Namibia is often described as Africa’s optimist and with good reason!
Not only does it enjoy one of the continent’s most pleasant, peaceful and politically stable environments but also an infrastructure to rival many developed countries. The country has developed an excellent reputation as an all-round investment location. In particular, the excellent infrastructures, availability of finance, bureaucratic ease, flexible rules of licensing and access to foreign exchange earned Namibia high ratings in Southern African countries. Namibia has a very progressive attitude toward foreign investment and there are few restrictions on it. The core of their policies is in the Foreign Investment Act established in 1990 which stipulates equal treatment of foreign and local investors. Namibia’s Foreign Investment Act of 1990 provides investors with guarantees in respect of investment security, repatriation of capital, access to foreign currency and international arbitration in case of dispute.
Foreigners who wish to purchase or set up their new business in Namibia and operate while living in Namibia must apply for an investor visa, which is basically a work permit as a business owner. The work permit is issued for 2 years but investors are now able to apply for a longer permit of up to 5 years as part of the application process. Once the investor has resided in Namibia for a minimum of five years they can apply for permanent residence depending on the type of Investment. Investor’s can apply for Permanent Residence immediately after obtaining the relevant work permit. To give you an example, it is indicated to us that an investment amount higher than 10 million NAD would be considered to be sufficient. Thus, if you have invested in Namibia in excess of this threshold and your funds came from outside Namibia and can therefore be counted as foreign direct investment, you can apply for permanent residence as soon as your business is in full operation.
The process of applying for a work permit is a multi-step process whereby one is required to obtain permissions and registrations to be able to make the Investment. The first process is to establish an appropriate company structure, there are no ownership constraints for foreign shareholding in a Namibian Company. There are two type of company structure in Namibia, a PTY and Close Corporation and they are both Legal entities. Close corporations are often the type of company chosen by small business owners, and they have members of up to a maximum of 10 people. The number of employees, however is not limited. Private Companies (Pty) consist of directors and shareholders (up to 50 shareholders), companies can also qualify as shareholders. The shareholders own the company and appoint directors (which may be shareholders) to run it for them. There cannot be more than 50 shareholders and shares may not be offered to the general public. The good news is that IBN Namibia have an in-house business registration department and we are able to help Investor’s register and set up their business in Namibia. Different Registration packages are available upon request.
The process of applying for a work permit works in different stages and can be a lengthy and complex procedure, it includes but not limited to providing proof of investment, training and development plan for employees as well as an evaluation process within the Ministry of Trade and Industry under the Investment Centre.
The Investment Centre often referred to as NIC is Namibia’s official investment promotion and facilitation office. Established in 1990, the Centre focuses on promotion of foreign and domestic investment and provides a service to all investors from the inquiry to the operational stage. It is the first point of call for potential investors, providing general information packages and tailor-made advice on the investment opportunities, incentives, and procedures. It facilitates interaction between Government and the private sectors and assists investors in minimizing bureaucratic obstacles, working closely with key productive sector ministries, as well as service and regulatory bodies. The Centre also facilitates in investment-related procedures, in particular work and residence permits, customs assistance, incentives and other approvals.
They offer investor services such as the application of work permits, assistance with search and identification of land/premises and more. They also conduct research on investment climate and trends, sector studies, profile and market investment projects and present such information to interested investors. The NIC will evaluate business proposals and once they are satisfied that the investor has invested (or intends to invests) a sufficient capital sum in Namibia, they will then issue an Investor with a Certificate of Status Investment. We have experienced that once an Investor is issued with a Namibian Certificate of Status Investment, he/she will normally also have less difficulty in obtaining the relevant work permits. Important items among others that the NIC look at are as follows:
- Goods/Services to be produced
- Reports on profits forecasts/, cash-flow projections, projected income statements and balance sheets.
- Funding of the Business
- Employees and training of Namibians.
The current requirements are as follow: A minimum investment of 2 million NAD, business plan outlining the proposed activities or services to be undertaken in Namibia, ideally a transfer of skills plan for Namibian employees as well qualifications in line with the business you are looking at investing in. Depending on the sector, there may be registrations with professional bodies as well, i.e. Namibia Tourism Board for Tourism/Hospitality entities.
The above minimum investment amount is not absolute, it can be reduced, depending on the sector the foreign is looking to invest in and the current processing times for work permit is between 4 and 5 months
There are currently 6 top sectors as listed below:
- Affordable Housing
- Renewable and Clean energy
- Logistics and Infrastructure
For foreign investors interested in this virgin territory and the opportunity to overcome restrictive barriers into the EU and American markets, as well as operating in almost absolute industrial calm, Namibia is definitely the place to be.
Above are just general guidelines, however each case is different.
Don’t hesitate to contact us and set up a consultation to explore your options in more depth while offering you tailored solutions to all your immigration needs for Namibia.
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By Uaaruka Kandjii