It all started with one paragraph in a presidential speech backed up by many tweets from Finance Minister Professor Mthuli Ncube. The Victoria Falls Stock Exchange as a part of the Victoria Falls Financial Centre is starting to take shape. Statutory Instrument 196 of 2020 explained some more rules to the VFSE to add to the tax rules we already received in the budget review. The instrument gives legal effect to some of the things we have heard said about the VFSE.

S.I. 196 of 2020 Final

All counters to be dollar-denominated

One of the biggest highlights was that the counters will be dollar-denominated. This was known but seeing it on paper is always a comfort. Companies on the VFSE will be allowed to raise capital from offshore sources and free funds.  The later is very important because it was one of the biggest questions; if and how residents will be allowed to participate. We should expect more rules to follow such as the declaration of source of funds for free funds holders but for now, we can celebrate our participation in the VFSE.

Resident companies can float 20% of the capital

Resident listed companies in Zimbabwe will be allowed to float up to 20% of their capital on the VFSE. This opens a very interesting door for locally listed companies but also points to something many will be unhappy to hear. If local companies will have 20% of the share capital on the VFSE, how will the US dollar price on the VFSE and the Zimbabwean Dollar price on the ZSE be reconciled?  Before we think we will get another implied rate it is more likely rules will be established on domestic liquidations to fix them at the auction-rate or straight to Nostro accounts which are also forced to liquidate at the auction rate. It’s not quite the same problem as fungibility because the shares cannot cross exchanges. Either way, it does give Zimbabwean companies great opportunities to raise foreign currency-denominated capital and we will discuss how this can be handy through another rule in SI 196.

Non-resident Companies can delist on ZSE to list on VFSE

Non-resident companies previously listed on the ZSE may delist from the ZSE and be allowed to list on the VFSE. This paves the way for the fungibles, Old Mutual, SeedCo and PPC  formally delist from the ZSE and move over to the VFSE. The caveat is they will be required to invest 20% of their capital in Zimbabwe within 5 years. This is no problem for these companies with existing large investments in Zimbabwe. By extension, this opens up the VFSE to non-resident listings. When the news broke we discussed the different types of financial centres and it looks like the Victoria Falls Financial Centre is gunning to be an offshore financial centre.

New resident listings welcome

Resident companies which were previously unlisted are welcome to raise capital by listing on the VFSE. They too have been hamstrung with the 20% local investment of capital within 5 years caveat. Not the worst of terms for a company operating Zimbabwe to be allowed to access capital in foreign currency.  Listing requirements will have to be explained in detail via The ZSE as the document refers to them for listing. Could this be the little push needed to see more IPOs on local markets?

Capital can be held locally or offshore

Earlier I mentioned the play for the Offshore Financial Centre. Capital raised on the VFSE can be kept in offshore banks, so long as it is kept in registered recognised banks. This adds to the allure of the VFSE as non-resident companies will look at the tax rules announced in the budget review and see great opportunities. It’s important to note the tax implications here, they may still have to pay tax where they operate but on the exchange where they are registered, they will not be taxed. Shareholders will also look at the VSFE positively given the lower dividend tax and absence of Capital Gains Tax when you dispose of your shares.



ZSE listed

VFSE listed

Corporate Tax




Capital Gains Tax on Sale




Dividend Withholding Tax




* – Withholding taxes applied to foreign shareholders.

The ZSE resumed with a bloodbath on Monday 3rd August that resulted in a 4.49% drop on the first day. The VFSE gaining momentum is welcome by investors who will also be pleased on the inclusion of those with free funds in market participants for the VFSE.