From salons to bakeries, Zimbabwe clamps down on foreign ownership
From hair salons and bakeries to transport, retail and artisanal mining, Zimbabwe has moved to reclaim broad sectors of its economy for local businesses, ordering foreign-owned firms to surrender control or exit.
Zimbabwe has unveiled one of its most far-reaching economic interventions in years, mandating foreign-owned businesses operating in designated sectors to hand over a controlling 75% stake to indigenous Zimbabweans within three years.
The measures are contained in Statutory Instrument 215 of 2025, formally titled the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations, 2025. They establish a phased but accelerated localisation regime, compelling affected firms to divest at least 25% of their equity each year, beginning immediately.
From the date of gazetting, foreign-owned companies operating in the reserved sectors have 30 days to submit regularisation plans, setting out how they will comply with the new ownership requirements.
At the heart of the regulations is Zimbabwe’s attempt to reserve select industries for its citizens — most of which have long been dominated by small and medium-sized enterprises, but which have increasingly been taken over by foreign operators in recent years.
The sectors now fully reserved for indigenous citizens include:
- Barber shops, hairdressing and beauty salons
- Bakeries
- Employment agencies
- Advertising agencies
- Valet services
- Pharmaceutical retailing
- Tobacco grading and packaging
- Artisanal mining
- Borehole drilling
- Local arts and crafts marketing and distribution
Passenger transport services such as taxis and commuter buses, along with estate agencies, clearing and customs services, are also effectively restricted, though with limited exceptions.
In three sectors, foreign participation is permitted only where the business operates under a recognised international brand or franchise. These include passenger transport, estate agencies, and clearing and customs services.
For other sectors, foreign investors are not banned outright but face steep entry barriers designed to restrict participation to large-scale operations. Regulations set explicit minimum investment and employment thresholds:
- Retail and wholesale trade require a minimum investment of $20 million and at least 200 employees
- Grain milling requires $25 million and 50 employees
- Haulage and logistics must meet a $10 million investment threshold with 100 employees
- Shipping and freight forwarding require $1 million and a minimum workforce of 20 employees
Penalties
Existing foreign-owned businesses operating in reserved sectors are given three years to comply with the localisation timetable.
The regulations explicitly criminalise attempts to circumvent the law, including the use of fronting arrangements or nominee shareholders. Authorities are empowered to suspend or cancel operating licences for companies that fail to regularise their ownership structures within the stipulated period.
State media reports say enforcement will be strict, particularly in sectors such as artisanal mining, where the government has for years struggled to curb illegal operations and foreign syndicates, many of them involving Chinese nationals extracting gold, chrome and lithium.
Unaffected sectors
The government has been keen to stress that the regulations do not apply across the entire economy. Strategic and capital-intensive sectors — including banking, large-scale mining and other major industries — remain open to foreign ownership under existing laws.
Officials argue that the policy is a corrective measure rather than a reversal of Zimbabwe’s broader investment strategy, aimed at protecting informal and small-scale sectors from foreign encroachment.
While authorities frame the regulations as a long-overdue empowerment drive designed to restore economic agency to ordinary Zimbabweans, analysts warn that the abrupt scope and scale of the changes could unsettle investors and disrupt supply chains.
Forced divestments, tight deadlines and criminal penalties risk deepening perceptions of policy unpredictability in a country already grappling with capital shortages and fragile investor confidence.
Still, the message from Harare is unequivocal: in much of Zimbabwe’s day-to-day economy, local ownership is no longer optional — it is now mandatory.
This story is written and edited by the Global South World team, you can contact us here.
