flag Botswana Botswana: Investing

In this page: FDI in Figures | What to consider if you invest in Botswana | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

According to UNCTAD's World Investment Report 2023, FDI inflows into Botswana stood at USD 216 million in 2022 compared to a negative inflow of USD 319 million one year earlier. That same year, the total stock of FDI in Botswana reached USD 5.21 billion, around 27.2% of the country’s GDP. The mining sector attracts most of the FDI in the country. However, investments in the services industry (insurance and banking) have been growing in recent years. FDI primarily comes from the Southern African Customs Union (SACU), the European Free Trade Association (EFTA), Canada, and Zimbabwe.

The Government of Botswana is seeking to diversify its economy and secure more FDIs. The government encourages new investments and joint ventures and has put measures in place to increase investment in the agriculture, diamond, education, health, and transportation sectors. Furthermore, to assist foreign investors, the government has created the Botswana Investment and Trade Centre (BITC). Botswana provides favorable tax rates and lacks foreign exchange controls. The government has introduced a new National Investment Strategy (NIS) spanning 2023 to 2030, aiming to enhance both foreign and domestic investment flows in terms of quantity and quality. Initiatives have been launched to bolster economic activity and attract foreign investment, including the establishment of a diamond hub. This effort has attracted value-added businesses like cutting and polishing operations to the country. The country’s strengths lie in its low levels of corruption (the lowest in Africa), its good economic governance, its liberal tax system, and its stable democracy. Botswana has also received positive reviews from various international rating agencies, and the country is ahead of many of its neighbors. However, high production costs, a lack of skilled labor, and the country’s landlocked position are significant obstacles for potential investors. Furthermore, leading economists in the country have reported that the significant financial reserves generated by the diamond industry have resulted in a lack of interest from international investors led to believe that the country does not need an inflow of foreign capital. Botswana ranks 85th among the 132 economies on the Global Innovation Index 2023 and 36th out of 184 countries on the latest Index of Economic Freedom.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 32-319216
FDI Stock (million USD) 5,7335,0115,211
Number of Greenfield Investments* 348
Value of Greenfield Investments (million USD) 137346297

Source: UNCTAD - Latest available data.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

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What to consider if you invest in Botswana

Strong Points

The strong points of the Botswana economy include:

  • Botswana is among the most stable and transparent countries in Africa
  • Investors have preferential access to the Southern African Development Community’s (SADC) entire marketplace – over 292 million people (Duty-free access to South Africa, Namibia, Lesotho and Swaziland)
  • Investors have access to double taxation avoidance agreements with South Africa, United Kingdom, Sweden, France, Mauritius, Namibia, Zimbabwe and Russia.
  • The government does not impose foreign exchange controls, which guarantees free repatriation of profits, dividends and capital
  • Educated workforce; 82% are literate and most speak English
Weak Points

The main challenges for foreign investors include:

  • Infrastructural issues (power outages, shortages of water supply, slow Internet, limited logistics network)
  • Important utilities and services remain under State ownership and are not open to private investment - foreign or national.
  • Equal treatment to foreign investors is not guaranteed by law
  • Foreign investors have no access to financial incentive schemes – such as the Credit Guarantee Scheme and a loan fund for citizen contractors
Government Measures to Motivate or Restrict FDI

The Government of Botswana grants the following measures to facilitate foreign investment:

  • Manufacturing companies (including foreign) are subject to a reduced tax rate of 15% (instead of 22%) – subject to approval.
  • Foreign companies granted with Development Approval Order can benefit from a tax holiday for a period of 5 to 10 years.
  • Companies accredited as an International Financial Services Centre (IFSC) are subject to a reduced tax rate of 15% and are exempt from withholding tax and capital gains tax
  • Companies accredited by the Innovation Hub are subject to a reduced tax rate of 15%
  • Foreign companies are exempt from tax on dividends received from foreign source where the company holds 25% or more of the equity

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Procedures Relative to Foreign Investment

Freedom of Establishment

Foreign investors usually receive equal treatment; however, this is not guaranteed by law, as there is no legal provision on the matter. There are also additional restrictions in favour of local investors:

  • 30% of government construction contracts is reserved for citizens
  • Agricultural lands cannot be to transferred to non-citizens without ministerial approval. Companies that are majority foreign-owned are also considered as non-citizens
  • Financial incentive schemes – such as the Credit Guarantee Scheme and a loan fund for citizen contractors - are not open to foreign investors.
Acquisition of Holdings
Foreign investors can fully own companies, purchase existing local companies or establish joint-ventures. However, foreign ownership is limited in small-scale businesses that are reserved to citizens (including butcheries, general trading establishments, gas stations, liquor stores, supermarkets): foreigners can participate as minority joint venture partners in medium-sized businesses. They can hold the majority share if they obtain written approval from the trade minister.
Obligation to Declare
Foreign investors must register with the Companies and Intellectual Property Authority (CIPA). The company registration process takes around 14 days; however, foreign investors should allow 48 days to complete additional required registrations such as tax registrations, opening bank accounts, and obtaining necessary licenses and permits.
Competent Organisation For the Declaration
Ministry of Investment, Trade and Industry
Requests For Specific Authorisations
Foreign direct investment (FDI) is not permitted in small-scale businesses in retail trade services and manufacturing in order to protect local entrepreneurs. Furthermore, important utilities and services remain under State ownership and are not open to private investment - foreign or national. There are no restrictions in growing sectors such as mining, tourism, financial services and most mid- and large-scale manufacturing. However, trade and non-financial services, manufacturing and tourism all require a licence.

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Investment Opportunities

Investment Aid Agency
Botswana Investment and Trade Centre
Tenders, Projects and Public Procurement
Global Tenders, Government Tender Notices from Botswana
African Development Bank Group, Tenders in Botswana
Online Tenders, Tenders in Botswana
Central District Council Botswana, Tenders in the Central District (Botswana)
Other Useful Resources
Botswana National Development Bank
Botswana Development Corporation
Citizen Entrepreneurial Development Agency

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Latest Update: April 2024