Minimum ceiling for foreign investors pegged at $250 000

Ministry of Industry and Trade will from this year start issuing new business licenses to foreign investors upon payment of $250 000 [K117 million] to flush out proliferation of petty businesses by foreign traders.

In recent years, foreigners have been embarking on small businesses, which are seen as a threat to Malawian traders.

The foreign traders have also penetrated rural areas to run small shops that Malawians are capable of operating, forcing most Malawians out of business because they cannot compete on pricing.

Ministry of Industry and Trade spokesperson Wiskes Nkombezi told Business Review that the $250 000 requirement is provided for in the constitution, following review of the Business Licensing Act.

He said the requirements were gazetted on November 14 2014 and that all licenses expiring in June will be renewed after payment of the said amount.

“From now on, new application by non Malawians will only be granted upon satisfying the provision. If the traders do not show any evidence that they have injected $250 000 into the economy, they will not be granted licences.

“It is also indicated that the money has to be brought from outside Malawi. This will help ensure foreign investment development,” said Nkombezi.

He said a $250 000 investment is a big business that could create a several jobs.

Any trader who contravenes the requirement will be liable to pay a fine of K5 million [$10 680] and will serve a jail term depending on the court ruling.

“The idea is not to scare anybody, but to have business conducted in an orderly manner. We do not need people who come here to do petty businesses that can be done by locals,” said Nkombezi.

He warned foreigners against registering their businesses through a Malawian to beat certain requirements, saying any person found doing so will face the law.

Nkombezi, however, said only joint ventures are encouraged as they empower Malawians, but stressed that the ministry will grant licences upon being satisfied with the long-term plans of the joint venture.