TerraLex Cross-Border Guide to Cross-Border Guide to Business Investment in Africa

The following legal entities can be incorporated in this jurisdiction: 1. Private company limited by shares; 2. public company limited by shares; 3. external company (registered branch of foreign company); 4. public or private company limited by guarantee; and 5. close company.

The principal legislation in this regard is the Companies Act 32 of 2004.

Non-residents may hold shares in a Botswana company. One resident director is required for a private company and two resident directors for a public company. The registered office must be in Botswana. Companies are usually registered within 1 week once all documents are submitted...

There are no minimum share capital requirements in Botswana. In practice, private companies are typically incorporated with 100 or 120 shares.

Botswana does not impose any exchange control restrictions.

A private company must have a minimum of one director who must be ordinarily resident in Botswana. It is not required for such person to be a citizen of Botswana.

Not at present.

Not at present.

Central to the employment law framework in this jurisdiction is the Employment Act 10 of 2010. From the perspective of a foreign investor who needs to build a workforce in this jurisdiction, the use of fixed-term contracts is a consideration. Fixed-term contracts are allowed in terms of the Employment Act. Subject to the terms of the fixed - term contract, there is no limit as to how many times the contract may be renewed. The use of temporary employment services is common practice in Botswana.

Expats employed in Botswana must possess a valid work permit, and if they plan to stay in the country for more than 90 days in a year, they also need a residence permit. Botswana does not impose specific limitations on hiring foreign workers. Typically, for each expatriate staff member, there is a requirement to have a Botswana citizen as a trainee or apprentice.

Most of Botswana's territory falls under tribal land jurisdiction, regulated by the Tribal Land Act of 2018 and overseen by Land Boards. In cases where land is owned by the state, prospective investors interested in acquiring such land should get in touch with the Ministry of Land Management, Water, and Sanitation Services. It's essential to note that the Tribal Land Act strictly forbids the Land Board from granting or transferring tribal land rights to non-citizens without the Minister's exemption and consent.

Botswana has bilateral investment treaties in force with Germany and Switzerland. Botswana has also signed treaties with the Belgium-Luxembourg Economic Union, China, Ghana, Egypt, Malaysia, Mauritius, and Zimbabwe, but these have not yet entered into force.

Not at present.

Tax is imposed on income that is either directly earned from or considered to originate within Botswana. Dividends and interest from foreign sources are treated as if they have originated in Botswana and are subject to taxation when they accrue. Botswana maintains a uniform corporate tax rate of 22%. However, for companies that are not residents, the corporate tax rate is 30%.

In Botswana, the regulation of merger control is governed by the Competition Act of 2018. According to this act, a merger is defined as the direct or indirect acquisition or establishment of control, whether in whole or in part, over the business of another enterprise, by one or more enterprises. A merger in Botswana requires notification if it meets the following thresholds:

1. The annual turnover within Botswana of the enterprise or enterprises being acquired exceeds BWP10 million.
2. The value of assets located in Botswana of the enterprise or enterprises being acquired exceeds BWP10 million.
3. The involved enterprises, once the merger is completed, would collectively supply or acquire 20% or more of goods or services within Botswana.

Yes. Botswana indeed maintains a legal system that combines elements of both Roman-Dutch and English common law traditions. In rural areas, you will also find indigenous systems of tribal law and custom that handle everyday disputes and property matters; however, they are subject to the authority of statutory law.

Moreover, Botswana has taken steps to engage with international legal frameworks. It has ratified the convention regarding the Recognition and Enforcement of Foreign Arbitral Awards. Additionally, Botswana is a member state of the International Centre for Settlement of Investment Disputes and the Multilateral Investment Guarantee Agency.

None at present.

Botswana continues to promote and encourage foreign investment. Botswana has several incentives and preferences for both citizen-owned and locally based companies.

Botswana provides several industry specific incentives, including incentives for the manufacturing, mining, and farming industries.

Botswana enjoys stable infrastructure which may be attractive to foreign investors who which to enter the African space. The quality of infrastructure was greatly improved by the development of the mining industry, which required adequate transportation and communication networks.

Botswana is not a party to the OECD Anti-Bribery Convention so this may be a potential risk. That being said, Botswana but it is a party to the 2005 United Nations Convention against Corruption.