Botswana: Investing

FDI in Figures

In the last recent years FDI in-flows were in constant increase; however, they petered out due to the global economic crisis, but they are expected to revive again with the economic recovery.

Botswana has committed itself to a process of diversifying its economy away from mineral resources and encourages FDI. The reduced level of corruption, good economic governance, a liberal taxation system and a stable democracy are the country’s strengths. The country also benefits from highly favorable comments from rating agencies. The main hindrances to investments are the high costs of production, the lack of qualified workforce and the landlocked geographical position of the country. It's important to note that the main diamond extracting company, Debswana, jointly owned with the government and the British firm De Beers, have planned to transfer their sorting and business operations from London to the capital of Botswana, which will insure new investments.

The mining sector attracts most of the FDI. However, investments in services (insurance and banking) are booming. FDI mainly comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada and Zimbabwe.

Country Comparison For the Protection of Investors

	Botswana	Sub-Saharan Africa	United States	Germany
Index of Transaction Transparency*	7.0	4.8	7.0	5.0
Index of Manager’s Responsibility**	8.0	3.4	9.0	5.0
Index of Shareholders’ Power***	3.0	5.0	9.0	5.0
Index of Investor Protection****	6.0	4.4	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	521	579	529
FDI Stock (million USD)	884.6	1,405.3	1,298.6
Performance Index*, Ranking on 141 Economies	68	78	-
Potential Index**, Ranking on 141 Economies	88	-	-
Number of Greenfield Investments***	17.0	13.0	-
FDI Inwards (in % of GFCF****)	16.7	36.0	-
FDI Stock (in % of GDP)	6.6	8.4	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

VAT: 10%
Company Tax: A basic company tax of 15%, or a special tax rate of 5% for manufacturing and for companies in Botswana International Finance Services Centre.
Withholding Taxes: Dividends: 15%, Interest: 15%, Royalties: 15%
Bilateral Agreement: Botswana and Lebanon are not bound by a Double Taxation Agreement.
Social Security Contributions Paid By Employers: 0%

Country Comparison For Corporate Taxation

	Botswana	Sub-Saharan Africa	United States	Germany
Number of Payments of Taxes per Year	19.0	37.3	11.0	16.0
Time Taken For Administrative Formalities (Hours)	152.0	315.1	187.0	215.0
Total Share of Taxes (% of Profit)	19.5	68.0	46.8	48.2

Source: Doing Business - Last Available Data.

Investment Opportunities

Tenders, Projects and Public Procurement: Tradeinvest Africa, Tenders in Africa
African Tenders
African Development Bank Group, Public Oversight Body
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Botswana.
Useful Resources: Botswana Export Development and Investment Authority (BEDIA)
Economic Developments and Prospects in Botswana - African Economic Outlook

Business Setup Procedures

Setting Up a Company	Botswana	Sub-Saharan Africa
Procedures (number)	10.00	8.90
Time (days)	61.00	45.20

Source: Doing Business.

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