Namibia's Financial Environment

Namibia has a well-established banking system, which is controlled by legislation and by state agencies working through the Bank of Namibia. The Banking Institutions Act passed into law in 1998 provides the legal framework for banking operations in Namibia and is designed to ensure international acceptability. To deepen the range of financial services in Namibia, an Offshore Banking Act as well as legislations governing the conduct of other offshore financial services has been put in place. As a member of the Rand Common Monetary Area (CMA), however, Namibia continues to be subjected to CMA foreign exchange regulations as are South Africa, Lesotho and Swaziland.

Commercial Banks

Commercial banks in Namibia operate through a nationwide network of branches and offer a comprehensive range of banking services, including current account and overdraft facilities, term deposits, discounting of bills, foreign exchange and a variety of loan products. General banking facilities such as hire purchase and leasing packages are also available and most of the commercial banks are capable of providing specialised merchant banking facilities. Branches of banks can be found in most towns in Namibia with agencies in the smaller centres. International services are available through interbank arrangements while electronic banking and teller services are available in all major centres.

Four commercial banks operate in Namibia, these are:  

Bank Windhoek Ltd.	Monday – Friday:  Saturday:	09H00-15h30  08h00-12h30
Nedbank of Namibia Ltd.	Monday – Friday:  Saturday:	09H00-15h30  08h00-12h30
First National Bank of Namibia	Monday – Friday:  Saturday:	09H00-15h30  08h00-12h30
Standard Bank Namibia Ltd	Monday – Friday:  Saturday:	09H00-15h30  08h00-12h30

Note: All banks are closed on Sundays and public holidays.

The banks are connected to major international communication networks, ensuring fast and efficient transfers of funds to and from other centres in the world.

The Agribank of Namibia assists the domestic agriculture sector in the country, while the Development Bank of Namibia assists small and medium size business enterprises.

The Namibian Stock Exchange 

The Namibian Stock Exchange (NSE) commenced operations in October 1992 and is the second biggest in SADC in terms of total market capitalisation.

Computerised screen trading was adopted from its inception, and the Namibian Stock Exchange was the first exchange in the Southern African Development Community (SADC) to take up the Johannesburg Stock Exchange's offer to make use of its electronic trading system (JET

system) in November 1998. The link-up should be seen in the context of plans by the stock exchanges of the SADC region to establish closer links and achieve greater integration by linking the region's autonomous stock exchanges.

Repatriation of Capital

The local sale or redemption proceeds on non-resident owned assets in Namibia may be regarded as freely remittable or be used freely by non-residents for investment purposes within the CMA.

Corporate Tax Rate Reduction and Reform Timeline

As previously communicated, the non-mining company tax rate will undergo a series of reductions and reforms aimed at enhancing competitiveness and aligning with global corporate tax trends. The timeline for these changes is as follows:

Reduction to 31%: Effective January 1, 2024, the non-mining company tax rate will be reduced to 31%.

Further Reduction to 30%: Beginning January 1, 2025, the non-mining company tax rate will be further reduced to 30%.

Additional Reduction to 28%: By FY2026/27, the non-mining company tax rate will be decreased to 28%. This reduction will be accompanied by the following reforms to maintain tax neutrality:

• Replacing the 3:1 thin capitalization ratio with a 30% limit on interest deductions.
• Capping assessed losses carried forward at 5 years for normal companies and 10 years for companies operating in the natural resources sectors.
• Introducing a 10% dividend tax effective January 1, 2026, to address the existing disparity in the investment arena where dividends paid to non-resident shareholders are subject to tax.

These measures aim to foster a more competitive tax environment while ensuring fairness and neutrality in the corporate tax system.

SPECIAL ECONOMIC ZONES (SEZ) REGIME

In collaboration with the Ministry of Industrialisation and Trade, we are pleased to announce the forthcoming introduction of a Special Economic Zones (SEZ) regime. This initiative serves as a cornerstone in our endeavor to cultivate competitive industrial zones.

Key features of the SEZ regime include:

Corporate Income Tax Rate:

Participants in the SEZ will be subject to a favorable corporate income tax rate of 20 percent, aimed at fostering investment and economic growth within the zones. Capital Allowances: Normal deductions in terms of capital allowances will apply within the SEZ regime, providing incentives for capital investment and development. VAT Zero Rating: Value Added Tax (VAT) will be zero-rated within the SEZ, facilitating trade and enhancing competitiveness.

Legislative Process:

The SEZ bill is expected to be tabled in the National Assembly during the fiscal year 2024/25, strategically preceding the expiration of the Export Processing Zone (EPZ) regime in 2025. Stay tuned for further updates on this transformative initiative, as we continue to pave the way for sustainable economic development and investment opportunities in Namibia.

Other Benefits of Liberalisation

• Freedom of movement for capital transactions of non-residents.
• Free repatriation of income/dividends earned on such investments.
• Institutional investors, i.e., pension funds, insurance companies and unit trusts may engage in asset swap transactions.
• Corporations may invest directly abroad.

Virtually all quantitative limits on current account transactions in line with Article VIII of the IMF have been abolished.