A Letter of Credit is an undertaking given by a financial institution to effect payment

A Letter of Credit is a written undertaking by a financial institution that promotes international trade by providing a conditional but irrevocable guarantee on account of an importer/buyer in favour of an exporter / seller. Credits are separate transactions from any pre-existing contractual relationship between the accreditor (importer) and the beneficiary (exporter) of the Letter of Credit. 

Features & Benefits

The Letter of Credit provides the following benefits:

  • Comfort to the beneficiary that once they receive the credit, payment will be received (provided he complies with the L/C terms)
  • The provision of pre-shipment finance (on the strength of the L/C only, or on the strength of a specific advance authority contained therein) by the beneficiary's bankers
  • The provision of finance whilst the goods are afloat
  • Post-shipment finance
  • Occasionally, L/C's are used, not only in connection with the shipment of goods, but are also (mostly in the form of revolving L/C's) for the payment of disbursements, as a form of guarantee by an overseas bank (stand-by credit), etc

What do I need?

  • Memorandum & Articles of Association
  • Certificate of Incorporation / Registration
  • Identity particulars of Directors / Authorised signatories
  • CR14
  • Constitution (Informal Bodies)
  • Minutes (Informal Bodies)
  • Proof of Residence – Directors / Authorised signatories (Zesa/ Telone or Water Bills)
  • Latest annual tax return to ZIMRA
  • CR2
  • Passport photos of Directors and Signatories