Victoria Falls Stock Exchange Limited (VFEX) is revolutionising the investment landscape by offering a wealth of opportunities for diaspora investors seeking to tap into the potential of Zimbabwe’s capital markets. With a focus on attracting and empowering diaspora investors, VFEX provides enticing incentives and streamlines the participation process, making it easier than ever to engage in investment activities.
The Victoria Falls Stock Exchange Limited (VFEX) recently participated as a conference partner at the Zimbabwe Capital Markets Conference held in London. The two-day event, hosted at the prestigious London Stock Exchange and the Queen Elizabeth II Conference Centre on April 20 and 21, 2023, aimed to highlight the crucial role of capital markets in economic growth and household savings.
The conference provided an ideal platform for VFEX to interact with retail investors and diaspora investment groups, with the primary objective of encouraging USD-denominated investments in Zimbabwe through VFEX. The VFEX team capitalized on this opportunity to share knowledge about capital markets initiatives and products, while also presenting the available investment opportunities for the diaspora in Zimbabwe.
By participating in the conference, VFEX aimed to expand its investor base by reaching out to global investors and the diaspora, emphasising the success stories and recent developments in Zimbabwe’s capital markets. The event also served as a means to integrate Zimbabwe with the global market, elevating its profile as a favorable investment destination.
One of the key highlights of the conference was the Investor Day held at the London Stock Exchange, where VFEX listed companies delivered presentations showcasing their success stories and the value proposition they offer to investors.
The second day featured a main plenary session, including panel discussions with investment firms, corporates, and senior government officials such as the Minister of Finance and Economic Development, Honourable Professor Mthuli Ncube. The discussions focused on investment opportunities, policy, risk reduction efforts, and the cost of doing business in Zimbabwe.
Diaspora participation in the local capital markets was a major theme of the conference. Recognizing the importance of diaspora investments in supporting the country’s development financing gap, the event aimed to provide information on investment options and available incentives for the diaspora. VFEX highlighted its various incentives for investors, including trading, clearing, and settlement in USD, no capital gains tax on the disposal of listed securities, lower withholding tax on dividends for foreign investors, reduced transaction costs, and minimized currency risk.
For those interested in participating, VFEX outlined a step-by-step process. Investors are required to open an FCA (Investment) Account through a registered bank, followed by opening a securities custodial account or Electronic Depository System (EDS) account through any of the registered VFEX stockbrokers. Finally, a trading account, also known as a Central Securities Depository (CSD) account, should be opened through a registered Depository Custodian in the CSD System.
To participate in VFEX and access these lucrative opportunities, diaspora investors can follow a straightforward step-by-step process. Firstly, they need to open an FCA (Investment) Account through a registered bank, informing the custodian if they already have an existing FCA account. Secondly, investors are required to open a securities custodial account or Electronic Depository System (EDS) account through any of the registered VFEX stockbrokers, facilitating secure and efficient transactions. Finally, investors need to open a trading account, also known as a Central Securities Depository (CSD) account, with a registered Depository Custodian (Custodian) in the CSD System. This involvement of reputable stakeholders ensures a transparent and regulated investment environment.
To open the necessary accounts, the following documentation is required:
Individuals:
- National ID/Passport
- Two passport-size pictures
- Proof of residence
- Source of income
Companies:
- Certificate of Incorporation
- Memorandum and Articles of Association
- CR 14 (Company Registration Form)
- Board resolution
- Two passport-size pictures of authorized signatories
Trusts:
- National IDs of the Trustees
- Two passport-size pictures of Trustees
- Proof of residence of Trustees
- Trust Deed
Societies, Investment Clubs, and Churches:
- Constitution/Certificate of Registration
- Resolution of the Governing body
- Two passport-size pictures of authorized signatories
- Proof of residence of authorized signatories
By providing the necessary documentation, diaspora investors can ensure a smooth account opening process, enabling them to participate actively in VFEX and capitalise on the available investment opportunities.
By simplifying the participation process, collaborating with esteemed institutions, and providing clear guidelines on required documentation, VFEX aims to empower diaspora investors to harness the potential of Zimbabwe’s capital markets. These strategic efforts not only open doors for diaspora investors to grow their portfolios but also contribute to the overall economic growth and development of Zimbabwe.
By participating in the Zimbabwe Capital Markets Conference, VFEX demonstrated its commitment to promoting diaspora investment and financial literacy. The conference served as a crucial platform to present the success stories of Zimbabwe’s capital markets, while also providing valuable insights and opportunities for global investors and the diaspora. With its attractive incentives and initiatives, VFEX aims to position Zimbabwe as an appealing investment destination and the resort City of Victoria Falls as an offshore financial center, facilitating sustainable economic growth and development.
The incentives offered by VFEX to diaspora investors include:
- Trading, Clearing, and Settlement in USD: VFEX allows investors to engage in trading activities, as well as clearing and settlement processes, denominated in US dollars. This feature provides a convenient and familiar investment environment for diaspora investors.
- No Capital Gains Tax: VFEX offers a significant advantage by exempting investors from paying capital gains tax on the disposal of listed securities. This exemption allows investors to maximize their returns without any additional tax burden.
- Lower Withholding Tax on Dividends: Foreign investors on VFEX benefit from a reduced withholding tax rate of 5% on dividends. This favorable tax treatment enhances the overall profitability of investments, ensuring higher returns for diaspora investors.
- Lower Transaction Costs: VFEX strives to minimize transaction costs, enabling investors to save on expenses associated with their investment activities. By reducing these costs, VFEX aims to enhance the attractiveness of investing in Zimbabwe’s capital markets.
- Reduced Currency Risk: VFEX provides an environment that minimizes currency risk for investors. By facilitating trading and settlement in USD, investors can avoid exposure to the volatility and uncertainty associated with fluctuating currency exchange rates.
To participate in VFEX and leverage these benefits, investors need to follow a simple step-by-step process:
Step 1: Open an FCA (Investment) Account
- Investors are required to open an Investment Account through a registered bank. If investors already possess an existing FCA account, they should inform the registered custodian about their intention to participate in VFEX.
Step 2: Open a Securities Custodial Account/Electronic Depository System (EDS) Account
- This step involves opening a securities custodial account or an Electronic Depository System (EDS) account through any of the registered VFEX stockbrokers. A comprehensive list of registered VFEX stockbrokers can be found at www.vfex.exchange/stock-brokers/.
Step 3: Open a Trading Account (Central Securities Depository – CSD Account)
- Investors are required to open a trading account, also known as a Central Securities Depository (CSD) account. This account is opened through a registered Depository Custodian (Custodian) within the CSD System. The following registered Custodians facilitate the opening of CSD accounts: CABS, CBZ, FBC, Stanbic, and Standard Chartered.
The involvement of these stakeholders ensures a transparent and efficient process for investors, enabling them to seamlessly participate in VFEX and capitalize on the available investment opportunities.
By offering a range of incentives and a clear roadmap for participation, VFEX aims to attract diaspora investors and provide them with a favorable environment to contribute to Zimbabwe’s economic growth. The step-by-step process outlined above, along with the involvement of registered banks, stockbrokers, and custodians, ensures a smooth and regulated experience for diaspora investors seeking to tap into the potential of Zimbabwe’s capital markets.
