How to Register a Sole Proprietorship (Sole Trader) in Zimbabwe

Starting out as a sole proprietor in Zimbabwe is an attractive option for professionals seeking independence and flexibility. Whether you’re a consultant, a creative, or a small-scale entrepreneur, working for yourself offers the freedom to manage your own clients, set your rates, and build a business around your skills.

The country’s self-employment environment is relatively accessible, and many people find that establishing a small business is simpler than forming a company. However, the process still involves some formal steps such as registration, record-keeping, and understanding how income is taxed. The paperwork can take time to navigate, especially if you’re new to business administration, but it’s manageable once you know what’s required.

One of the biggest appeals of a sole proprietorship is its low start-up cost and the ability to begin trading quickly without needing shareholders or complex structures. You maintain full control over your decisions and profits, though that also means you carry full responsibility for any business risks or debts.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Always verify information with official sources or consult a local professional before taking action.

What is a sole proprietorship in Zimbabwe?

In Zimbabwe, a sole proprietorship is officially referred to as a sole trader. There is no formal local-language translation used in law or business administration.

Depending on context, it may also be called:

• Sole trader
• Self-employed worker
• Independent contractor

All these terms describe one person legally operating a business without forming a company.

How does a sole proprietorship work in Zimbabwe?

Sole proprietorship vs. other business structures in Zimbabwe

While becoming a sole trader is the simplest way to start working for yourself, there are other business structures available in Zimbabwe, such as forming a private company (Pvt Ltd) or a partnership. Each has its advantages depending on your goals, level of risk, and whether you plan to hire employees or seek investors.

The table below compares the key differences between a sole proprietorship and a private company to help you decide which model suits your situation best.

Step-by-step guide: How to register a sole proprietorship in Zimbabwe

Step 1: Check your eligibility

You must be a natural person to register as a sole trader. Zimbabwean citizens and permanent residents with valid identification and a local address can register without restriction. Foreign nationals may also operate as sole traders, provided they hold the necessary immigration status or business permits required to work or trade legally in the country.

Step 2: Choose your business name

You can operate under your personal name or select a trading name. If you choose a trade name, make sure it isn’t misleading or already used by another business. While not mandatory to register a trade name, conducting a quick name search helps prevent conflicts.

Step 3: Gather required documents

Before applying, prepare the following:

• Valid national ID or passport
• Proof of address (such as a utility bill or tenancy agreement)
• Bank account or proof of banking details
• Completed business registration form for a Business Partner Number (BPN)

Step 4: Register for tax purposes

As a sole proprietor, you do not need to register your business with the Companies Registry or any separate commercial register. Instead, you’ll need to register online to obtain a BPN. This identifier is used for all tax-related obligations, including income tax, VAT, and withholding. The process involves submitting your personal and banking details, uploading supporting documents, and waiting for verification. If online registration is unavailable, you can complete Form REV 1 in person or via email.

Step 5: Pay registration fees and contributions

There is no specific fee charged for registering as a sole trader beyond obtaining your business tax identifier. However, if you employ staff, you must register for social security and contribute to employee benefits under national insurance programs. Contributions are typically calculated as a percentage of each employee’s earnings up to a capped amount. Aside from these, no regular fees are required for operating as a sole proprietor.

Step 6: Fulfill post-registration obligations

Once your registration is complete, you must remain compliant with reporting and tax requirements. This includes keeping proper records, filing annual self-assessment returns, and paying income tax on profits. If your turnover exceeds the VAT threshold, you’ll need to register for VAT and file returns periodically. Businesses hiring staff must also deduct and remit employment taxes monthly. Always update your registration if your business address, ownership, or activity changes, and notify the authorities if you cease trading.

Financial and tax obligations for sole proprietors in Zimbabwe

You are responsible for:

• Income tax/self-assessment: Business profits are taxed under progressive individual rates up to 40 %. You must file an annual self-assessment return and pay provisional tax quarterly based on your estimated annual income. (ZIMRA self-assessment return)
• VAT (Value Added Tax): The standard VAT rate is 15%, applicable once annual turnover exceeds $25,000 (USD) or the equivalent in ZiG. VAT returns are generally filed monthly or bi-monthly, with payments due by the 25th of the following month.
• Social security contributions: In Zimbabwe, social security contributions are only mandatory if you employ staff. Sole proprietors who work alone (without employees) are not required to register or make contributions to the National Social Security Authority (NSSA). If you employ staff, you must register for social security and remit monthly contributions. Employers and employees each contribute 4.5% of earnings (total 9%) up to a capped limit.
• Record-keeping: Maintain accurate accounting records, including invoices, receipts, and bank statements, in English. These must be kept for at least six years in case of an audit.
• Invoicing: All invoices should include your registration number, business details, client information, date, description of goods or services, and applicable tax amounts. Invoices must be numbered sequentially and retained for your records.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required to start as a sole trader in Zimbabwe?
There is no minimum capital requirement. You can start with any amount appropriate for your business.

Do sole traders need to register for VAT?
Yes, if annual turnover exceeds the equivalent of $25,000 (USD).

How much are standard contributions?
There are no fixed contributions unless you hire staff, in which case both employer and employee pay 4.5% each toward social security.

Can a sole trader hire employees?
Yes, but you must register for employee taxes and social security contributions.

How long does registration take?
Registration can take anywhere from a few days to several weeks, depending on processing times and document accuracy.

Can foreign nationals register as sole traders in Zimbabwe?
Yes, provided they meet residency and business permit requirements.

Do sole traders need a separate business bank account?
It’s not mandatory, but strongly recommended to separate business and personal finances.

What happens if I stop operating?
You should notify the tax authority of cessation, file a final return, and settle any outstanding taxes.

Are there government incentives for sole traders?
There are no specific nationwide incentives, but small-scale traders may qualify for presumptive tax regimes in certain sectors.

Can I use Deel as a sole trader to get paid by international clients?
Yes. Deel enables freelancers and sole traders in Zimbabwe to receive international payments easily and securely.

Does Deel generate compliant invoices?
Yes. Deel automatically generates invoices that meet legal and tax requirements.

Can Deel help with taxes?
Deel provides downloadable tax reports and records to help simplify your filings.

Does Deel offer contracts for freelancers?
Yes. Deel includes contract templates compliant with local laws so you can work safely with clients.

Can I access benefits through Deel as a sole trader?
Yes. Deel offers optional perks such as health insurance and retirement savings to give freelancers added security.