competition against local small and mid-sized transport companies. |
| Shipping and Forwarding | 20 | $1,000,000 | Requires a substantial operational presence. |
2. Mandatory Divestment and Regularisation
The S.I. applies retroactively to existing foreign-owned businesses in the reserved sectors through Section 6:
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Regularisation Plan Deadline: Existing businesses have only 30 days to submit a detailed regularisation plan.
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Forced Equity Dilution: Foreign nationals must divest a minimum of 75%Â of their equity to Zimbabwean citizens within a three-year period.
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Annual Milestones: This divestment must occur in annual tranches of no less than 25%per annum.
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This ensures the foreign owner’s retained equity does not exceed 25% after three years, fully reversing the 51/49Â ownership ratio that was previously removed in 2020 (except for platinum and diamonds).
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Penalty for Non-Compliance: Failure to comply with the regularisation plan results in the suspension or revocation of business licenses (Section 6(3)).
This is the most impactful clause, providing a fixed, non-negotiable exit timeline for majority foreign ownership in the designated sectors.
3. Beneficial Ownership (BO) Enforcement
Section 5 is a direct response to practices used to circumvent indigenisation laws through ‘fronting’ (using a local nominee as the registered owner).
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Transparency Requirement: The Unit is empowered to demand a sworn declaration of beneficial ownership to identify the true owner who enjoys the economic benefits of the business.
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High-Level Deterrent: Making a false declaration is a serious criminal offense, punishable by a fine or imprisonment of three to five years (Section 5(4)(b)). This signals a strong move to prosecute those attempting to evade the ownership requirements.
4. Overall Economic Impact Assessment
| Aspect | Impact of S.I. 215 of 2025 | Outlook |
| Local Empowerment | High: Ensures local citizens dominate specific service and retail value chains, theoretically boosting local job creation and wealth. | Positive for local entrepreneurs, especially in the informal and small-scale formal sectors. |
| Foreign Direct Investment (FDI) | Negative: The re-imposition of forced divestment (the $75\%$ local equity requirement) and the high capital thresholds create uncertainty and raise the political risk premium for foreign investors across the economy. | Concerns for investors, as it contradicts the 2020 policy of removing indigenisation requirements outside of strategic minerals. |
| Ease of Doing Business | Worsens: The threat of license revocation, premise closure, and criminal penalties for non-compliance increases regulatory risk and administrative burden. | Challenging for existing foreign entities who must now execute a complex divestment plan quickly. |
| Strategic Focus | Clear: The policy is now surgically focused on protecting local businesses in the consumer and service markets, rather than broadly restricting large-scale manufacturing or mining projects (which were the focus of the original 2008 Act). | Focused on economic nationalism in non-strategic sectors. |
In conclusion, S.I. 215 of 2025 is a definitive move to empower local citizens by setting up high, unavoidable barriers to entry for foreign investment in numerous sectors. It uses strict deadlines, forced divestment, and criminal penalties to ensure the rapid de-foreignisation of these parts of the economy.
