Establish a business in Namibia
A primary focus of our firm is to act as the first point of call for investors who intend to commence their operations in Namibia. A number of the key concerns faced by potential investors in Namibia have been briefly addressed hereunder. Should you require further information you are invited to contact us at the contact details listed on this website.
We on a daily basis incorporate Namibian Companies on behalf of clients. We further ensure that all company secretarial documentation relating to the new entity is put in place and is maintained. This includes that appointment of directors, appointment of auditors as well as the issue of the relevant Namibian Share Certificates.
We further have dormant entities (Namibian Shelf Companies) that have been registered in advance. A shelf company allows a client to immediately commence operations without having to go through the time consuming process of incorporating a new Namibian entity.
Should you want to incorporate a Namibian Company or if you want to acquire a Namibian Shelf Company, you are invited to contact us by send an e-mail to [email protected]
NAMIBIAN CORPORATE STRUCTURES
When investing in Namibia one of the first aspects to be considered by an investor is the type of entity or structure through which the operations in Namibia are to be conducted.
It is important to note that Namibia has no restrictions on the ownership of shares in Namibian entities by foreign nationals. The exception to this rule applies to agricultural land and certain regulated industries.
In Namibia a business can be managed and property purchased through companies, closed corporations and/or business trusts. Namibia further has different types of companies which are incorporated in terms of the provisions of the Namibian Companies Act; i.e. Public Namibian Companies and Private Namibian Companies.
In terms of Namibian law, an entity which has been incorporated has a distinct and separate legal personality. Under most circumstances a shareholder can not be held liable for the liabilities of the entity. There are however certain exceptions to this rule in terms whereof a director or member may be held liable should such a person have acted in bad faith in breach of the provisions of the Companies Act.
Should you require a Namibian Company or Namibian Close Corporation we are able to assist therein. We regularly assist clients in the incorporation of Namibian Companies as well as Namibian Close Corporations. We are further able to assist in the registration of foreign companies as External Companies in Namibia.
We further have pre-registered Namibian Companies [also known as Namibian Shelf Companies] that are immediately available to clients. Namibian Shelf Companies are private Namibian Companies that have been incorporated, but which have not entered into any transactions. We have Namibian Shelf Companies that are available to allow clients to immediately commence their operations through the entity.
We further assist clients in the registration of Namibian Trusts. A Namibian Trust provides a vehicle through which assets can be held, whilst being removed from the personal estate of the founder. Namibian trust law provides interesting and unique opportunities to individual investors. The Namibian Income Tax Act provides for a beneficial tax regime towards Namibian Trusts.
Namibia does not levy donations tax, capital gains tax (except for specific instances) or estate tax. This limited scope coupled with the Namibian source based taxation system makes Namibia an ideal location to use as a part of an international tax structure to hold assets that will have long term capital gains.
OBTAINING NAMIBIAN TAX DOMICILE
We have assisted a number of international clients in registering as Namibian taxpayers and in obtaining Namibian tax domicile. Certain of our clients are of the opinion that Namibia has a favorable environment to have as an tax domicile.
Having a Namibian structure that is not a Controlled Foreign Company (“CFC”) (in terms of South African law) has specific advantages to South African residents that emanate from the lower (South African) dividend tax rate in terms of the Namibia/South Africa Double Taxation Agreement as well as the fact that Namibia does not impose capital gains tax.
PROTECTION OF FOREIGN INVESTORS IN NAMIBIA
A further practical concern faced by new investors to Namibia pertains to the protection of their investments in Namibia.
Foreign investors to Namibia are protected by the provisions of the Namibian Foreign Investment Act. In terms of the provisions of the act a foreign investor may not be treated differently to a local Namibian . This provision in the Namibian Foreign Investment Act ensures that investors to Namibia can be assured of a measure of security which is not normally present with investments in developing countries. A foreign investor to Namibia will therefore have all the protections that are available to Namibians, together with the additional protections and benefits offered by the Namibian Foreign Investment Act.
A Certificate of Status Investment may be issued in terms of the Namibian Foreign Investment Act to a investor of whom the Minister is satisfied that the investor has invested (or intends to invests) a sufficient capital sum in Namibia.
A person to whom a Certificate of Status Investment in terms of the Foreign Investment Act has been issued obtains certain rights. These rights include the right to repatriate foreign capital from Namibia.
We have experienced that once an investor has obtained a Namibian Certificate of Status Investment he normally also has less difficulty in obtaining a Namibian Employment Permit.
Should you consider registering as a Status Investor in Namibia, you are invited to contact us in order to discuss the process.
The Namibian income tax system is based source based regime. It is therefore not concerned with where a taxpayer is domiciled, but rather takes into account the source of the income has been earned. Should such income be from a Namibian source or a deemed
Namibian source, the income will be taxable in Namibia. Non-residents temporarily employed in Namibia, or a foreign company trading in Namibia, will be deemed to have earned the income relating to the services or goods in Namibia. The income will therefore be taxable in Namibia. This situation may be regulated by a double-taxation agreement which may alter the situation. Investors are however advised to obtain specific advice prior to relying on a double taxation agreement.
Individuals in Namibia are taxed on a marginal scale over a series of income brackets, while Namibian Income Tax is levied on non-mining corporate entities at a rate of 32% on taxable income (less allowable deductions) which is derived from a Namibian source.
Namibia further levies value added tax (VAT) on all transactions entered into by a registered vendor. VAT is levied at a rate of 15%. A registered enterprise is allowed to reclaim input VAT on its inputs. In order to be able to reclaim (deduct) the VAT which is paid on local purchases or on imports a person or entity should first be registered as a VAT vendor.
Namibia further imposes number of withholding taxes on a broad range of payments to foreign entities. Unless a foreign investor correctly structures its operations, these withholding taxes may severely impact the profitability of its Namibian operations. You are invited to contact us in order to discuss the possible tax implications of the structure of your Namibian Operations.
How can we assist you in investing in Namibia?
Our secretarial services entity provides the following services:
- Outsourced Secretarial Function
We provide a full service outsourced secretarial function to clients. The function of the Company Secretary is outsourced to us by clients.
- Fiduciary Services
We provide a broad range of fiduciary services to selected foreign clients. This service includes acting as independent trustee and as non-executive director as well as taking the required steps to ensure that the active management of an entity is in Namibia.
- Submission of Namibian Annual Duty Returns.
We provide a service in terms whereof we submit annual returns as well as submit the payment of annual duties on behalf of clients.
* In terms of Section 181 of the Namibia Companies Act every Namibian Company (other than a non-profit association) is required to submit to the Registrar of Companies, an Annual Return stating certain information relating the Namibian Company.
* Section 182 (1) of the Namibian Companies Act further requires that each Namibian Company is to, no later than one month after its financial year end, pay Namibian Annual Duty.
- Acting as Independent Namibian Director or Trustee
A number of clients require the services of an independent Namibian director or trustee. In certain instances, and provided that clients are willing to subscribe to corporate governance good practices, we offer a service to act as independent Namibian director or trustee. This services adds considerable value to South African clients who want to ensure that their Namibian operations are not deemed to be a controlled foreign company in terms of the South African Income Tax Act.
- Directors Assistance
We have advised a number of clients on the process to follow regarding the appointment and removal of directors as well as the implementation of policies relating to directors. These include director rotation policies in line with Namibian Corporate Governance best practices.
We have recently advised a number of clients on the implementation of the new Namibian Corporate Governance Code known as the Namcode.
- Amendments to the Articles of Association
We have assisted clients in the amendment of the Articles of Association of Namibian Companies. The Memorandum and Articles of Association of Namibian Companies are normally prepared in a standard format, which in certain circumstances do not necessarily suit the needs of the specific company. In such instances we assist in the drafting the suitable amendments to the Articles of Association in order to comply with the requirements of the specific company.
- Amending the Capital Structure of Namibian Companies
We have assisted a number of clients with the allotment and issue of shares for their Namibian Companies. This includes the preparation of all relevant documents and notices as well as submission of the required returns of the allotments with the Namibian Registrar of Companies.
In certain instances, clients require an alteration to the capital structure of a company in order to meet their specific needs. We have assisted clients in the amending their share structure in order to issue additional shares or to issue different classes of shares. This is normally associated with the allocation of specific shares to a shareholder group or financier or with the reduction in the number of issued shares in a specific class.
We further provide a service in terms whereof we assist clients in the holding meetings required by the Namibian Companies Act. This service includes assistance with the preparation of the Agenda, circulation of notices for meetings as well as advise on practical manners to deal with complex situations at meetings.
A number of clients who are in the process of establishing their Namibian offices, further make use of our facilities in order to hold meetings.
- Keeping of Statutory Records
We currently assist a number of clients in the maintenance their statutory records. This includes updating the Namibian Company Registrar relating to the appointment of directors and members.
- Namibian Close Corporation Registrations
We further assist clients in the incorporation of Namibian Close Corporations. For a startup that is managed personally by a client a Namibian Close Corporation allows for certain benefits to a client. We further have dormant shelf close corporations that have been registered as to allow clients to take immediate ownership of the entity.
The basic advantage of a Namibian Close Corporation is found in the simplicity of its structure. For a business that is personally managed a close corporation is usually the appropriate vehicle. It is however important to note that only natural persons may be members of a Namibian Close Corporation. Where the beneficial owner will not involved in the day to day operations of the enterprise a Namibian Company is normally a better entity to use.
- Registration of External Companies in Namibia
In terms of the provisions of the Namibian Companies Act, any company which has not been incorporated in terms of Namibian Law , which has an establishment in Namibia is required to register as a external company in Namibia. A external companies are rarely registered as most investors prefer to operate through a subsidiary that are incorporated in Namibia. However, there may be certain advantages associated with registering a foreign entity as an external company in Namibia.