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1. Are there restrictions on foreign entities holding interests in land, and if so, how are they expressed?
Yes, but only in respect of agricultural land. In Namibia, foreign ownership of agricultural land is restricted under the Agricultural (Commercial) Land Reform Act 6 of 1995 (ACLR). Under the ACLR, no foreign national may, without the prior written consent of the Minister, acquire agricultural land in Namibia.
Furthermore, whenever the controlling interest in a company or close corporation which owns agricultural land is passed to a foreign national, it is deemed that the foreign national acquired the land.
The ACLR goes further and states that no person may acquire and hold, as a nominee owner, on behalf or in the interest of any foreign national any agricultural land without the Minister's written consent.
"Foreign national" is defined in the Act as a person who is not a Namibian citizen, a company incorporated in any place other than Namibia, a company incorporated in Namibia but controlled by foreigners, or a close corporation controlled by foreigners.
There are no restrictions in respect of land not classified as agricultural.
2. Are there any conditions placed on the hiring of a foreign worker (e.g. local minimum quotas which must first be met)?
In general, there are no restrictions on employing foreigners, provided they possess the necessary work permit or visa or other authorisation allowing them to be employed in Namibia. There are, however, certain exceptions. For example, under the Minerals (Prospecting and Mining) Act 33 of 1992 and the Petroleum (Exploration and Production) Act 2 of 1991, it is a standard term of any mineral or petroleum licence that, as far as employment is concerned, preference be given to Namibians. Furthermore, under the Affirmative Action (Employment) Act 29 of 1998, where two or more suitably qualified candidates from designated groups (racially disadvantaged persons, women and persons with disabilities) qualify for a position of employment, a relevant employer must give priority to a candidate who is a Namibian citizen, or, if all such candidates are Namibian citizens, to the candidate who belongs to more than one designated group. A relevant employer must also train a Namibian citizen as the understudy of every non-Namibian citizen employed by him.
3. What are the restrictions on redundancies and any applicable compensation?
Collective terminations and redundancies are dealt with under section 34 of the Labour Act 11 of 2007. This section sets out the grounds for and procedure to be followed in event of a dismissal arising from collective termination or redundancy.
The employer who intends to institute redundancy or collective dismissal procedures on one of the prescribed grounds must notify the Labour Commissioner and any recognised trade union (or workplace representative) of the intended dismissal.
The notification should be in writing. The notification must be given at least 30 days before the intended date of termination. A shorter period is allowed, provided the employer proves that a 30-day period is not practical. The notification must set out that a dismissal is intended in terms of section 34; the reasons for the reduction in workforce; the number and categories of affected employees; and the date of the intended dismissal.
Secondly, the employer and the employees' representative (either the recognised trade union or the workplace representative) must negotiate in good faith.
Thirdly, negotiations must cover alternatives to dismissal, the criteria for selecting employees, how to minimise dismissals, the conditions for the dismissals and how to avert the adverse effects of the dismissal.
Finally, for purposes of the negotiations, the employer is obliged to disclose all relevant information to the trade union or the workplace representatives for the trade union or workplace representatives to engage effectively in such negotiations.
If no agreement can be reached during the negotiations, either party may, within one week, refer the matter to the Labour Commissioner to appoint a conciliator.
An employer must pay severance pay to an employee who has completed 12 months of continuous severance. Severance pay must be an amount equal to at least one week's remuneration for every 12 months of continuous service.
An employee will further be entitled to payment in lieu of notice for leave days not taken and for work completed.
Investment and Local Content
4. Are there any general regulations on foreign investment, including any investment requirements for foreign companies to invest in conjunction with local entities or people, and if so, to what effect?
Namibia is relatively friendly to foreign investors, who by virtue of the Foreign Investments Act 27 of 1990 (FIA) are generally allowed to conduct any business or invest in any business activity. However, a more restrictive act that repeals the FIA has been promulgated but has not yet commenced; namely the Namibia Investment Promotion Act 9 of 2016 (NIPA). The NIPA will require investors in Namibia to be registered with the Ministry of Trade, Industrialisation and SME Development. Also, certain sectors will be regulated strictly regarding foreign investment.
5. Are there any specific legislative requirements, and if so, what are they?
In terms of Black Economic Empowerment (BEE), there is, to date, no general legal framework in place. However, a bill has been drafted called the New Equitable Economic Empowerment Bill (NEEEB), which is a codification of the New Equitable Economic Empowerment Framework (NEEEF). The NEEEB has, however, not yet been promulgated and thus currently has no legal force. Once it is promulgated as an Act of Parliament, it will set out the general empowerment regulatory framework for Namibia. Other than that, there are certain specific pieces of legislation that have requirements concerning the empowerment of locals, mainly in mining, petroleum and communications.
6. Are there any restrictions on the importation of goods or raw materials into the country, including requirements that local produce is utilised rather than products bought outside the country?
The Directorate of International Trade of the Ministry of Industrialisation, Trade and SME Development is responsible for coordinating the country's trade policies and overseeing Namibia's participation in international trade.
The Directorate is responsible for manging import/export procedures. Namibia is a party to the WTO Agreement on Import Licensing.
All imports are subject to licensing, but most licences are automatically granted. A limited number of products are subject to non-automatic licences: medicines; chemicals; frozen and chilled fish and meat; live animals; genetic materials; controlled petroleum products; firearms and explosives; diamonds; gold and other minerals; all second-hand goods such as clothing; and motor vehicles (in practice the Directorate does not issue licences for imported second-hand clothing).
Most agricultural imports require a permit from the Directorate. The Namibian Agronomic Board issues permits for the import of controlled agronomic crops such as wheat and wheat products as well as corn and corn products. Imports of agronomic crops and derivatives, as well as all plants and plant products, also require the issuance of phytosanitary certificates.
The Namibian Meat Board regulates the import and export of live animals (cattle, sheep, goats and pigs) and derivative meat products. Importers of live animals and meat products must demonstrate compliance with the country's animal health standards by obtaining a veterinary import permit from the Directorate of Veterinary Services.
7. Are there any restrictions on the purposes for which money may be lent?
Loans (and credit transactions in general) from outside the CMA are subject to Bank of Namibia (BON) approval, which is normally granted within 3–10 days provided interest rates are reasonable and if servicing of interest and repayment of capital would not disrupt the BON's balance of payments. Generally, there is no restriction on the purposes for which money may be lent, provided the purpose is lawful.
8. How does the law work in relation to security interests in this jurisdiction, and over which classes of assets may security be granted? Does your jurisdiction recognise the concept of a trust and the role of a Security Trustee?
A distinction is made between real security and personal security.
• Pledge. A form of security over movable property. The debtor delivers the pledged movables to the creditor, who keeps it for as long as the pledge is in force. The pledgee (creditor) acquires a limited real right over the pledged property. This enables the pledgee to retain the pledged property until the debt has been settled.
• Mortgage bond. Created by registration of the bond at the Deeds Registry. The subject of the mortgage bond is immovable property (land).
• Notarial bond. Registered at the Deeds Registry, but is registered over movables and not immovable property. A notarial bond would typically be registered over equipment or machinery, either in the form of a general notarial bond (over movable property in general) or a special notarial bond (over specified movable property).
• Surety. An agreement where the surety renders themselves liable toward the creditor of another person (the debtor) for the proper compliance with the obligations of the debtor. This agreement creates two debtors; the debtor under the principal obligation and the surety under the contract of surety. The debtor remains liable for the debt, but should they fail to perform, the creditor may call on the surety.
• Cession. A transfer of rights (claims) from one person (the creditor/cedent) to another person (cessionary). The effect of a cession is that the debtor has to perform to a new creditor, being the cessionary.
• Guarantee. An undertaking to pay, usually dependent on some simple conditions. A guarantee is not accessory in nature but creates a principal obligation. A guarantee comes into operation upon conclusion of the agreement.
Namibia recognises the concept of a trust and security trustee.
Procurement/PPPs
9. What laws, regulation and guidance are in place to manage the procurement and management of infrastructure projects (including PPPs) and is this regime overseen by a special unit, division or department (such as a PPP unit) within Government?
In Namibia, public procurement is governed by the Public Procurement Act 15 of 2015 (PPA) read together with the Public Procurement Regulations of 2017 (PPR), which came into effect in 2017. The PPA deals with the procurement of goods, works and services, the letting or hiring of anything or the acquisition or granting of rights for or on behalf of, and the disposal of assets of, public entities. Specifically, the Act deals with the bidding process for public entity tenders.
The PPR set out certain thresholds that limit the operation of the PPA. The PPR also provide in more detail for the bidding process and procedures, as well as for review procedures.
Section 6 of the PPA establishes the Procurement Policy Unit (PPU). The PPU is tasked with advising the Minister of Finance on any procurement or disposal governed by the PPA, including monitoring compliance with the PPA, reviewing the procurement system, assessing socio-economic impacts of procurement, etc. The PPU is also authorised to issue authorised versions of the standardised bidding documents, standard forms of contracts, pre-qualification documents, procedural forms, requests for proposals and other similar documents for mandatory use by every public entity implementing procurement (section 7(1)(i) of the PPA). In light of this function, the PPU has prepared and issued the General Conditions, which are intended to supplement the bidding documents.
10. Is there a merger control regime? If so, what are the thresholds for notification?
Mergers in Namibia are regulated by the Competition Act 2 of 2003. In determining whether a transaction is notifiable, the Namibian Competition Commission (NaCC) has a two-step approach:
Step 1: combined value of parties
The NaCC checks whether or not the transaction is notifiable considering all of the following cumulative thresholds. The Competition Act does not apply where the combined value of the assets and/or turnover of the acquirer and target equals or does not exceed:
a) the combined annual turnover in, into or from Namibia of the acquirer and target is equal to or valued below NAD 30 million;
b) the combined asset value in Namibia of the acquirer and target is equal to or valued below NAD 30 million;
c) the annual turnover in, into or from Namibia of the acquirer plus the assets in Namibia of the target is equal to or valued below NAD 30 million; and
d) the annual turnover in, into or from Namibia of the target plus the assets in Namibia of the acquirer is equal to or valued below NAD 30 million.
Step 2: value of the target
If any one or more than one of the thresholds set out above is/are not met, the next step is to look at the asset and turnover values of the target only. If the assets or turnover value of the target (in, into or from Namibia) is equal to or less than NAD 15 million, then the transaction will not be notifiable, regardless of the combined value set out in (a) to (d) above.
It is possible for the NaCC to require a filing even if it falls below the thresholds, if the NaCC considers it necessary to deal with the merger. The rules, however, do not state under what circumstances the NaCC may require a merger falling below the thresholds to be notified and we are not aware of any instance where this discretion was exercised.
11. Is there a competition/anti-trust law that prohibits items such as abuse of a dominant position, cartel behaviour and exclusivity arrangements, and if so, how actively is it enforced?
Namibia recognises three types of prohibited conduct: horizontal restrictive practices; vertical restrictive practices; and abuses of dominance.
A restrictive practice concerns anticompetitive cooperation, whereas abuse of dominance is aimed at unilateral anticompetitive conduct.
Abuse of dominance, cartel behaviour and exclusivity arrangements are therefore prohibited.
A mere agreement between/concerted practice of firms or a decision by an association of firms in a horizontal relationship is not as such prohibited. There is a difference between two types of agreements: those that are prohibited without determining whether they have, or may, produce anticompetitive consequences; and those that will only be condemned once it has been established on the facts of the case that they affect competition negatively.
The NaCC investigates and evaluates alleged prohibited practices and has the initial responsibility for investigating complaints of alleged prohibited practices. Complaints may be initiated by the NaCC itself or submitted by a third party.
Upon initiating or receiving a complaint, the NaCC must investigate it. The NaCC is vested with the power to subpoena and search and seizure to assist it with investigations. Within one year of a complaint being submitted, the NaCC must, if it determines that a prohibited practice has been established, refer the matter to the Tribunal; alternatively, it must issue a notice of non-referral.
12. What protections does the local law provide for intellectual property rights?
Trademarks, copyrights, patents, industrial property registrations and protection in terms of common law (passing-off) are all recognised.
The new Industrial Property Act 1 of 2012 affords the following infringement remedies: (i) an interdict (similar to an injunction); (ii) the removal of the infringing mark from goods or materials; (iii) an order where the infringing mark is inseparable or incapable of being removed that all goods or materials be delivered up to the claimant; (iv) damages; and (v) in lieu of damages, a reasonable royalty which would have been payable by a licensee.
For the purposes of determining the amount of any damages or reasonable royalty, the Industrial Property Tribunal may direct an enquiry to be held.
If passing off is alleged, then the matter is dealt with through common law and the High Court of Namibia will be responsible for damages.
Infringement of copyright shall be actionable at the suit of the owner of the copyright, and all such relief by way of damages, interdict, delivery of infringing copies or plates used or intended to be used for infringing copies or otherwise shall be available.
Tax and Forex
13. What taxes are businesses subject to in this jurisdiction? Please include, for example, corporate tax, VAT, stamp duty, tax on share issues, etc. and the applicable rates. What transfer pricing rules apply, and are any withholding taxes in force in your jurisdiction?
At present, companies include not only companies registered in Namibia, but Namibian branches of foreign companies deriving local income. Other associations registered or incorporated outside Namibia which operate or have an office in Namibia, are companies. Partnerships generally have no separate taxable identity and each partner is taxed on his/her share of the profit.
The Minister of Finance recently announced that there is an intention to change Namibia from a source-based tax system to a resident-based tax system.
Companies are subject to a normal tax rate of 32%.
Dividend income received by a company which is registered in Namibia is exempt from normal tax but subject to withholding tax.
The Minister of Finance recently announced that there is an intention to change legislation relating to dividend taxes.
A company with employees is required to register under the "Pay-As-You-Earn" system of collecting tax.
Under section 34A of the Income Tax Act, a withholding tax equal to 10% of any amount of interest accruing to or in favour of any person (other than a company) by a Namibian banking institution or unit trust scheme must be paid. Under section 35B there is a 10% withholding tax on any amount of interest for the benefit of a non-resident.
Under section 35A of the Income Tax Act, a resident who pays or becomes liable to pay any management fee, consultancy fee, director's fee or entertainment fee to a non-resident must deduct or withhold tax from such payment at 10% for management or consultancy fees and 25% for director's or entertainment fee.
Non-resident shareholder tax between 10% and 25% is levied on dividends received by non-residents from a Namibian company. Dividends to residents are exempt from income tax.
VAT is recognised in Namibia. The minimum threshold for a VAT registration is NAD 500,000.
The transfer or hypothecation of any property in Namibia attracts stamp duties under the Stamp Duties Act 15 of 1993. Schedule 1 of the Act sets out the duties. If no specific stamp duties are prescribed, it will attract standard duties of NAD 5. Section 12 of the Act states that an instrument required to be stamped which has not been stamped may not be made available for any purpose, specifically as evidence in court, except in criminal proceedings or in any proceedings by or on behalf of the State for the recovery of any duty on the instrument or of any penalty incurred under the Act.
Stamp duties payable in respect of a certain company and industrial property administrative actions have been replaced with a prescribed fee payable directly to the bank account of the Business and Intellectual Property Authority. However, stamp duties are still payable in respect of the transfer of shares.
14. Are there any foreign exchange rules that control repatriation of funds out of this jurisdiction?
Under section 17 of the Bank of Namibia Act, 15 of 1997, the currency of Namibia is the Namibia Dollar (NAD). The Namibia Dollar is pegged to the South African Rand (ZAR) at par. The exchange rate of the Namibia Dollar is determined by reference to the exchange rate of the South African Rand for a particular foreign currency on international markets.
The Bank of Namibia (BON), established under the Bank of Namibia Act, 8 of 1990, is Namibia's central bank and is regulated by the Bank of Namibia Act, 15 of 1997. Under section 46 of the Act, BON acts as the Government's agent in the administration of foreign exchange control. Under section 29 of the Bank of Namibia Act, the BON may buy, sell or deal in foreign currencies.
Foreign Exchange Control is regulated by the Currency and Exchanges Act 9 of 1933 and the Exchange Control Regulations. The Currency and Exchanges Act was inherited from South Africa prior to the independence of Namibia from South Africa.
In terms of the Exchange Control Regulations (amended in Namibia as at 8 July 2004), only Authorised Dealers (ADs) of the BON may deal in foreign currency and exchange foreign currency for Namibian currency and vice versa, and only for such purposes and on such conditions as BON may determine. BON appointed most commercial banks as ADs. The BON issued Exchange Control Rulings to ADs containing authorities, instructions and conditions for a wide range of transactions involving foreign exchange.
Banks are regulated by BON under the Banking Institutions Act, 2 of 1998. Under the Banking Institutions Act, banks (and ADs) should exercise due diligence over customers' banking transactions, particularly international funds transfers. On receipt of international funds transfers, ADs will follow the Exchange Control Regulations by requiring the beneficiary of the transfer to disclose (a) the details of the transferor, and (b) the reason for the transfer. Supporting documents must also be provided. Certain prudential requirements are also implemented on foreign exchange transactions in order to promote maximum availability of foreign exchange at competitive rates.
With BON approval, qualifying institutions like insurance companies, pension funds and fund managers may invest up to 30% of total assets under management in portfolios held abroad. The investment limit for private Namibian residents abroad is NAD 4 million.
Interest on foreign currency denominated loans must generally not exceed LIBOR plus 2%, although this is sometimes exceeded.
15. What is the courts' approach to enforcement of foreign judgments or arbitral awards?
A party who calls on a Namibian court to adjudicate on a contract dispute has to show that the High Court (or Magistrates Court in smaller claims) has jurisdiction. Where a contract was concluded in Namibia or performed in Namibia or the respondent is in Namibia, the Namibian courts will have jurisdiction. However, peregrini (foreign litigants) may be expected to lodge security with the Registrar of the High Court.
Enforcement of foreign judgments in Namibia is regulated by the Enforcement of Foreign Civil Judgments Act 28 of 1994. This Act applies only to designated countries. At this stage, only South Africa is a designated country. For other countries, the common law will be applied, under which, a foreign judgment is not directly enforceable in Namibia, but forms a cause of action that may be enforced by a Namibian court if the following requirements are met: (a) the court which pronounced the judgment must have had jurisdiction to entertain the case according to the principles recognised by Namibian law with reference to the jurisdiction of foreign courts (sometimes referred to as "international jurisdiction or competence"); (b) the judgment must be final and conclusive in its effect and not be superannuated; (c) the recognition and enforcement of the judgment would not be contrary to public policy; (d) the judgment was not obtained by fraudulent means; and (e) the judgment does not involve the enforcement of a penal or revenue law of the foreign state.
Namibia is not a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Namibian courts will, however, acknowledge and enforce foreign arbitral awards, provided that a fresh action, based on the foreign arbitral award, is instituted. If the Namibian court is satisfied that the process was procedurally fair, by a competent body and the award is not against public policy, it will acknowledge, confirm and enforce the arbitral award.
16. Are the local courts generally supportive of arbitration proceedings (for example, in granting interim relief in support of such arbitrations)?
Local courts are supportive of arbitration proceedings and can grant interim relief (upon application) suspending the main proceedings until arbitration has been concluded.
17. In order for a foreign company to sign a document under local law, are there any signing procedures that must be followed?
None, provided it is signed in Namibia.
18. Are there any current legislative or policy developments that companies investing in this jurisdiction should be aware of?
In 2018, the Ministry of Finance released draft legislation to bring about significant changes to the current tax regime. Given the poor drafting, it has proven to be difficult to comment on the wording itself. One would like to assume that the intention of the Minister of Finance is to align the Namibia tax regime to that of South Africa. The following are the most significant proposed tax amendments:
• Introducing a 10% dividend tax for residents.
• Abolishing the current practice of a conduit principle in the taxation of trusts to harmonise the taxation of trusts.
• Deepening the current hybrid tax system by taxing all income earned from foreign sources. Namibian residents will have to declare such income in their annual tax returns.
• Disallowing the deductibility of fees and interest paid to non-residents for calculating taxable income until payment of withholding tax is proven. 
Hugo Meyer van den Berg Koep & Partners
Stefan van Zijl Koep & Partners
Koep & Partners
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