Understanding the Different Types of Trusts in Zimbabwe

There are different types of trusts in Zimbabwe. There is no exhaustive list of the types of trusts that one can register or establish in Zimbabwe, however the most common types of trusts in operation or use in Zimbabwe include, but are not limited to the following:

(a) Charitable Trust: A charitable trust is one whose purpose is devoted to educational, charitable or religious purposes and set up for the public benefit.

(b) Debenture Trust: This type of trust is generally established for the protection of the interests of debenture holders (i.e., lenders) where a number of people lend money to a company and there is need to control the rights of the lenders. It is a secured borrowing trust vehicle.

(c) Educational Trust: This type of trust is frequently used to establish schools. Most education trusts in Zimbabwe are known as ‘trust schools’ or non-governmental schools. This type of trust is also used to provide bursaries and scholarships.

(d) Family Trust: This type of trust is the most common type of trust in Zimbabwe in modern times, and is also known as an ownership trust in the strict sense. It is a type of trust that is generally created for the sole benefit of a particular family or for a particular group of a family which is usually identified in the deed of trust by name, descent or by degree of kinship to the founder.

(e) Share Ownership Trust: This type of trust is peculiar to Zimbabwe as it is a trust which was established by the Zimbabwean government in furtherance of its ambitious indigenisation policy. There are three (3) types of share ownership trusts in Zimbabwe, namely the: Community Share Ownership Trusts (CSOTs), Employee Share Ownership Trusts (ESOTs) and Management Share Ownership Trusts (MSOTs).

(f) Statutory Trusts: This type of trust is one which is established for the public at large, and for the administration, management and holding of property in trust for the public benefit of the people of Zimbabwe in terms of a specific piece of legislation and is generally vested in a Board of Trustees, and in some cases, vested in the President.

(g) Unit Trusts: This type of trust is one in terms of which undertakings in funds of investors are pooled and invested in a diverse range of investments by managers of the unit trust.