- What does BIFSC do? And when was it established?
Botswana IFSC’s role is to establish and develop Botswana as a world-class hub to facilitate the delivery of a wide range of cross-border financial and ICT enabled services to clients in other countries. Botswana IFSC is a government agency which was incorporated in April 2003.
- What services does BIFSC offer? Where is it located?
Botswana IFSC is being developed as an active cross-border financial services centre. The focus is on the IFSC being a location where active and substantive financial services business is undertaken. The key characteristics of an IFSC are that financial services are provided to clients who are domiciled in other countries and that fiscal incentives are provided to financial and non-financial institutions to encourage them to accredit to the IFSC to provide these services. IFSC offices are located in Plot 50676, Fairgrounds Office Park (Block B) 2nd floor, Gaborone, Botswana.
- Who owns the company?
Botswana government through- The Ministry of Finance and Development Planning.
- What do companies need to do to get accredited by BIFSC?
ANS: Applications to take advantage of the Botswana IFSC package of incentives are submitted to the Botswana IFSC, and should contain the name of the company, history and ownership of the company along with the most recent audited accounts. The proposed activities and the target markets for which tax certificate is sought should also be set out.
The application should detail how the company will be of benefit to the Botswana IFSC’s broad objectives including a three year employment forecast. Three year forecasts of the Balance Sheet, Profit and Loss and Cash flow statements should be provided.
Companies seeking to be accredited by BIFSC are encouraged to contact our marketing executives. Our telephone number is +267 365 1406, fax number is +267 391 3075 or email firstname.lastname@example.org
- How many Companies have been accredited under the BIFSC since inception of the Company? What type of companies have been accredited?
Botswana IFSC has grown considerably, with more than 30 companies now accredited by our Certification Committee. These companies include cross-border banking, investment funds, financial advisory services, ICT services, insurance firms, call centres, administration companies and back office departments.
- Does BIFSC give financial assistance?
No BIFSC does not give financial assistance, however various funding mechanisms are available in Botswana through other government agencies, should local equity or joint ventures participation be sought. There are also private equity funds in operation.
- What does the clause ‘Limited by guarantee’ mean?
Limited by guarantee means the entity is either non-profit making or if it is profit making all the profits are put back into the entity as opposed to being distributed to members/shareholders.
- Who are the directors of BIFSC?
Mr. H.C.L. Hermans – Chairman. Managing Director, Hermans & Associates and former Governor of the Bank of Botswana, Mr. A.P. Boshwaen.CEO, Botswana IFSC, Mr. J.N. Kamyuka General Manager, Management Services Botswana Development Corporation, Dr. N.H. Fidzani Executive Director, Botswana Institute of Development Policy Analysis, Ms. I.O. Sennanyana Deputy Secretary for Financial Affairs, Ministry of Finance & Development Planning, Mr. P. Molefe Chief Executive Officer, Botswana Building Society
- How is the company structured?
Please see the BIFSC ORGANOGRAM
- Is Botswana International Financial Services Centre a tax haven?
We are not a tax haven. Countries offering zero tax rates are often frowned upon internationally. This is because tax havens are regarded as a harmful practice as they are often subject to secrecy, which is not sustainable. Traditional tax havens are also coming under increasing pressure over issues such as money laundering and tax evasion. We do not intend to ruin our international reputation by embracing practices which place us in the category of a tax haven. Our vision and values are predicated on integrity and best practice, among other things. We are by deliberate design, and as matter of stated policy, a transparent, civil business location with internationally benchmarked standards of regulation, complete with rigorous screening and project approval processes.
- What are you doing to ensure that illegal funds are not invested through the BIFSC?
The Botswana IFSC is structured as a transparent, open business location with high standards of regulation and a rigorous screening and project approval process. The Bank of Botswana, the IFSC’s designated regulator, uses Interpol, amongst others, to screen companies before they are approved. There is strong legislation to protect Botswana’s reputation as a financial location specifically to combat money laundering, fraud and terrorism. The stringent vetting and screening process coupled with adherence to international anti money laundering treaties ensures that only organizations of good repute are allowed to set up in the IFSC.
We have several pieces of legislation such as Proceeds of Serious Crime Act and Corruption and Economic Crime Act and are a signatory and accede to International Conventions combating money laundering and financing of terrorism. We are signatories to the following Conventions:
- Basle Statement of Principles – Sets out disclosure standards aimed at preventing money laundering, these include the adequate maintenance of records, cooperation with law enforcement agencies, and the disclosure of suspicious transactions.
- IMF Financial Action Task Force (FATF) – Botswana accedes to the 40 FATF recommendations aimed at addressing and preventing money laundering. FATF is a task force charged by the IMF’s International Monetary and Financial Committee to combat money laundering. Commonwealth Ministers ratified and adopted the 40 recommendations in 1996.
- UN Geneva Convention – the convention sought to stem money laundering that emanated from trafficking of narcotic and psychotropic substances.
- United Nations Convention on the Suppression of Financing of Terrorist Activities Resolution – this calls on UN member states to freeze assets owned by Terrorists as well as their associates and effectively cut their assets to the international financial system. The convention further calls on countries to make public the list of terrorists whose assets have been frozen and their amounts.
- Is the technological capability of Botswana up to the challenge?
Yes it is. The Government has realized that IT enabled services are vital and have developed a national policy on ICT. We have an ongoing investment in various types of infrastructure, such as telecommunications – international data and voice communication.
We have an ongoing commitment to upgrade technology and improve service capabilities and network. Botswana Telecommunications Corporation has built a Virtual Point of Presence in London, thus enabling Botswana to be accessible via multiple technologies to any telecommunications provider.
We have a very liberalized financial climate – locally based commercial banks and service providers are aligning themselves to offer products and services similar to those offered anywhere else in the world. More sophisticated products, services and technology will therefore be acquired as the financial services sector grows to allow transactions of a more complex nature to be handled from Botswana.
- How can a company benefit from being an BIFSC accredited company?
Corporate institutions of all types and in all business sectors will find it very beneficial to carry out a broad range of financial services through the IFSC. Botswana IFSC offers a comprehensive package of incentives which includes:
- a guaranteed corporate tax of 15% until 2020;
- exemption from withholding taxes on interest, commercial royalties, management or consultancy fees and dividends paid by an IFSC company to a non-resident;
- access to Botswana’s expanding Double Taxation Treaty network, at present
comprising South Africa, United Kingdom, Mauritius, Sweden, France, Zimbabwe, Namibia and Russia;
- where there is no double taxation agreement yet in place, credits for withholding taxes (of up to 15%) levied in other jurisdictions;
- tax exemption for Collective Investment Undertakings (CIUs); applicable to units trusts ( mutual funds) and other collective investment structures; and
- access to Botswana’s 200 percent tax training rebate.
- How different is the BIFSC from organizations like Botswana Export Development & Investment Authority, Botswana Development Corporation Limited and Botswana Stock Exchange?
The BIFSC was set up because of the realisation that the sector in which it operates-Financial and ICT services requires dedicated attention and a team of professionals with experience in the area in order to better ensure success. The IFSC acts in partnership with all other government agencies of Botswana.
- What role does the Company play in relation to National Development Plan 9 & Vision 2016?
It plays a significant role in diversifying the economy from being a mineral led one.
- Is the new building next to Botswana Accountancy College (BIFM building) ‘the’ International Financial Services Centre-in the context that only financial services companies operate in that building?
No. Tenancy at the building is not restricted to financial services companies.