By Stefan van Zijl
Namibia is regarded as a favourable country for mineral exploration and investment with a well-developed mining industry and existing infrastructure in a jurisdiction where there is political stability and low security risk.
The Policy Perception Index of Namibia, which forms part of the overall Investment Attractiveness Index, published in the Index Fraser Institute’s annual survey of mining and exploration companies, ranks Namibia as the second-highest country in Africa. This rating is expected to improve once the draft legislation NEEEF Bill, Namibia Investment Promotion Act, 2016 (NIPA) and the Income Tax Amendment Bill are finalised and enacted during 2020.
Foreign Investment Restrictions and Approvals
Foreign investment in Namibia is regulated under the Foreign Investment Act No 27 of 1990.
The Foreign Investment Act, 1990 was intended to be repealed by NIPA, but the latter has not yet come into force and is expected either to be amended substantially or substituted by a new act dealing more particularly with foreign investment.
The Foreign Investment Act, 1990 expressly stipulates that a foreign national may invest and engage in any business activity in Namibia which a Namibian may undertake and that, for the purposes of any law governing the establishment and carrying on of any business activity or the taxation of the income, or any other aspect of a business activity, a foreign national will not be in a different position to any Namibian, except as may be otherwise provided by the Foreign Investment Act, 1990.
The Foreign Investment Act, 1990 also stipulates that no foreign national engaged in a business activity in Namibia is required to provide for the participation of the government or any Namibian as shareholder or as partner in such business, or for the transfer of such business to the government or any Namibian provided, however, that it may be a condition of any licence, or other authorisation, or any agreement with a foreign national for the granting of rights over natural resources that the government shall be entitled to or may acquire an interest in any enterprise to be formed for the exploitation of such rights.
The Chamber of Commerce and Industry and the Chamber of Mines made proposals with regard to a revised version of NIPA which have been accepted by the government and it is expected that a revised NIPA will be introduced by March 2020. It is said that the revised form of NIPA addresses concerns that had been raised in respect thereof and that the revised act is expected to truly promote investment in Namibia.
There is a local participation requirement with regard to mining licences in Namibia, and the NEEEF Bill may make the Mining Charter applicable, which provides for requirements designed to address the issue of sustainable and broad-based economic and social transformation.
The contents of this document shall not be construed as legal advice. The reader hereof takes note that the contents of the Act are subject to interpretation and such interpretation includes inherent risks as opinions might differ. Should legal advice on any specific matter pertaining to the act be required, instructions are to be given to provide a legal opinion on the relevant subject matter.