A hybrid legal system having elements of both common law system and civil law. Roman-Dutch law forms the basis of most of Namibia’s uncodified law.
President Dr. Hage G. GEINGOB (since 21 March 2015)
Meatpacking, fish processing, dairy products, pasta, beverages; mining (diamonds, lead, zinc, tin, tungsten, uranium, copper, gold), agriculture and tourism
Official language: English
Recognised national languages: Oshiwambo languages 48.9%, Nama/Damara 11.3%, Afrikaans 10.4% (common language of most of the population and about 60% of the white population), Otjiherero languages 8.6%, Kavango languages 8.5%, Caprivi languages 4.8%) 3.4%, other African languages 2.3%, other 1.7%
Christian 80% to 90% (at least 50% Lutheran), indigenous beliefs 10% to 20%
- Capital markets
Requirements for the listing of securities on the Namibian Stock Exchange are issued by the Namibian Stock Exchange Board from time to time.
The basic listing requirements of the Namibian Stock Exchange are summarised as follows:
- share capital amounting to a minimum of N$1 million;
- a minimum of 1 million shares must be issued;
- a profitable trading record of three years and a current audited profit before tax of at least N$500,000 (companies which do not comply with this requirement may list on the Development Capital Board);
- an acceptable record in its field of business and adequate management to maintain business;
- satisfactory evidence must be supplied in order to prove that the management as a whole presides over the required expertise.
The company must not have qualified their auditor's report for the preceding three years. Other criteria such as the vulnerability of a company to specific factors or events will be taken in to consideration. The Namibian Stock Exchange has also established a Development Capital Board for listings of companies that do not comply with some or all of the above criteria. The purpose of this is to facilitate listings of new ventures or businesses that do not have an adequate track record. Such companies are required to have a fully researched project and at least 10% of the capital raised must be provided by management.
Companies Act 28 of 2004
Stock Exchanges Control Act 1 of 1985
Namibia does not have takeover/merger regulations. However, please see Competition Regulations.
Corporate Governance Code
NamCode (based on King III) (King III is applied by listed companies)
Public Offers/Disclosure Regulations
As per the provisions of the Companies Act.
Namibian Stock Exchange
Regulatory body or bodies
Namibian Stock Exchange
Current number of listed companies
- Competition regulation
The Competition Act 2 of 2003 (the Competition Act), which came into force on 3 March 2008, is aimed at enhancing the promotion and safeguarding of competition in Namibia in order to:
- promote the efficiency, adaptability and development of the Namibian economy;
- provide consumers with competitive prices and product choices;
- promote employment and advance the social and economic welfare of Namibians;
- expand opportunities for Namibian participation in world markets while recognising the role of foreign competition in Namibia;
- ensure that small undertakings have an equitable opportunity to participate in the Namibian economy; and
- promote a greater spread of ownership, in particular to increase ownership stakes of historically disadvantaged persons.
The Competition Act applies to all economic activity within Namibia or having an effect in Namibia, except:
- collective bargaining activities or collective agreements negotiated or concluded in terms of the Labour Act 11 of 2007;
- concerted conduct designed to achieve a non-commercial socio-economic objective; and
- in relation to goods or services which the Minister of Trade and Industry, with the concurrence of the Namibia Competition Commission declares by notice in the Government Gazette, to be exempt from the provisions of the Act.
The Namibian Competition Commission is assigned with a number of power, duties and responsibilities under the Act, including:
- to administer and enforce the Competition Act;
- to inform the public of the provisions of the Competition Act and the functions of the Commission;
- to interact with similar authorities of other countries to exchange information, knowledge and expertise;
- to advise the Minister on matters referred to the Commission by the Minister and to conduct research on matters as requested by the Minister;
- to implement measures aimed at increasing market transparency; and
- to investigate any contraventions or potential contraventions of the provisions of the Competition Act.
Impact of the regulatory regime on business
The Competition Act prohibits restrictive business practices and the abuse of a dominant position in a market in Namibia, or a part of Namibia. The Competition Act further prohibits the implementation of a proposed merger, unless such merger has been approved by the Namibian Competition Commission and in accordance with any conditions attached to such approval as imposed by the Commission, if any.
Competition in Namibia is regulated by the Competition Act 2 of 2003, which safeguards and promotes competition in the Namibian market. It establishes and regulates the Namibian Competition Commission.
Rules of the Namibia Competition Commission (Government Notice 41 in Government Gazette 4004 of 3 March 2008)
- Corruption / transparency
Signatories to United Nations Convention Against Corruption?
Signatories to the African Union Convention on Preventing and Combating Corruption?
Corruption Perception Index rank worldwide for 2017
Corruption Perception Index score for 2017
Signatories to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?
Enforcement of foreign judgments
Namibia's Enforcement of Foreign Civil Judgments Act 28 of 1994, provides that civil judgements granted in designated countries may be enforced in magistrates' courts in Namibia. The aforesaid Act only applies to a final judgment or order for the payment of money in a country with which Namibia has entered into an agreement providing for the reciprocal enforcement of foreign civil judgments and which country is designated by the Minister of Justice.
Only the Republic of South Africa has been declared as a designated country (see Government Notice 112 in Government Gazette 1095 of June 1995). Hence, no foreign judgments (save for South African judgments) are directly enforceable in Namibia. A foreign judgment granted outside Namibia, in any country which is not declared a designated country, by a court of competent jurisdiction (i.e. countries other than South Africa) is not directly enforceable, but does constitute a cause of action.
The High Court of Namibia will enforce such cause of action provided that:
- the court which pronounced judgment had jurisdiction to entertain the matter according to principles recognised by Namibian law with reference to jurisdiction of foreign courts ("international jurisdiction/ competence");
- judgment is final and conclusive in its effect and has not become superannuated;
- recognition and enforcement of judgment by the Namibian High Court is not contrary to public policy;
- judgment is not obtained by fraudulent means; and
- judgment is not for the enforcement of penal or revenue law of the foreign State.
Apart from this, a Namibian Court will not venture into merits of case adjudicated by a foreign court and will not attempt to review or set aside its findings of fact or law.
Enforcement of arbitral awards
Namibia is not a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, nor to any bi-lateral agreements by which an arbitration award made in England and Wales would be directly enforceable in Namibia. However, although the Ministry of Foreign Affairs lists Namibia as a party to the Convention, Namibia is not listed as a State Party on the web and the accession to the aforesaid Convention is not located in Parliament records.
Although there is some case law which suggests foreign arbitration awards can be enforced by a Namibian Court, this position is by no means certain. An arbitration award that is made an order of Court by a South African Court, could be enforced directly in Namibia by virtue of and in terms of the Enforcement of Foreign Civil Judgments Act.
It is not entirely certain whether, as in the case of foreign judgments discussed above, an arbitration award made in any country other than South Africa can be enforced in Namibia by way of application to the High Court. In the absence of statutory regulation, the question whether a foreign arbitration award can be enforced in Namibia is therefore regulated by common law. There is, in our view, authority (although not in the form of a conclusive judgment directly on this point), accepting that in common law, a foreign arbitral award can be enforced within Namibia, and that the central requirement is that there must have been international jurisdiction or competence, in terms of Namibian International Private Law, of the arbitration tribunal which will be constituted by a valid submission to the arbitration.
Judicial power is vested in the courts of Namibia, which consists of:
- a Supreme Court of Namibia (Supreme Court Act 15 of 1990), which has the jurisdiction to hear and adjudicate upon appeals emanating from the High Court involving the interpretation, implementation and upholding of the Constitution and the fundamental rights and freedoms guaranteed thereunder;
- a High Court of Namibia (High Court Act 16 of 1990), which court has original jurisdiction to hear and adjudicate upon all civil disputes and criminal prosecutions, including cases which involve the interpretation, implementation and upholding of the Constitution and the fundamental rights and freedoms guaranteed thereunder; and
- also acts as the court of appeal in cases emanating from lower courts (Magistrates' Courts Act 32 of 1944; Community Courts Act 10 of 2003), which are established by Acts of Parliament and have such jurisdiction as prescribed by such act and regulations made thereunder.
The bulk of the judiciary's work takes place in the lower courts and special courts, the most important of which for the prospective investor being the Income Tax Court (established in terms of the Income Tax 24 of 1981), and the Lands Tribunal (established in terms of the Agricultural (Commercial) Land Reform Act 6 of 1992).
The Arbitration Act 42 of 1965 provides for the settlement of disputes by arbitration. Arbitration is also conducted in accordance with agreements between relevant parties.
- Foreign investments
Foreign investor rules
Foreign investments are regulated by: the Foreign Investment Act 27 of 1990; and a number of regulations from the Bank of Namibia. The Foreign Investment Act contains provisions to encourage foreign investments and allows foreign nationals to invest and engage in any business activity which can be undertaken by a Namibian, subject to some restrictions.
The Act further provides for, amongst other things, liberal foreign investment conditions, equal treatment of foreign and local investors, openness of all sectors of the economy to foreign investment, and no local participation requirements.
The Act also established the Foreign Investment Centre (within the Ministry of Trade and Industry) which is aimed at facilitating the promotion and administration of foreign investments. Potential investors should regard the Investment Centre as their first point of contact. A foreign national may not purchase agricultural property without the permission of the Minister of Lands, Resettlement and Rehabilitation.
Namibia is a member of:
- The Southern African Development Community, Africa's largest trade and co-operation pact;
- The Southern African Customs Union, whose members enjoy dutyee trade; and
- The Common Monetary Area, which establishes the Rand as a common monetary unit in the member countries.
Foreign investment incentives
General incentives to investors include tax incentives and manufacturing incentives. There are a number of incentives in areas recognised as Export Processing Zones (Export Processing Zones Act 9 of 1995), including (among others):
- withholding taxes;
- no foreign exchange control; and
- prohibition on strikes and lockouts.
In addition, the Foreign Investment Act provides for equal treatment of foreign and local investors and opens all sectors of the economy to foreign investors.
Foreign Investments Protection
The general regime regarding protection of foreign investment is outlined in the Foreign Investment Act and the Constitution. The Foreign Investment Act further specificially provides that a foreign national investing in Namibia shall be in no different position than any Namibian unless so stipulated by the Act.
The Foreign Investment Act provides that no enterprise, or part of an undertaking carried on by an enterprise, or interest in or right over any property forming part of such undertaking, shall be expropriated, except in accordance with the provisions of Article 16(2) of the Constitution, which provides that the state may expropriate property in the public interest subject to the payment of just compensation, in accordance with requirements and procedures to be determined by an Act of Parliament.
The Namibian Investment Promotion Act, 9 of 2016 (as amended) ("NIPA") was promulgated on 31 August 2016, however, NIPA will only become effective after the Namibian Minister of Industrialisation, Trade and SME Development has issued regulations and determines that NIPA shall commence. The Foreign Investment Act would be repealed by the NIPA if and when the NIPA commences. There are no indications as to when this is expected to occur. NIPA seeks to inter alia provide a clear and transparent framework for investment in Namibia, establish the Namibia Investment Centre, the statutory body responsible for implementing the NIPA, promote foreign investment in Namibia and keep a register of Namibians and investors and their investments in accordance with the prescribed requirements. In addition, investors seeking to invest in Namibia, or that have invested in Namibia, must notify the relevant Minister of any changes in ownership or transfers of any license, permit, authorisation or concession owned by the investor or the applicable investment vehicle.
The Tobacco Products Control Act 1 of 2010 which entered into force on 01 April 2014 together with the Tobacco Products Control Regulations (Government Notice 209 in Government Gazette 4831 of 14 November 2011) contain extensive provisions relating to advertising of tobacco products.
Section 24 of the Medicine and Related Substances and Control Act 13 of 2003 prohibits the advertising for sale of medicine or a scheduled substance, save for schedule 1 medicine.
Foreign investment incentives
General incentives to investors include tax incentives and manufacturing incentives. There are a number of incentives in areas recognised as Export Processing Zones (Export Processing Zones Act 9 of 1995), including (among others): no export processing zone management company and no export processing zone enterprise shall be liable for income tax in respect of income derived in an export processing zone. No transfer duty is payable on the transfer, hypothecation or lease of any moveable or immoveable property in or situate in an export processing zone, and no employer or employee may take action by way of, or participate in, a lock-out or strike in an export processing zone. In addition, the Foreign Investment Act provides for equal treatment of foreign and local investors and opens all sectors of the economoy to foreign investors.
Transfer pricing rules
The Income Tax Act of 1981 requires an arm's length consideration to be charged for cross-border goods or services transactions between connected persons. Transfer pricing applies to all cross-border transactions entered into between a resident and a non-resident (section 95A, Income Tax Act 24 of 1981, as amended). Transactions between cross-border related parties must take place at arm's-length prices. Otherwise, the rules of transfer pricing apply.
20% - The 20% deduction applies in the year the building was taken into use. Subsequently, the balance reduces by 4% per annum for the next 20 years. If the buildings are used for manufacturing processes, then the allowance is 8% of the balance.
34% - Applies to both resident and non-resident companies. It is a direct tax on all receipts and accruals from a Namibian source. Interest deductions are allowable for the purpose of ascertaining income.
Double taxation treaties
Namibia has double taxation treaties with the following countries: Botswana; France; Germany; India; Malaysia; Mauritius; Romania; Russian Federation; South Africa; Sweden; and the United Kingdom.
Personal income tax
0% - 37% dependent on income band. The income of a non-resident which derives from Namibia is taxed in the same manner as that of a resident. Pay As You Earn (PAYE) is the method of collection.
12% non-natural persons - levied on the transfer of property. In determining value, VAT is excluded. 0% - 8% natural persons - based on value of the property transferred.
Branch profits tax
34% - Where a foreign company doing business in Namibia repatriates its branch profit. Such profits would not attract Non-resident shareholders tax (NRST) as no dividend would be declared but, when the foreign branch declares dividends withholding tax known as Non-resident shareholders tax (NRST) will be payable on those dividends declared when they relate to profits in Namibia. Double taxation relief may apply in some instances.
Capital Allowances are available on plant and machinery. Tax relief is allowed on the cost of assets used in the trade and can be claimed over a 3 year period.
Losses and profits generated by a taxpayer may be set off against each other. A net loss may be carried forward to utilise in future tax years.
Export Processing Zones
EPZ status confers certain tax exemptions including an exemption from income tax in respect of income derived in an export processing zone. No transfer duty is payable on the transfer, hypothecation or lease of any moveable or immoveable property in or situate in an export processing zone, stamp duty is exempt with regard to, among other, the transfer, hypothecation or lease of any movable or immovable property in or situate in an export processing zone, or relating to any act to be performed or done in such export processing zone, or any document or instrument relating to any activity, operation, or venture in an export processing zone, and no Value-Added Tax is payable with regard to a taxable supply of goods or services within an export processing zone by an export processing zone enterprise of a person or an export processing zone management company to the extent prescribed by the Minister by regulation. A supply of goods or services to an export processing zone enterprise of a person or an export processing zone management company for use by the enterprise or company in an export processing zone, are regarded as zero-rated for VAT.
0.2% - Applies to the issue and transfer of shares. Various - Levied on a wide range of instruments and documents and immovable property.
Foreign-held Namibian companies are required to be adequately capitalised. Interest charged on excessive debt is not tax deductable.
Prior exchange control approval is required by Namibian companies to accept loans from their non-resident shareholders, and to effect repayment to non-resident shareholders of such loans. This foreign exchange control regulation further requires that the total sum of loans advanced by non-resident shareholders may not exceed three times the amount of the Namibian companies total share capital. i.e. A ratio of 3 : 1 must be adhered to.
Exempt in the hands of residents, 10% applies to local and foreign dividends, withholding tax applied to non-residents.
5% - Levied on persons for the extraction of natural resources. Can be varied by the Minister of Minerals and Energy.
Foreign tax relief
Foreign tax credits are available to relieve foreign tax paid in respect of dividends, royalties or loans.
A company in Namibia that distributes to a non-resident person any dividend, non-resident shareholder’s tax (NRST) must be deducted and paid from such dividend at the rate of 10% if the beneficial owner is a company which holds directly or indirectly at least 25% of the capital of the company paying the dividends, or 20% in all other cases, subject to the provisions of any double taxation agreements that may apply.
There is payable a withholding tax on interest equal to 10% of any amount of any interest that is paid by any person or company to or for the benefit of any non-resident person.
Subject to the provisions of double taxation agreements, all Namibian residents who are liable to pay a non-resident for management, consulting, technical, or entertainment services, or director/s fees must withhold 10% tax on the amount payable to such non-resident for management and consulting services, and 25% in respect of director’s fee and entertainment fees.
Withholding taxes are also payable in respect of Royalties.
Capital Gains Tax
There is no capital gains tax or marketable securities tax in Namibia.
Various allowances are available.
Value Added Tax
15% standard rate
Mining (other than diamonds or petroleum)
Moveable assets used for trade purposes
35% (plus Additional Profits Tax determined according to a formula)