How to Register as a Sole Trader in Zambia

Learn how to register as a sole trader (sole proprietor) in Zambia: registration process, required documents, as well as the taxation system in this country.

Anja Simic
Written by Anja Simic
August 12, 2021
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Zambia is a country in South-East Africa. The capital city is Lusaka, the official currency is Zambian kwacha (ZMW, or simply K), and the official language is English. Unemployment and poverty are some serious problems for this country, but recent economic reforms have shown promising results. The economy has been highly dependent on the copper mining industry; however, the diversification program has resulted in the development of other sectors. In this scaling-economy country, most people who decide to start their own business choose to operate as sole traders.

Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.

Sole trader in Zambia

A sole trader (or sole proprietorship) is a business run by one person, the owner. There is no legal distinction between the owner and the business, and the liability is not limited. This means that the owner is liable with all their debts and assets and can operate the business with all of their fortune. It is easy to establish and run a sole proprietorship. This business form is highly flexible and can adapt to the changing environment with ease, unlike big companies with more complex structures. The decision-making is rather easy since you are the only one operating it. 

To operate a business legally, you have to register with the authorities first.

Business Name Registration

To register as a sole trader in Zambia, first, you have to register your business name. The registration is done at the Patents and Companies  Registration Agency (PACRA). The head office is located at Haile Selassie Avenue, Longacres, Lusaka. You can also visit a branch office in your region.

To apply for registration, ask for BN FORM III Application for Registration. Fill out the form and submit it. Make sure you bring an ID document in case the authorities request identification. A fee of K166.00 will be charged. 

If the application is valid, you will obtain the Certificate of Registration, which should be displayed at the place of business.

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Taxpayer Registration in Zambia

In order to pay tax, all Zambian sole traders must register for a Taxpayer Identity Number (TPIN). This is a unique number linked to a tax profile and payment band. This process is done with the Zambia Revenue Authority (ZRA). You can complete the process by visiting any ZRA office, or you can register online. You will need to provide a copy of your National Registration Card (NRC).

Upon registration, you will be given a Taxpayer Identification Number (TPIN).

Companies with a turnover of up to ZMW 800,000, but that have opted for voluntary VAT registration are not liable for turnover tax. The turnover tax applies at a rate of 4% of the monthly turnover and is a final tax.

The personal income tax rate varies between 25% and 37,5%. The standard VAT rate is calculated at 16% of all goods and services.

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