Compelling Reasons to Invest in Botswana
- Stable Economy
- Since independence in 1966 Botswana Democratic Party has won in all elections has led the country to date.
- No foreign exchange controls.
- Foreign exchange controls were abolished in 1999.
- Access to huge SADC (Southern African Development Community) market of 200 million people, Europe and the USA.
- SADC headquarters is located in Botswana. Southern African Customs Union (SACU) allows movement of goods amongst South Africa, Swaziland, Lesotho, Namibia and Botswana free of customs duty
- Botswana has duty free and quota free access tEurope
- African Growth Opportunities Act enables Botswana texport tthe USA on a liberal basis.
- Botswana has trade agreement with Zimbabwe.
- Low tax regime
- Company tax 22%
- Dividend tax 7.5%
- Personal income tax maximum marginal rate 25%
- Manufacturing companies tax 15%
- International Financial Services Companies tax 15% with 0% dividend tax
- Ever-expanding network of Tax treaties include countries like the UK, Zimbabwe, Mauritius, South Africa, France, India, Barbados, Lesotho, Swaziland, etc.
- Industrial relations are good and trade unions are not militant.
- Zero tolerance to corruption.
- Moderate levels of inflation (7.4% in November 2012)
- Protection of foreign investment
- Constitution prohibits nationalisation of private companies
- Signatory to the World Bank's Multilateral Investment Guarantee Agency (MIGA).
- Signatory to bilateral investment treaty in 1997 with the Overseas Private Investment Corporation (OPIC), which provides guarantees for US private investors.
Main Motivation to Invest in Botswana
- Botswana is one of the best performing economies of Africa. It does not have foreign exchange controls and it is a low tax regime. These are strong general reasons motivating investors to invest in Botswana.
- It is borders South Africa, a channel or conduit to do business with rest of Southern Africa. Botswana is a regional hub. Botswana is a regional financial services centre. Botswana Government lays emphasis on export promotion. These are strong marketing reasons to invest in Botswana.
- Botswana has a tradition to welcome foreigners and foreign investment. Besides Botswana is politically a very stable country. Botswana's investor friendliness and political stability attract investors to live peacefully in Botswana.
- Botswana Innovation Hub, power generation, transnational transport corridor network, tourism sector and consulting / professional services sector offer good opportunities to invest in Botswana.
- Bio-technology, Energy and Environment, Information and Communication Technology and Mining Technologies are four sectors currently receiving greatest focus from Botswana Innovation Hub.
- Food processing, Leather products manufacturing, Container glass and otehr silica related industries, Pharmaceuticals, Vegetable production using green houses and hydroponics, Dairy farming, Hatchery, Livestock production and feedlots, infrastructure development, development of commercial, industrial and hotel property - these sectors provide great investment opportunities.
How to Invest in Botswana
First step is to form a company in Botswana, open bank accounts and apply for residence and work permits for employees and investors. Second step is to obtain necessary approvals or permissions or licences to commence operations. Joint ventures are encouraged and it is advisable for investors to consider establishing joint venture partnerships with citizens.
Any business consulting firm such as RSM Gurugroup will be able to advise and guide foreign investors to invest in Botswana. Botswana Export Development and Investment Authority offers 1-stop service to investors to process all the necessary permissions, approvals, residence and work permits.
Point based system
Investors sponsoring projects under Hubs such as regional financial services centre, Botswana innovation hub, etc. are given automatic approvals for their residence and work permits. For others following Point Based System of appraisal is in use effective from February 2013:-
|INVESTOR FRESH APPLICATION||TIER 2 - PRODUCTION SECTOR||TIER 3 - SERVICES SECTOR|
|Number of Batswana Employees||20||20|
|Proportion of Batswana partners||20||20|
|Effective Communication mechanism||10||10|
|Qualifications / Experience||15|
|General Business Experience||10||10|
|Residence in Botswana||10||10|
|Pass Mark (60%)||81||90|
In respect of employees, point based system is as under:-
|English / Setswana||10|
|Relevant Work Experience||40|
|Pass Mark %age||60%|