Foreign business owners in Zimbabwe have until 1 January 2014 to hand control of their companies to black Zimbabweans or face jail.
Instituting the "indigenisation and employment" law was one of Mugabe's central pledges ahead of his re-election in August, amid claims of electoral fraud from the opposition.
The law bans foreigners from controlling businesses across swathes of the economy, with retail and wholesale firms, hairdressers, beauty salons, bakers, employment agencies, agriculture, transport, estate agencies and advertising agencies all affected.
White- and foreign-controlled companies in all of these sectors must hand a controlling 51% share to black Zimbabweans.
Youth, Indigenisation and Economic Empowerment secretary George Magosvongwe said that after the deadline he will "bring in the enforcement agencies from right across the government to ensure the enforcement happens." Those refusing to relinquish businesses will be jailed, says the state-controlled Herald newspaper.
According to the newspaper, the policy is designed to clamp down on Nigerian and Chinese businesses operating in local markets since the collapse of Zimbabwean manufacturing, offering cheap goods and undercutting local traders.
Since 2002 Mugabe, who has been in power for 34 years, has seized land, buildings and equipment from white farmers worth approximately $6 billion. This led to a decline in agricultural production and economic collapse.
Mugabe claims that the British should compensate the white farmers under the terms of the 1979 independence agreement and blames the UK for undermining his country's economy.
Regional chiefs have voiced concern that money earmarked for them as part of the scheme has yet to materialise, reports the Herald.