Botswana is located in the Southern part of the African continent. It is officially known as the Republic of Botswana and is bordered by South Africa to the South and Southeast, Namibia in the West and North and Zimbabwe in the Northeast. Let discuss how to register a limited liability company in Botswana as foreigner?
It has a relatively small population of 2.35 million people (2017 figures). The country’s economy is dominated by mining, cattle and tourism
The country has quite a good rating on the ease of doing business report by the World Bank. It was reported at 71 out of 190 countries in 2017.
Types of companies
There are various types of company that can be incorporated in the country.
|Sole proprietor||You can incorporate a sole proprietorship company in Botswana. This type of company is normally owned and managed by a single person.|
|Partnership||There are basically 2 types of partnerships which are the general partnership and the limited partnership. For both partnership companies, there must be a minimum of 2 shareholders.|
|How to register a limited liability company in Botswana and public limited (LLC by shares) ?||For a private company, there must be at least 1 resident director while for a public company there must be at least 2 resident directors. The registered office of these types of companies must be in Botswana. Auditors are also required for these companies and they must be certified public accountants and practicing in Botswana.|
|Close company||For this type of company there are no directors or shareholders. There are only members who also have limited liability.|
|Company limited by guarantee||Members for this type of company must agree to pay a certain amount in the event the company goes bust. This type of company is mainly used for non-profit making companies.|
|Branch Office||A branch office may be 100% foreign owned. This type of company is allowed to conduct business in the country which is related to the parent company. However there must be at least 1 director and 1 shareholder.|
How to register a company in Botswana
- Reserve a company name – How to register a company in Botswana if the share holders are foreigner? The applicant company must register with the Companies and Intellectual Property Authority and propose 3 company names. The name search can be done online with the database at the Ministry of Trade and Industry. The applicant must submit a form to the Registrar of Companies and should receive a reply within 3 days. Once approved, the company name will be reserved for 30 days. The cost for this process is Botswana Pula (BWP) 20.
- The company representative must sign the declaration of compliance of statutory requirement for incorporation before a Commissioner of Oaths. The applicant must submit the company registration form together with a consent to act as shareholders, directors, auditors, company secretary and registered officers together with their national ID or passports. They must also submit the declaration of compliance with the company secretary’s practicing licence.
- Register the company with the Registrar of Companies, Ministry of Trade and Industry – The company must submit the duly completed form with the name reservation certificate and declaration of compliance. This takes 6 to 8 days and cost BWP 300 to register a company and BWP 60 fir the certificate of incorporation.
- The company’s premise will be inspected by the relevant authorities – This inspection is done by the Industrial Affairs Department, Ministry of Trade and Industry (MTI). It must also be inspected by the Health Department, Environment Department and the Town Planning Department to ensure the minimum standards are complied with. This takes about 7 days.
- Obtain an Industrial Licence from the Industrial Affairs Department, MTI or obtain a trade licence from the City Council. This takes quite a long time of 3 weeks but is done simultaneously with the inspection. The cost for the licences are BWP 50 for an industrial licence if it’s self-applied and BWP 1500 if by an agent. As for a trade licence, the cost is BWP 100 if self-applied and BWP 2,000 if done by an agent.
- Open a bank account – This takes about 1 day. The bank account must be opened to get a Tax Identification number.
- Get a Tax Identification number from the Botswana Revenue Service. The company must also complete a taxpayer registration form to enroll their employees in the Pay-As-You-Earn withholding tax. This also takes about 7 days.
- The company must then register for Value Added Tax with the Department of Customs and Excise. This normally takes 7 days.
- The company must also register its employees for the workplace injury insurance. This can be done with any insurance company and takes 2 days.
Overall the business climate in Botswana is relatively good as evidenced by the quite high ranking in the Ease of Doing Business report by the World Bank. The Botswana government also tries to attract more foreign investments with the low tax rate.