1. BOTSWANA – GATEWAY TO AFRICA AND THE WORLD
Peter O’Halloran
Tax Partner BDO Gaborone
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2. Doing Business in Botswana
The Switzerland of Africa
Lowest tax rate in Africa
No exchange controls
Stable Political environment
Low crime rate
Roman Dutch Common Law
Solid adherence to the ‘rule of law’
Predominantly English speaking
Central in the region
Good infrastructure
Major International Banks
Facing the Challenges of Doing Business in Africa

3. BOTSWANA BUSINESS ENTITIES
Sole Proprietorships
Partnerships
Private Companies
I.F.S.C. Companies
Innovation Hub Companies
Public Companies
Trusts
Business Trusts
Partnerships and Trusts are subject to the same common law rules that the average South African would be used to
Facing the Challenges of Doing Business in Africa

4. Incentives offered in the Financial Services Sector of Botswana International Finances Services Centre of Botswana
For Companies that will do business in the region
No withholding taxes on dividends
No withholding taxes on interest earned
No withholding taxes on commercial royalties
15% flat rate company tax
Work permits easily obtained
Unilateral tax relief upon withholding or income taxes levied
Facing the Challenges of Doing Business in Africa

5. Botswana Innovation Hub
Generous telecommunications subsidies
Training subsidies
Low tax rate of 15%
Work permit exemptions
For mining innovation
Agricultural innovation
Business support innovation
Scientific
Possible Government assistance with research
Facing the Challenges of Doing Business in Africa

6. The Botswana Company Regime
100% foreign shareholding allowed
One Resident Director is required
No special rules regarding capitalisation
Tax Consequences for mining concerns which may be undercapitalised
For SA Taxpayers, dividends may be tax free
Companies may be trust owned
The Botswana International Trust Regime is World Class
Manufacture – 15% tax
Local Company 22% tax
Beware - Withholding tax
Facing the Challenges of Doing Business in Africa

7. Tax Rates in Botswana Individual – sliding scale top rate 25%
Company- Manufacturing 15%
Company- Innovation Hub 15%
Company –IFSC 15%
Company 22%
Trust- Beneficiary Rate- Max 25%/0%
Withholding tax on Dividends 7,5%
Dividends 0%
CGT at Death 0%
CGT – Land and Fixed Property
Indexed Base Cost 25%
CGT – Companies abatement
Death Duty (Capital Transfer or Donation) 5%
Facing the Challenges of Doing Business in Africa

8. Dangers in the region Botswana is a safe haven
Violent Crime statistics are low in Botswana
Residents have security of tenure
Rule of law
The Botswana International Trust regime
Provides the ideal vehicle to safeguard assets
Admin done in Botswana, financial assets offshore
High level of anonymity can be attained
Facing the Challenges of Doing Business in Africa

9. Gaborone 10% of the total population International Airport
One of the fastest growing cities
Home to SADC
Close to SA border
380 Km from Johannesburg
Diamond Hub
Stock Exchange
New High Court
Facing the Challenges of Doing Business in Africa

10. OPPORTUNITIES IN BOTSWANA

11. The Diamond Industry
Diamonds are the mainstay of the Botswana economy and the Diamond Mining Sector Accounts for 1/3 to ½ GDP
Per capita income of almost $ 6000 per annum
The dominant force is the De Beers Mining Company and Debswana. (Provides price stability and actively supports Botswana development)
Worlds largest Gem Diamond Mine is the Jwaneng mine, about 140 Km South west of Gaborone
Diamond Hub in Gaborone
Estimated 20 odd lifespan left in the Jwaneng mine
Other minerals are to be found and can be exploited in future
Facing the Challenges of Doing Business in Africa

12. TOURISM IN BOTSWANA Accounts for over 20 000 jobs
Has not yet reached full potential
Botswana has some of the largest game parks in Africa
Much of the land surface is still pristine
Revenues over $ 300 Million
Second Largest Industry
Facing the Challenges of Doing Business in Africa

13. AGRICULTURE Serious Government Support for Farmers
Farm equipment VAT exempt
Resident Cattle Farmers, up to 300 head herd – tax free income
Resident dry land farmers, up to 100 ha dry lands, - tax free income
A portion of the farming losses of an individual can be utilized to offset taxes
Botswana has various trade agreements with the EU
Southern and South Western Botswana is Beef Country with Ghanzi noted as one of the best beef areas
In the North, intensive agriculture is practiced, with spill points etc
Growth area in the economy
Facing the Challenges of Doing Business in Africa

14. Legal Matrix Roman Dutch Law is the common Law
By virtue of Section 2 of the Botswana Independence Act 1966
High Courts at Lobatse, Francistown and soon in Gaborone
Appeal Court in Lobatse
Close connection to the South African legal fraternity Many of the Appeal Court Judges are Senior SA Counsel
Companies Act, Insolvency Act very similar to that of South Africa
The VAT Act contains principles that are almost identical to that of South Africa
Likewise the Income Tax Act is similar
South African authorities are extensively used by Counsel and High Court Judges
Death penalty is extant
The Constitution is less voluminous than that of SA, but private ownership is guaranteed
Facing the Challenges of Doing Business in Africa

15. Communications
Soon to be connected to the Fibre Optic undersea cable for speed of internet access
Well developed landline and cellular telephone systems
Reliable Courier and Postal Services
Inexpensive Rail services for transport of goods
Air links to various African Countries, daily flights to South Africa
Facing the Challenges of Doing Business in Africa

16. The Botswana International Trust Regime
No Exchange Controls - the trust investment is made anywhere in the world
Non Residents are able to be listed as trustees of their Botswana International Trust
At present trusts are regulated under the Common Law
Total Anonymity of beneficiaries
Full protection of assets
Very low or no tax for non Citizen Beneficiaries in Botswana
The trust may be utilized in International tax and estate planning
Gaborone is close. Meetings can be held ‘in country’
Facing the Challenges of Doing Business in Africa

17. CURRENCY Exchange Controls were abolished in Botswana in 1999
Any person who banks in Botswana can move funds and receive funds from anywhere in the world
Resident Companies, Trusts and Individuals can hold offshore assets in any amount in any currency in any jurisdiction that they please
The only limitations are those of the financial institutions
It is easy for a Botswana Head Office to route money to any project and to receive money in Botswana
Facing the Challenges of Doing Business in Africa

18. Banking Services ABSA Life Bank ABC Bank Gaborone Barclays Bank
Capital Bank
FNB
Stanbic Bank
Standard Chartered Bank
Wesbank
Botswana is the ideal jurisdiction in the region for administration of individual or corporate financial affairs
Because of the proximity of Gaborone to Johannesburg, decisions can be made in Botswana. This is highly tax efficient
Facing the Challenges of Doing Business in Africa

19. BDO Botswana 70 Staff Members
Professional Staff include two South African lawyers, with rights of appearance
Value Added Services includes international estate and tax planning and wealth services
One of the largest Trust Services outlets in Botswana
Full compliment of commercial services
Gaborone (Tel)
Facing the Challenges of Doing Business in Africa