DOING BUSINESS IN BOTSWANA IN 2018
Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Botswana. Our services include i) Botswana company incorporation ii) government license registration iii) corporate bank account opening in Botswana iv) employee recruitment v) visa strategies and vi) office rental solutions in Botswana.
|Summary||LLC||IFSC company||Fast business setup solution||Public limited company||Representative office||Branch office|
|Best use of company?||All purposes||Offshore financial|
|Close a customer deal now||To secure public funding||Marketing & research||Specific projects|
|How soon can you invoice Clients/sign sales contracts?||10 weeks||4 months||3 weeks||14 weeks||4 months||4 months|
|How soon can you hire staff?||10 weeks||4 months||3 weeks||14 weeks||4 months||4 months|
|How soon can you sign a lease agreement?||2 weeks||2 weeks||3 weeks||2 weeks||2 weeks||2 weeks|
|How long to supply corporate bank account numbers?||14 weeks||18 weeks||3 weeks||18 weeks||21 weeks||21 weeks|
|How long to supply company registration numbers?||10 weeks||4 months||3 weeks||14 weeks||4 months||4 months|
|Corporate tax rate on annual net profits?||22%||15%||22%||22%||0%||30%|
|Limited liability entity?||Yes||Yes||Yes||Yes||No||No|
|Minimum paid up share capital?||US$1||US$1||US$1||US$1||None||None|
|Government grants available?||Yes||No||Yes||Yes||No||Yes|
|Government approval required for foreign owners?||No||Yes||No||No||No||No|
|Can bid for Government contracts?||Yes||No||Yes||Yes||No||Yes|
|Corporate bank account location?||SCB Botswana||Barclays||FNB Botswana||Stanbic Bank||SCB Botswana||Barclays|
|Can secure trade finance?||Yes||Yes||Yes||Yes||No||Yes|
|VAT payable on sales to local customers?||12%||0%||12%||12%||0%||12%|
|Average total business set up engagement costs?||US$12,405||US$11,405||US$21,340||US$13,505||US$9,850||US$15,600|
|Average total engagement period?||4 months||5 months||5 months||5 months||6 months||6 months|
|Accounting and tax considerations||LLC||IFSC company||Fast business setup solution||Public limited company||Representative office||Branch office|
|Statutory corporate tax payable?||22%||15%||22%||22%||0%||30%|
|Legally tax exempt if properly structured?||No||No||No||No||Yes||No|
|Must file an annual company tax return?||Yes||Yes||Yes||Yes||Yes||Yes|
|Must file annual financial statements?||Yes||Yes||Yes||Yes||Yes||Yes|
|Must appoint an auditor?||Yes||Yes||Yes||Yes||No||No|
|Access to double taxation treaties?||Yes||Yes||Yes||Yes||No||Yes|
|Withholding tax on payments to foreign shareholders?||8%||0%||8%||8%||None||0%|
|Company Registration||LLC||IFSC company||Fast business setup solution||Public limited company||Representative office||Branch office|
|Minimum number of directors/managers?||1||1||1||2||1||1|
|Minimum number of shareholders/partners?||1||1||1||7||Parent company||Parent company|
|Maximum shareholding for foreigners?||100%||100%||100%||100%||100%||100%|
|Minimum statutory paid up share capital?||US$1||US$1||US$1||US$1||None||None|
|Shelf companies available?||Yes||No||Yes||No||No||No|
|Time to incorporate a new entity?||10 weeks||16 weeks||3 weeks||14 weeks||16 weeks||16 weeks|
|Can easily convert to a PLC?||Yes||No||Yes||Yes||No||No|
|Public registrar including directors and shareholders?||Yes||Yes||Yes||Yes||Yes||Yes|
|Can have preference shareholders?||Yes||Yes||Yes||Yes||No||No|
|This entity will likely be regulated by?||MTI||IFSC||MTI||MTI||MTI||MTI|
|Business Considerations||LLC||IFSC company||Fast business setup solution||Public limited company||Representative office||Branch office|
|Good entity for trademark registration?||Yes||No||Yes||Yes||No||Yes|
|Can secure an import and export license?||Yes||No||Yes||Yes||No||Yes|
|Resident director/manager/ legal representative required?||Yes|
|Sponsorship by a local citizen required?||No|
|Our Client needs to travel to Botswana for business set up?||No|
|Temporary physical office solutions available?||Yes|
|You need a local resident as bank signatory?||No|
|Can be wholly foreign owned?||Yes|
|Security deposit to be kept with Government?||No|
|Monthly VAT reporting to the Government?||Yes|
|Must sign an office lease agreement before incorporation?||Yes|
|Shareholders & directors documents to be attested/translated?||Yes|
|Foreign non resident director needs a work permit?||No|
|Maximum number of staff allowed?||None|
|Expatriate to local staff ratio?||None|
|Can secure residence visa for business owner?||Yes|
|Group HQ tax incentives available?||Yes|
|Other useful information|
|What will be included in my customer sales invoice?||Click here|
|This country has signed free trade agreements?||Yes|
|This country is a member of WIPO/TRIPS?||Yes|
|This country is a member of the ICSID?||Yes|
|Average custom duties suffered?||5.3%|
|Average monthly office rental? (US$ per sq m)||US$25|
|Minimum statutory monthly salary?||Depends on the business|
|Average monthly US$ salary for local skilled employees?||US$1,550|
|US$ deposit interest rate? (1 year average)||2%|
|Overseas remittance currency controls?||None|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Satisfactory|
|Crowd funding available in this country?||Yes|
Press the link headings below to read detailed, relevant, up to date information.
Advantages and Disadvantages
Advantages of Botswana company registration
- A Botswana Limited Liability Company (LLC) requires only one shareholder and one director, with no restrictions on foreign ownership. There is also no minimum paid-up capital to register a company in Botswana;
- Botswana has been a member of the World Trade Organization since 1995 and thus, enjoys all the benefits that membership provides;
- The economy of Botswana is benefited by the world’s largest diamond market, producing over 30 million carats annually. Diamond exports have ensured an adequate flow of foreign exchange which has contributed to the strengthening of Botswana’s economy;
- Botswana is positively ranked as the least corrupt country in Africa and ranks as the 28th least corrupt country in the world, according to the 2015 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians;
- Botswana was positively ranked as the 30th freest economy in the Heritage Foundation’s 2016 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets. Outstanding trade and fiscal freedom were listed as the main reasons behind the high rank;
- It is easy to open global corporate bank accounts to support business setup in Botswana. Healy Consultants works with internationally recognized banks to provide Botswana corporate bank account services.
Disadvantages of Botswana company registration
- Botswana company incorporation is complex and time consuming. According to the World Bank it takes 48 days on average to set up a business here, compared to an average of 27 days in Sub Saharan African countries and 9 in OECD countries;
- A Botswana LLC is liable for a corporate tax rate of 22%, and may be liable for VAT at the rate of 10% as well;
- Many business sectors in Botswana remain closed to foreign investment and in most cases, land cannot be sold to foreign investors;
- Botswana is negatively ranked as the 74th most competitive economy in the world in the Global Competitiveness Report 2014-2015;
- The relative slow internet bandwidth and power situation present additional challenges to doing business in Botswana;
- Botswana ranks as 72 out of 189 economies in ease of doing business according to the World Bank with the main business obstacles being trading across borders, dealing with construction permits and getting electricity.
Best uses for a Botswana companyBotswana is an ideal location to set up a manufacturing company as the government offers incentives such as i) low tax rates of 15% on taxable income ii) tax holidays for up to 10 years iii) free repatriation of profits and dividends and iv) double tax treaties with 12 countries that minimize withholding tax and allow investors to avoid double taxation.
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- Time to incorporate: Eight weeks
- Cost to set up: US$12,405
- Minimum capital: US$1
- Physical office required: Yes
- Shareholders: 1
- Directors: 1
- Company secretary: Yes
- Resident director: Yes
- Corporate tax rate: 22%
- Corporate tax base: Worldwide
- Shelf companies: Unavailable
- Main company type: Limited company
Useful links for Botswana
Government and public authority websites:
- Botswana Tax Authority
- Central Bank of Botswana
- Botswana Stock Exchange
- Botswana Chamber of Commerce
- Botswana airports
- Investment Policy Review; Bostwana
- Botswana Companies Act
- Investment Climate in Botswana
- KPMG – Botswan Country Profile
- Botswana Tax ans Summary Budget 2014/2015
Frequently asked questions
How can a foreigner start a business in Botswana?A Botswanan LLC is registered through the Ministry of Trade and Industry, with a minimum of one director and one oshareholder. Although the shareholder may be of any nationality, there must be a resident director in Botswana, which Healy Consultants can provide. Our blog has more information on why resident directors are required.
The minimum share capital required for incorporation can be as low as US$1, and foreign entrepreneurs are not required to travel to Botswana to complete company registration.
Healy Consultants will assist our Clients with Botswana company formation and also provide i) company secretarial and legal registered office services ii) corporate bank account opening services iii) goverment liaison services and iv) tax registration services
What types of companies and business entities are available to entrepreneurs in Botswana?The most commonly-preferred entities for foreign entrepreneurs are i) the limited liability company (LLC) ii) the public limited company (PLC) iii) the offshore company (IFSC) iv) the branch office and v) the representative office. For more information, read our detailed page on Botswana company types. For most business activities, Healy Consultants recommends incorporating an LLC.
How much does it cost to set up an LLC in Botswana?Healy Consultants’ fees to assist with registering an LLC in Botswana are US$10,455. This includes i) company incorporation ii) corporate bank account opening iii) providing a registered address iv) tax registration and v) government registration fees. Please refer to our detailed invoice for a breakdown of the fees.
Why incorporate in Botswana?Botswana is one of Africa’s most politically stable countries, with a recognized rule of law and a low crime rate. As a result, the country ranks as the least corrupt country in Africa. Furthermore, entrepreneurs will have access to benefits including i) the possibility of corporate tax exemptions for up to 10 years for government-approved projects ii) double taxation avoidance treaties in place with countries like South Africa, the UK, Sweden, France and Russia iii) a large, English-speaking skilled labour pool iv) free repatriation of profits, dividends and capital.
Is a resident director required for the company formation process in Botswana?Yes, appointing a resident director is mandatory in Botswana. However, if our Clients are unable to arrange for a local individual to fill this statutory position, Healy Consultants will be happy to assist. Visit our page on our resident director services.
What is the corporate tax rate in Botswana?The standard corporate income tax rate in Botswana is 22% on all profits. However, a reduced rate of 15% applies to companies in the mnaufacturing and financial services sectors, in which the Botswanan government is trying to incentivise investment.
How long does it take to set up a Botswanan company?On average, registration of a company in Botswana will take approximately 4 months from the time the application is completed and all supporting documents are presented to the Ministry of Trade and Industry.