Botswana is one of the countries in Southern Africa whose economy benefits from the diamond industry. But, thanks to progressive policies and considerable capital investment, the country has managed to create one of the most fast-developed African economies and reduced its dependence on natural resources. If you are interested in starting a business in this country, your presence here may be arranged in one of these forms.
Major Forms of Legal and Business Presence
Company registration in Botswana may be carried out after choosing one of these available forms:
- Limited Liability Company – a legal entity where one shareholder is required, of any nationality. The liability of shareholders is limited to the sums invested only – they don’t risk losing in excess of such amounts. There are no requirements for chartered capital of this entity. Only one director is required for this enterprise.
- Public Limited Company – an entity that may involve extra financing from the public. At least seven shareholders are required to form this type of enterprise. At least two directors should be appointed, one of which should be a local resident. There are no capital requirements for this type of entity too. But, the share capital should be enough for the types of activities an entity is going to conduct.
- Branch – an option available to foreign entities that enables 100% foreign ownership and requires one director only. It can conduct the same types of activities as a foreign company abroad.
Registration Requirements and Steps
Company registration in Botswana may be completed after passing these preliminary registration steps:
- Defining commercial priorities you intend to realize through a local entity.
- Choosing, checking, and reserving a business name for a future entity.
- Collecting details about founders and managers of a future enterprise.
- Arranging the registered address for a future entity.
- Drafting statutory documents and registration forms for a future entity.
- Submitting required documents to the registrar.
- Registration for tax and social security purposes.
- Obtaining additional licenses and permits that may be necessary for regulated types of activities.
Legal and Regulatory Framework
The local legal framework is flexible for starting a business and encourages foreign investments. There are no requirements for the nationality of shareholders and the initial capital of an entity. The company registration procedure is not bureaucratized.
The principal legal act for starting and operating companies is the Companies Act. Major state authorities foreign investors may deal with while operating in Botswana are the Companies and Intellectual Property Authority, the Ministry of Investment, Trade and Industry, the Botswana Revenue Service, and the Non-Bank Financial Institutions Regulatory Authority.
Tax System of Botswana
If you wish to register or buy a company in Botswana, the following tax highlights also should be taken into consideration:
- Corporate income tax (CIT) rate – 22%
- Personal income tax rate – 25%
- Value-added tax rate – 12%
- Withholding tax rates – (i) dividends – 7.5% (ii) interests – 15% (iii) royalties – 15%
- Capital gains tax rates – (i) corporate – subject to the basic CIT rate(ii) personal – 25%
Advantages of the Jurisdiction
Company registration in Botswana may turn out to be a beneficial deal in view of the following advantages attributed to this jurisdiction:
- Conditions for starting a business by foreigners are flexible and not burdensome.
- Botswana is a WTO member and enjoys all related benefits.
- It provided a high level of trading and fiscal freedom.
- It is generally easy to open a corporate bank account for a local company.
- Zero currency control in Botswana.
How Aotopay Specialists May Help You
We offer prompt company registration and bank account opening services in Botswana and worldwide. New registration and ready-made options.