Botswana IFSC “Your Competitive
Advantage” for Financial and Business
Services Investments
Contributed by Botswana
IFSC
www.botswanaifsc.com
Established in 2003, the Botswana International
Financial Services Centre (Botswana IFSC) aims
to establish and develop Botswana as a world
class hub for financial and business investments
into Africa and the region.
The Botswana IFSC is one of the key strategies
that the government of Botswana has put in place
to reduce the country’s reliance on mineral
revenues, especially diamonds.
The establishment of the Botswana IFSC is further
aimed at:
- The creation
of sustainable employment opportunities for
suitably qualified citizens
- The enhancement
of the skills base of the Botswana workforce
-Fostering
of innovation and sophistication in financial
and business services
-The enhancement
of Botswana's already excellent reputation in
the international financial and business community.
Positioned in a solid growing economy, the Botswana
IFSC is a transparent, open business location
with high standards of regulation and rigorous
screening and project approval process. To date
the Botswana IFSC has attracted world repute
companies regionally and internationally.
Calling on financial and business services investors
looking to invest in International Business
Companies, Call Centers and Business Process
Outsourcing, Investment Funds, International
Banking and International Insurance, the Botswana
IFSC is “your competitive advantage”
that will propel your business into the rest
of Africa.
Botswana IFSC – Propelling
your business into the rest of Africa
Sustainable
low tax environment
The Botswana IFSC offers a sustainable low tax environment.
Botswana IFSC Companies get a discounted corporate
tax rate of 15% of profits, are exempted from
Withholding Tax on interest, dividends, management
fees and royalties paid to a non resident. They
are further exempted from Value Added Tax, Capital
Gains Tax and disposal of shares for Botswana
IFSC Companies is also tax exempt. These companies
also have access to Botswana¹s 200% tax training rebate.
Tax
|
Botswana IFSC Company
|
Other Companies
|
Capital Gains Tax |
Exempt |
15% |
Withholding Tax |
Exempt |
15% |
Corporate Tax Rate |
15% |
25% |
Value Added Tax |
Zero rated |
10% |
Table 1: Exclusive
Advantages of Botswana IFSC Companies
Access to
an expanding Double Taxation Avoidance Treaty
network
Through the Botswana IFSC, accredited
Companies have access to Botswana¹s expanding
Double Taxation Avoidance Treaty network and
where there is no double taxation agreement
yet in place, Botswana IFSC businesses are provided
with credits for withholding taxes of up to
15% levied in those jurisdictions.
No foreign
exchange controls
Botswana has no foreign exchange control and
this allows Botswana IFSC financial and business
companies to be able to transfer and repatriate
funds across borders easily.
Currency
denomination
As a Botswana IFSC business, you
are allowed to denominate your capital in any
of the internationally recognized currencies
and this measure allows your business to be
cushioned from losses brought about by the exchange
rate risk and exchange rate movements.
Botswana as a world class hub for financial
and business investments into Africa
A combination of the spread of democracy, economic
liberalization, privatization, infrastructure
development, and the growth of consumer services
and financial services positions Botswana as
a strong and economically sound investment destination
of choice.
Botswana’s central geographical positioning
in Southern Africa, provides proximity to key
Southern Africa Development Corporation (SADC)
markets, including South Africa. SADC has an
estimated market of 200 million people and the
headquarters are located in Botswana.
SADC is currently enjoying satisfactory economic growth rates
and provides an attractive opportunity for investors
seeking to invest in emerging sectors such as
mining, aviation leasing, consumer services,
financial services and infrastructure.
Botswana provides to the investor the most suitable
and stable base from which to expand your business
into the rest of Africa.
Political
stability
Botswana is Africa’s most stable democracies. Since 1966,
Botswana has held peaceful elections and the
country is now governed by the fourth president,
who like all his predecessors assumed power
peacefully and democratically. Botswana is Africa’s
model example of peace, law and order.
Economic and
financial development
Botswana is Africa’s fastest growing and performing economy.
From independence in 1966 to date, Botswana
has transformed from one of the poorest nations
in the world to a middle income country. Botswana
has enjoyed solid economic growth and double
digit growth for over a decade.
The country has a thriving domestic financial
sector, which includes banks, insurance companies
and a growing stock market. Further Botswana
enjoys one of sub-Saharan Africa’s highest
per capita GDP.
Botswana has a low country risk perception and
an investment grade credit rating. According
to the 2008 Corruption Perceptions Index, Botswana
ranks 1st and 38th in
the world in terms of transparency.
Legal
and Regulatory
Botswana operates a sound legal and regulatory environment
informed by compliance to international standards
and best practice. Botswana has acceded to international
conventions and is strictly observing internationally
accepted guidelines on combating money laundering
and financial crime.
Botswana is ranked 26th in the world for judicial
independence and 2nd in Africa by
the World Economic Forum. Further as per the
2007/8 World Bank’s Doing Business Report,
Botswana is positioned as one of the world’s
top ten reformers for taking measures to protect
investors and reduce constraints to starting
a business.
The Non Bank Financial
Institutions Regulatory Authority
(NBFIRA) is the regulator of all non-banking
financial entities registered in Botswana including
Pension Funds, Asset Management, Consumer/Micro
lending, insurance and Collective Investment
Undertakings.
NBFIRA safeguards the stability, fairness
and efficiency of the non-banking financial
sector, and ensures that regulation in the Botswana
IFSC is in line with international best practice.
NBFIRA is further aimed at developing a cohesive
marketing and management of the country’s
image to ensure that domestic and international
perceptions are consistent with the current
socio-economic reality and national ambitions.
The regulator
of Banks and banking operations in Botswana is the Bank of
Botswana (BOB) and BOB is committed to monetary
stability, a safe, sound and stable financial
system, an efficient payments mechanism, an
efficient payment mechanism, public confidence
in the national currency, sound international
financial relations and to provide efficient
banking service to clients and provide sound
economic and financial advice to the Government
of Botswana.
The principle objectives of the regulators are
to ensure that investors are protected and that
there is transparency in the management and
operation of Botswana IFSC domiciled companies
Research, Technology
and Communications
The Botswana Government is committed to positioning Botswana
as an economy driven by innovation to attract
investment, grow the economy and promote interaction
between local and international companies.
Botswana has invested
in a world-class multi-service telecommunications
system that facilitates provision of services
remotely. The telecommunications
industry is liberalized with service providers
competing in the market for fixed, mobile, and
internet services. International communications
links Botswana to the rest of the world and
international connectivity is available through
satellite and terrestrial links to the nearest
submarine cable system.
The Government has mobilized funds to provide
high capacity international connectivity through
participating in undersea cables initiatives
off the East and West Coasts of Africa. The
country has also invested in international connectivity
through shareholdings in undersea cables, which
should increase competition and further reduce
the cost of telecommunications in the sub-region.
Through the Botswana
Telecommunications Corporation (BTC), Botswana
is part of the Eastern African Submarine Systems
(EASSy) consortium.
EASSy is a submarine cable system linking Southern,
Eastern and Northern Africa to global submarine
networks. EASSy will enable regional backhaul
to provide terrestrial links for landlocked
countries. Once the system is in place, Botswana
will enjoy lower costs of connectivity, high
speed broadband which is cheaper that the currently
used satellite.
To further position Botswana to compete
effectively in global markets various programmes
and policies on information and communication
technologies have been developed and are being
implemented to drive the diversification of
the economy. These include the Botswana Innovation
Hub which is envisioned to become the leading
African destination for innovative businesses.
The Botswana Innovation Hub positions Botswana
as an attractive location for technology-driven
and knowledge-intensive businesses, to develop
and compete in the global markets. The focus
area is ICT-enabled services, including Call
Centres and Business Process Outsourcing, but
also supporting Knowledge Intensive Business
Services.
Skills availability and development
Botswana views its
people as a major national resource and has
consistently invested a high proportion of its
budget on education and skills training. A pillar
of growth central to the Botswana’s Vision
2016 advocates for an educated and informed
nation to transform Botswana into a knowledge
society by cultivating and celebrating innovation,
talent and creativity. According to the CIA
World Fact book, Botswana’s literacy rate
is at 81%, which is above most of the Africa
region.
The country provides a pool of highly educated,
English speaking labor force in the relevant
financial and business sector services. The
country boosts of higher institutions of earning
including the University of Botswana (UB), The
Botswana Accountancy College (BAC) and The Botswana
International University of Science and Technology
(BIUST.
The University of Botswana (UB) has positioned itself as
one of the best Universities in Africa and provides
a wide range of high quality programmes including
Business, Accounting, ICT, Law and Finance.
The graduates are highly competitive as they
are absorbed in to international companies
as well as both public and private sector to
further boost the countries’ competitiveness.
Botswana Accountancy College (BAC) provides
the highest quality UK accredited business education
in Accountancy, Computing, Business Management
and Insurance. The Botswana IFSC in conjunction
with the BAC and the Ministry of Education facilitated
the introduction of the course BTEC, a UK Edexcel
accredited BPO and Call Centre Course to support
the BPO and Call Center industry hence creating
a credible offering to investors.
Botswana is at an advanced stage of developing
through a Public Private Partnership an international
university of science and technology to advance
discovery and learning in science and technology
with an international perspective. The Botswana
International University of Science and Technology
(BIUST) is expected to advance the ICT skills
base in the country.
Living and working in Botswana
Botswana is Africa’s sparkling model economy, a land
of opportunities, a peace loving nation driven
by “Botho” a Setswana term synonymous
to humanity, kindheartedness, compassion, empathy
and benevolence.
Our law enforcement agencies are effective in
fighting crime, and we have a good public health
system boosting of a chain of hospitals, clinics
and private medical practitioners and emergency
rescue services in all major towns. The education
system is well developed and offers both private
and public education from pre-school, primary,
secondary to A-level training aligned to world
standards.
Living conditions in Botswana are comparable to some of the
leading economies in Africa. Gaborone, Botswana’s
capital city is a fast developing city with
an up market suburb, internationally comparable
golf centers, word repute hotels and resorts,
an international airport, shopping malls and
cinemas.
Botswana’s proximity to Johannesburg, South Africa makes
it easily accessible and convenient for travel.
It takes less than an hour by flight from Johannesburg
to Gaborone, the capital city of Botswana with
three airlines competing on the route. At the
same time an open skies policy is expected to
result in direct flights from Europe and elsewhere
to Gaborone.
Botswana is endowed with natural resources and wildlife, and
it is a great tourist destination that holds
highly it traditions, historical monuments and
natural heritage including the world acclaimed,
Tsodilo Hills. It is the home to some of Africa’s
last great wilderness and the enchanting Okavango
Swamps with its game reserves and the famous
Kalahari Desert.
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