Botswana has put great effort into creating a model framework to effectively conduct and regulate IFSC operations.
Legislation includes income tax amendments to cater for a privileged IFSC tax regime. These include:
- a guaranteed corporate tax of 15% until June 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 Botswana¹s expanding Double Taxation Treaty network, at present comprising South Africa, United Kingdom, Mauritius, Sweden, France, Zimbabwe, Namibia, India 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 unit trusts (mutual funds) and other collective investment structures; and
- access to Botswana¹s 200 percent tax training rebate.
The Bank of Botswana and the Registrar of Insurance have been designated by legislation as the regulatory authorities for IFSC activities. The Botswana IFSC framework provides for full transparency, applies a complete information exchange programme through the growing double taxation treatynetwork and requires the establishment of genuine and substantive business activity in the country.