Business vehicles

There are four forms of companies commonly used by foreign investors:

• Close company, which has a minimum of 1 member and a maximum of 5 members, and an appointed accounting officer. These entities are usually aimed at smaller businesses as companies cannot be members.
• Private company, which has a maximum of 25 shareholders.
• A company limited by guarantee (public or private).
• A public company.

Incorporation

The following steps need to be taken in order to incorporate a company:

• Obtain approval of a company name with the Registrar of Companies.
• Submit a completed application using the prescribed form.
• Obtain the consents of a director, the secretary, the shareholders or members to act in the capacity for which they have been named.
• Apply for any trading licenses that are required.

Law

• Competition Act 17 of 2009.
• Competition Regulations 2011.

The Act is enforced by the Competition Authority and the Competition Commission, based in Gaborone

Consumer Protection is regulated by the Consumer Protection Act, 1998. This Act makes provision for the establishment of institutions responsible for the protection of consumers’ interests in Botswana. It also sets out the manner in which consumers should lodge their complaints, how investigations ought to be conducted and other provisions relating to the institution of legal proceedings against a supplier of goods and services.

Currently Botswana does not have any promulgated data protection laws. However, Botswana’s constitution recognises a right to privacy. Some specific statutes may also contain provisions that directly or indirectly relate to data protection.

Smaller matters are dealt with by the Magistrate’s Courts, Small Claims Courts and Customary Courts, which are all subordinate to the High Court. The High Court is the superior court and has the jurisdiction to determine any criminal and civil case. It has the jurisdiction to hear both appellate matters and matters de novo. The highest and final Court is the Court of Appeal, which is the final arbiter of all legal matters in Botswana.

Governing legislation

Employment Act, 1982 and Trade Disputes Act.

Particulars of employment

A contract must be in writing, signed by both parties and contain certain particulars of employment. If not, it will not be enforceable.

Forms of contracts

Contacts of employment are permitted for unspecified periods of time with probation:

• Not exceeding 3 months in the case of unskilled employees.
• Not exceeding 12 months in the case of skilled employees.
• Where a contract is terminated during a probationary period by either the employer or the employee by not less than 14 days’ notice, the contract is deemed to have terminated with just cause and neither party is required to give any reason therefore.

Corporate income tax is levied on the Botswana source taxable income of all companies, other than tax exempt bodies (i.e. pension funds or charities) and small companies that elect to be treated as partnerships or sole proprietorships.

A company, for income tax purposes, includes any body, corporate and association or society (whether or not incorporated or registered), but excludes a partnership. Foreign sourced dividends and interest are deemed to be from a Botswana source and are taxable on accrual, while business profits are taxable only when remitted to Botswana. Nonresident entities carrying on business in Botswana (e.g. branches of foreign companies) are liable for tax in Botswana on the same basis as resident companies.