In Namibia, potential investors have the option of choosing which business vehicle best suits their needs in the country. Domestic business vehicles are either a private company, a public company, or a close corporation (i.e., depending on the complexity of the company ownership structure and the sector the investor wishes to operate in). Investors may also choose to register their existing businesses as foreign or external companies in Namibia, this too should be done in terms of provisions of the Companies Act, 2004. All the prior mentioned companies are required, once incorporated as a legal entity, to comply with all statutory requirements and post-registration obligations as it relates to either a company or a close corporation.
In Namibia, the Business and Intellectual Property Authority (BIPA), established in terms of the BIPA Act, 2016, is the competent Authority in Namibia responsible for regulating and administering business and intellectual property right registration and protection. The laws on business registration, albeit dated, continues to provide for a favourable investment and business environment, in that it allows for both local and foreign nationals to have business interest, without much hassle (Note: Laws on immigration may have specific requirements on work and business permits/visas)
A notable compliance requirement for business conduct in Namibia relates to businesses filing their annual returns with the Registrar of Business and Intellectual Property annually, regardless of the entity being in business or in operation. “I must stress that failure to comply with provisions of section 181 of the Companies Act, as it relates to annual return and lodgement and payment of the associated duty, may cause a business to become subject to deregistration and ends its legal status in Namibia” says Romancia Shoonga, Client Management Services Manager at BIPA.
In an effort to better streamline the incorporation process and ensure that potential business owners and/or investors are able to conduct business with ease, the Authority has recently embarked on a process of corporate law reform, in collaboration with its line ministry, the Ministry of Industrialisation and Trade (MIT). The latter process aims to ensure that Namibia becomes a viable and attractive investment destination, especially in sectors such as mining and oil and gas.
How to incorporate your company?
The process of registering any of the above-mentioned business entities commences with the reservation of a name. The fees for incorporating a business remains reasonable compared to other countries in the sub-region and very affordable for the ordinary Namibian. The name reservation application fee is N$75.00 and the turnaround time for processing a name reservation is approximately 2/3 days. Once reserved (approved), the reservation is valid for 60 days. During this time an application for incorporation of the entity should be lodged with BIPA and will be subject to the statutory approval process.
The most popular business that is registered in Namibia is Close Corporations (CC) as the process of registration is the least complex. Both a CC and a company remain limited liability entities in terms of their establishing laws. Close Corporations make up approximately 85% of all registered entities in the legal business register at BIPA.
Namibia has embarked on the reform of all business laws to ensure that business legislation meets the contemporary and future needs of investors, both domestic and foreign. In addition to modernising, simplifying and making the law relevant, this law reform is crucial in ensuring that Namibia’s processes for incorporation of legal persons are compliant with the Financial Action Task Force (FATF), a global anti-money laundering and terrorist financing watch dog’s requirements on beneficial ownership and other anti-money laundering requirements.
Beneficial ownership is a key term introduced by the FATF and it is aimed at determining who the beneficial owners of legal persons are. Beneficial owners therefore are defined as persons who ultimately have the right to some share of a legal entity’s income or assets or the ability to control its activities. Beneficial ownership transparency would thus be the revealing of how companies and other legal entities or arrangements, such as trusts are owned and controlled by their beneficial owners (Open Ownership, 2023). This helps potential and existing investors understand and appreciate the entities they enter business with both in Namibia and the sub-continental area from a compliance and investor relations perspective. The execution and conclusion of the business law reform is thus pivotal to unlocking and realising the potential held in a vast number of sectors both in Namibia and the greater SADC region.
Apart from the regulated sectors where partnership with Namibian nationals is mandatory (i.e., mining, farming, fishing, clearing and forwarding; and virtual asset service providers), foreign investors are welcome to conduct business in all sectors in Namibia. Namibia is a member of the Common Monetary Area (i.e., Namibia, Lesotho, Swaziland, and South Africa) has foreign exchange control mechanisms for the CMA. The country also enjoys duty-free access to the Southern African Customs Union, the United States, and the European Union. Namibia is recognised as the country with the best road infrastructure quality and connectivity in Africa by the Global Competitiveness Report, making doing business in these areas much easier, especially considering the corridors to and from other countries and access to much bigger markets. From a regional perspective, Namibia plays a crucial role by availing its port to the SADC regional group by means of the Trans Kalahari Corridor Group. A tripartite agreement between the governments of Botswana, South Africa and Namibia that has afforded the SADC member states dry port opportunities to access international markets via the ports of Walvis Bay and Lüderitz and vice versa. What has further strengthened Namibia as an investment destination is the standardisation of weighbridge equipment, the expeditious clearing of goods and materials at the various ports and borders; as well as the harmonised boarder operating hours at the Trans Kalahari Border posts. Meaning that though investors register their business in Namibia, they have the potential to offer their goods to total estimated population of 285 million SADC residents.
When considering the opportunities identified, energy stands out as a key opportunity for the entire sub-continent. As a new player in the sector, Namibia has much to offer to new investors and investors especially in the green energy space. Apart from energy, housing and the beneficiation of agricultural produce are key sectors that are yet to be truly capitalised upon. With regard to housing, if truly understood and harnessed, the lower mass housing market holds a lot of potential. Pharmaceuticals and mineral beneficiation are also key industries that are yet to tap into, for Namibia to grow fully mechanise its Growth at Home Strategy into fruition, engaging the product.
It all starts with creating an enabling business environment. By registering your business today, you have taken the first step towards creating shared ownership and being a local player in a global market for business entrepreneurs.
BIPA continues to advocate for business ownership with a touch of innovation. Entrepreneurial innovation allows businesses to create intellectual property (IP) and develop these IP assets into commercially viable products and services, thereby having a direct contribution towards economic development and growth.