How to start a business in Botswana?
I prepared for you a list of all the necessary information about how to start a business in Botswana. I’m sure that the list will help you to decide if Botswana is the right country for your operation.
The Republic of Botswana (opens in a new tab) is a country in the southern part of Africa that is recognized as a multi-party democracy with the longest tenure.
Biggest diamond mines in the world
At its borders is Zimbabwe in the northeast portion of the country and Namibia on the north and western sides. At the heart of this beautiful country is the Kalahari Desert and is beautifully enhanced with a landscape of the Okavango Delta (opens in a new tab).
Within the confines of the desert and its surrounding areas are both wildlife and diamonds with a heavy presence of elephants. Having within its borders the Orapa mine (opens in a new tab), which is one of the biggest diamond mines in the world, makes it one of the leaders in diamond production in existence today. Both the Kalahari Desert and the Okavango Delta provide respite for the animals during the country’s seasonal floods.
The Central Kalahari Game Reserve hosts many animals like wild dogs, cheetahs, giraffes and hyenas because of its massive open land with its water sources and rippling grasslands.
These natural resources provide options for those who are seeking to take advantage of the many business opportunities and beautiful scenery that Botswana has to offer.
Attributable to Botswana’s flexibility and invitation for international business to set up shop in this beautiful country, a business would be wise to explore the chance on how to start a business in Botswana.
Why it is good to have a company in Botswana
Along with the country’s natural resources and beautiful countryside, Botswana has established itself as one of the leading countries in the world as it relates to economic development and corporate perks that make the establishment of a corporation very enticing.
Some of the benefits as to why it is good to learn how to start a business in Botswana include:
World Trade Organization, Botswana is a member
The universal purpose of the World Trade Organization is to assure that world trade is engaged upon fairly and freely. In addition, it sets the ground rules for free-trade between different nations offering a systematic process for international commerce.
How to start a business in Botswana and the Economic growth
The overall economy in the continent of Africa is steady, however, the Botswanan economy is not only strong but also is stronger than most of the countries that make up the continent.
Put down to this impact, Botswana is an attractive country for trade and commerce throughout the entire world which makes it a striking destination for any new or established business. Accompanied by the proper business plan, profitability is more likely than not.
English-speaking talent market in Botswana
The Botswanan government has established as a priority for its citizens the importance of education.
In fact, it is so much of a priority that the majority of its national budget is invested in this field. Botswana provides a workforce above an 80% literacy rate, one of the highest rates for any African nation.
Most of its instructions in most schools and universities are provided in the English language which gives a language advantage to its locals.
As Botswana continues to invest in education, they equip all secondary schools with computers and supportive equipment.
Internet connections are being finalized and personal emails are being provided to all of its students.
As of today, the University of Botswana continues his expansion project, and with the advent of a Science and Technology University, this will make technology-savvy students attractive candidates for the labor demands of most businesses.
In addition, the Botswana government is encouraging established higher educational institutions to establish branches within the country.
Free flow of capital
The financial sector in Botswana is soaring. This sector includes institutions like banks, insurance companies and the stock market.
Their commercial banking system is highly regulated, and as a result, their exchange reserves rank among the highest in the developing world.
Additionally, there are few restrictions on the movement of capital within the country. Capital such as profits and dividends can be easily moved in and out of the country.
It has some of the lowest corporate tax rates in the region at around 15% for certain sectors. This provides incentives that keep the country as an attractive destination.
Some of these sectors include:
- Financial services
- Business Process Outsourcing for export
Specifically to the personal income tax, Botswana taxes at 25% at its highest.
This low tax rate for individuals allows each one to contribute heavily to the goods and services of the country which makes it a win-win for both the individual and families within the country.
A pivotal location for international trade
The country of Botswana has an excellent relationship not only to the surrounding areas but also in the United States and in Europe. These relationships provide advantages such as:
- Duty and Quota free access to 50 million customers in the Southern African Customs Union (opens in a new tab) (SACU).
- Preferred access to 200 million in the area of the Southern African Development Community (opens in a new tab) (SADC) market under the SADC Free Trade Area.
- Duty and Quota free access in the United States through an act called the African (opens in a new tab) Growth and Opportunity Act, AGOA.
- Duty and Quota free access due to the Interim Economic Partnership Agreement (IEPA) between SADC along the European Union (EU).
The country has an excellent relationship with some of the trade unions and can offer English-speaking labour that has been educated in the English language at competitive pay.
How to start a business in Botswana is inexpensive
There is no minimum share value established in the country of Botswana. Due to this, it is very inexpensive to set up a corporation or branch of business. The low cost of establishment is a great incentive.
Botswana has positioned itself to be the 36th freest country in the world in matters of investment, trade, and labor markets.
How to start a business in Botswana the Banking privileges
The government of Botswana has made it exceptionally easy to establish a corporate bank account in its country. With the regulations in place, corporate entities are more prone to establish a presence where they know that their banking relationship is highly valued and appreciated.
Ease of ownership
Of all of the African companies, Botswana ranked as high as 3rd and came in at 38 out of 181 countries across the world in a World Bank survey.
Assignable to their investor-friendly reforms, the country has led the world in global innovations that have led to it being one of the easiest countries to start a business due to its revised labor laws and contract implementation procedures.
Some companies that begin businesses in the country can take advantage of some of the investor solutions that are provided by the government and also the Botswana Innovation Hub (BIH).
Low risk and in their marketing efforts to invite international business
Botswana ranks as one of the best places to establish a business ascribed to the government providing 5 to 10 years of tax holiday packages along with foreign companies being allowed 100% repatriation of a company’s profits and dividends.
Types of available companies
Because of the incentives available in Botswana, there are many companies that have established themselves and have done quite well in the country.
Caused by its labor force that is well-educated and the pool of applicants that are available and waiting, there are many companies that were formed to take advantage of the qualified class of applicants that were trained and educated in specific fields that makes the idea of establishing a company in the country an excellent investment.
Some of those industries that have provided outstanding opportunities are in the mining, tourism and also in the animal field.
The specific companies in these industries that have found success have different types of setups.
For example, the corporate structures that are allowed in Botswana include:
- Sole Proprietorship
- Private Limited Company
- Public Limited Company
- Branch Office
- Representative Office
Along with these various setups, specific companies have taken advantage of the prospects available, and they are:
BancABC is a financial services company that operates as a pan-African financial services provider. The bank group’s assets are far in excess of $1.81 billion, US dollars.
Choppies is a grocery and general merchandise retailer. Its more formal title is Choppies Enterprises Limited.
Debswana has established itself as one of the leaders in the production of diamonds in the world. It has established a relationship with DeBeers, and together, they have a beautiful mining operation that has changed the world and has had a significant impact on the economy in Botswana.
Letshego Holdings Limited
Letshego Holdings Limited is registered as a micro-finance company. Since its presence in Botswana, it has amassed in excess of US $634 million.
Wilderness Air is a charter airline that established its headquarters in Botswana.
Due to not only the diversity of the various projects that are taking place in Botswana but the natural resources and consumer demands bring about the opportunity for businesses to thrive.
Great businesses are invited to Botswana, in addition to entrepreneurship, the opportunity to establish itself in the country in the hopes that it will remain a permanent fixture as a part of its economy.
There are various entities that are in play that contribute to a free market that prevents a monopoly for the most part.
Because of the free market access, prices for consumer goods and services are being controlled, and the business entities are establishing themselves as very lucrative which is enticing additional branches of different entities to take notice and apply to learn how to start a business in Botswana.
In the process of learning how to start a business in Botswana, there are some very simple steps that operate as a precursor to an application being filed.
There are certain documents that need to be secured that will ensure that the establishment of new business and the experience of operations will go smoothly and easily.
These documents must be applied for and secured so that the government of Botswana can properly recognize the entity as being official and a legal contributor to the economy. As we will discuss in the next section, each document has a specific purpose.
As well as a brief overview as to what the document is and what it’s needed for, the processing of an application while establishing a business should be seamless as the government is trying to attract new business to the country.
Above the attraction of all new businesses, there is a pool of labor that features homegrown talent that is awaiting their opportunity to begin their careers and to live out their dreams.
Documents needed to start a business in Botswana
One of the efforts of the Botswana government is to create more diversity as the mining industry is the traditional source of income for the country.
As an incentive, Botswana has established a variety of incentives to attract more startups and small businesses.
This is one of the reasons why there is such a push to have many to increase their knowledge of how to start a business in Botswana.
To boost the small business sector, the ease of learning how to reduce unemployment begins with providing simple documents to get the business up and running as quickly as possible. The following steps will swiftly get a business started such as:
Establish a company name and get it registered
Reserving a business name is vital to the learning curve on how to start a business in Botswana.
After coming up with the name, the following documents are needed which are:
- The official Botswanan ID or a passport
- A single company name
- For business name, a Form RBN 1A
- A reservation fee must be paid in the amount of P20.00 [P = Pula]
After reserving the name, it may take up to 5 business days to process, and it stays reserved for a period of 30 days.
If the Registrar of Companies accepts the name within 30 days, all is well, but if not, the process of name reservation has to be started all over again with the fee due again too.
Company Registration in Botswana
It is mandatory that each company be registered with the Registrar of Companies and Intellectual Property (ROCIP) (opens in a new tab). This stands as the first step in the setup process.
Although this is the initial step, there are a series of requirements needed in order for a company to be registered.
An application form for the company needs to be officially recognized within the government with a reservation certificate too.
The application form number sometimes is different depending on the type of operation such as:
- Form 2 & Form 3A, a company limited by shares
- Form 2A & Form 3, a closed company
- Form 2B & Form 3, a company limited by guarantee
- Form 3, utilized under special circumstances
- Applicant’s proof of address and ID is needed, for a foreign citizen, a passport
Certified copies of each required document are necessary for each director, shareholder and secretary of the company.
The government requires an original set of each document when the packet is being submitted. The fee to register is P360.00 and must be paid at the time of submission and acceptance of the packet.
Secure an Industrial License
When proceeding with learning how to start a business in Botswana, one must obtain a license from the Industrial Affairs Department, Ministry of Trade and Industry.
Companies in the country have the option to pursue a trade license, but it must be secured through the Gaborone City Council.
The process generally takes about three weeks and is done in coordination when an inspection of the applicant’s premises is being done by the proper authorities which generally takes up to seven days
Each business that is established in Botswana shall be enrolled for taxable purposes and must first acquire a Tax Identification Number (TIN).
The request must be made from the Botswana Revenue Service (opens in a new tab). Further, the Department of Customs and Excise requires the registering of the Value Added Tax (VAT) which can take up to seven days.
How to start a business in Botswana? Conclusion
The Ministry of Trade and Industry in Botswana is committed to the development of the country’s economy, and the establishment of businesses within its borders.
With the incentives of low taxes, free flow of capital, a pivotal location for international trade, English-speaking talent market, and low risk and in their marketing efforts to invite international business, Botswana is an attractive location to establish a business. It is a member of the World Trade Organization, has a strong economy and has established itself as one of the leading countries in the world as it relates to economic development and corporate perks. It has some of the lowest corporate tax rates in the region, offers tax holidays, and foreign companies are allowed 100% repatriation of a company’s profits and dividends.
There are various entities that are in play that contribute to a free market that prevents a monopoly for the most part, and documents needed to start a business in Botswana are simple and easy to secure.
What are the benefits of starting a business in Botswana?
Botswana offers a great opportunity to establish and grow a successful business. It offers the advantage of a secure banking system, a strong economy, low taxes and the ability to repatriate profits and dividends, low cost of establishment, an educated workforce, and the freedom to operate a business in a secure environment. These benefits make it a great destination to start a business.
What documents are required to start a business in Botswana?
To start a business in Botswana, one must reserve a company name, register the business, obtain an industrial license and secure a taxation identification number. Each step requires specific documents, such as the official Botswanan ID or passport, Form RBN 1A, application form, proof of address and ID, certified copies of each required document, and payment of the registration fee. Acquiring a trade license is an option but must be obtained through the Gaborone City Council. Finally, the business must register for taxable purposes and acquire a Tax Identification Number.
What are the corporate structures that are allowed in Botswana?
The corporate structures that are allowed in Botswana include sole proprietorship, partnership, private limited company, public limited company, branch office and representative office. The various entities that have already established themselves in Botswana are BancABC, Choppies, Debswana, Letshego Holdings Limited and Wilderness Air. The government of Botswana encourages new businesses by offering incentives, a free market and assistance with the process of filing applications.