The Zimbabwean government has issued a sweeping directive giving foreign business owners three years to sell majority ownership of their companies to local citizens, under new indigenisation regulations that took effect on December 12, 2025.
The policy, officially titled the Indigenisation and Economic Empowerment (Foreign Participation in Reserved Sectors) Regulations 2025, was enacted through Statutory Instrument 215 of 2025 and is already sparking concern across the small and medium-scale business sector.
Under the new rules, foreign-owned businesses operating in sectors now reserved exclusively for Zimbabweans must divest 75% of their equity to local citizens, with full compliance required by December 2028. For many foreign operators, the directive presents a stark choice: find local partners or exit the market.
The regulation covers a wide range of everyday commercial activities previously open to foreigners, including:
• Barber shops and beauty salons
• Bakeries and small-scale grain milling
• Employment and estate agencies
• Advertising firms
• Arts and crafts marketing and distribution
• Artisanal mining
• Borehole drilling
• Passenger transport, car hire and valet services
• Pharmaceutical retail outlets
However, limited exemptions exist for investors willing to commit significant capital. In retail and wholesale trade, foreign participation is only allowed with a minimum $20 million investment and at least 200 Zimbabwean employees. The haulage and logistics sector remains open at a lower threshold of $10 million investment and 100 employees.
The government insists that large-scale mining, banking and other major industries remain open to foreign investment, stating that the new measures are intended to protect the grassroots economy and promote citizen empowerment.
As the three-year divestment window begins, analysts say the policy will severely test investor confidence, job security, and the government’s ability to enforce one of its most ambitious economic reforms in years.
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