What is a Botswana Branch (Or External Company)?
Botswana Companies Act requires any foreign company to apply for registration as an external company in order to operate, meaning to do business in Botswana. A foreign operating company in Botswana should apply for external company registration within 30 days.
If you are starting a business in Botswana, forming an external company is an alternative to incorporating a subsidiary company in Botswana. The External Company Registration Certificate acts as if it is a Certificate of Incorporation to form the basis for bank account opening and tax registration as permanent establishment.
Registration of documents
At the time of registration the foreign company should submit the Memorandum and Articles of Association, Certificate of Incorporation and a list of directors. The list may include directors responsible for Botswana operations. In that case the external company should submit a memorandum defining the powers and obligations of such a director. The foreign company should appoint an authorized agent (the one who is responsible for management of the company in Botswana) who shall be resident in Botswana and should have a registered office in Botswana. At any time after registration, there may be changes in the constitution or directors or in authorized agent and registered office. These changes should be filed with Companies and Intellectual Property Authority (CIPA).
An external company can own properties in its name in Botswana (as if it is a Botswana incorporated company).
Accounts and Audit
If foreign company is a public company then it needs to file its foreign financial statements (with translation) with CIPA.
Signboards and Company Documents
A foreign company should always state the place of incorporation in any sign boards or commercial documents or company stationery.
Closure of branch office
Where a foreign company closes the office or is liquidated, it has to serve notice to CIPA within prescribed time limits. Botswana assets cannot be repatriated before settling creditors and tax payments within Botswana. A foreign company under voluntary liquidation may form a Botswana company in order to transfer its Botswana assets free of transfer duty.
Botswana branch pays a tax of 30% while a Botswana subsidiary like any other company pays 22% company tax or 15% in case of manufacturing companies or international financial services centre companies. Botswana branch is treated as a permanent establishment for Botswana tax purposes. Please see our tax section for more information on Botswana tax.