Foreign Investment Act

1. Interpretation the holder of a Certificate and the information to be furnished in such reports; PART I (d) such other matters as the Minister may deem necessary ADMINISTRATION OF ACT AND PRINCIPLES REGARDING or expedient to prescribe for the purposes of this Act. FOREIGN INVESTMENT Temporary 18. (1) Until the date of publication of the notice referred

2. Administration of Act provision relating to in subsection (2), the provisions of sections 8, 9 and 10

3. Business activities of foreign nationals foreign exchange shall be construed as though they had been amended or modified to the extent necessary to take account of the PART II obligations of the Government: *[S. 18(1) substituted by s. 3(a) of Act 24 of 1993] STATUS INVESTMENTS (a) under the Bilateral Agreement between the

4. Minister’s power to issue Certificate of Status Investment Governments of the Republic of Namibia and the

5. Investments eligible for Certificate of Status Investment Republic of South Africa, dated 4 April 1990, and

6. Application for a Certificate of Status Investment any amendment or modification thereof; and

7. Grant of a Certificate of Status Investment (b) in the event of Namibia becoming a party to the RIGHTS AND OBLIGATIONS OF HOLDERS OF CERTIFICATES Multilateral Monetary Agreement existing between the

8. Availability of foreign currency for certain payments Governments of the Kingdom of Lesotho, the

9. Availability of foreign currency for transfer of profits and proceeds of Kingdom of Swaziland and the Republic of South sale Africa, also under that agreement and any amendment

10. Retention of foreign currency obtained from sale of exported goods or modification thereof.

11. Compensation in case of expropriation (2) As soon as:

12. Obligations of holder of Certificate

13. Dispute settlement in respect of Special Status Investments (a) a currency for Namibia has been established under section 19 of the Bank of Namibia Act, 1990 (Act 8 AMENDMENT TRANSFER AND CANCELLATION OF CERTIFICATE of 1990); and

14. Amendment and transfer of a Certificate (b) the agreements referred to in subsection (1) have

15. Cancellation of a Certificate expired or have been terminated or are no longer in effect so as to impose on the Government of Namibia PART III obligations relating to the management of foreign exchange transactions,the Minister shall, by notice in MISCELLANEOUS the Gazette, declare that the provisions of subsection

16. Offences (1) this section, subsection (2) of section 8, subsection

17. Regulations (5) of section 9 and subsection (3) of section 10 have

18. Temporary provision relating to foreign exchange expired and thereafter those provisions shall be of no

19. Application further force or effect.

20. Short title and commencement 2 15 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 fails to comply with the notice, or fails to satisfy the BE IT ENACTED by the National Assembly of the Republic of Namibia, Minister as to why the Certificate should not be cancelled, as follows: or in a case referred to in paragraph (c) of subsection (1), fails to satisfy the Minister that any past failure was not Interpretation 1. (1) In this Act, unless the context otherwise indicates: due to his or her fault and that adequate steps are being “Bank of Namibia” means the Bank of Namibia established taken to comply with the requirements of the Certificate, by section 2 of the Bank of Namibia Act, 1990 (Act 8 of the Minister may cancel the Certificate, but such 1990); cancellation shall not affect the right of the holder of the “business activity” means any activity engaged in for gain Certificate to refer any dispute relating to such canceIlation or reward in any part of the economy of Namibia; to international arbitration or to the courts of Namibia in “Certificate” means a Certificate of Status Investment accordance with section 13. issued under this Act; “company” includes any other body corporate; “enterprise” means the business or undertaking in which PART III foreign assets are invested and in respect of which a MISCELLANEOUS Certificate has been issued; “foreign assets” includes freely convertible foreign currency, and any currency, credits, rights, benefits or Offences 16. Any person who: property, whether corporeal or incorporeal, obtained by (a) in or in connection with an application for a Certificate the expenditure of foreign currency or, except as regards under this Act; or currency of Namibia which has not been obtained by the expenditure of foreign currency, belonging to a foreign (b) for the purpose of obtaining or retaining any foreign national, and the returns derived from such credits, rights, currency as provided for in this Act, makes any benefits or property; statement which he or she knows to be false or does “foreign national” means- not believe to be true, or knowingly furnishes any false (a) a person who is not a citizen of Namibia; information, shall be guilty of an offence and liable (b) a company incorporated under the laws of any country on conviction to a fine not exceeding R100,000 or to other than Namibia; imprisonment for a term not exceeding ten years, or (c) a company incorporated within Namibia in which the to both such fine and such imprisonment. majority of the issued share capital is beneficially Regulations 17. The Minister may make regulations prescribing - owned by foreign nationals within the meaning of this (a) the form and manner in which applications for definition; Certificates shall be made, the information which shall “Government” means the Government of Namibia and accompany such applications and any fee payable on includes any body or institution established by or under such applications; any law; “the Minister” means the Minister of Trade and Industry; (b) the form and manner in which applications for or “Namibian” means a citizen of Namibia and includes a returns relating to foreign currency shall be made and company incorporated under the laws of Namibia in which the information which shall accompany such the majority of the share capital is owned by Namibians applications or returns; within the meaning of this definition. 14 3 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 (2) At any time before a currency for Namibia has been (a) in a case where a Certificate does not make provision established under section 19 of the Bank of Namibia for the settlement of disputes by international Act, 1990 (Act 8 of 1990), an investment in Namibia arbitration, as impairing or limiting the right of the by a foreign national of rand in the currency of the holder of such Certificate, in the event of a dispute, to Republic of South Africa shall be deemed to be an any remedy available to the holder in any competent investment of foreign assets notwithstanding that rand court in Namibia; will during that period also be the currency for (b) in a case where a Certificate does make provision for Namibia. the settlement of disputes by international arbitration, as precluding the holder and the Minister from PART I agreeing that any particular dispute shall not, as ADMINISTRATION OF ACT AND provided in the Certificate, be referred to international PRINCIPLES REGARDING FOREIGN INVESTMENT arbitration, but be heard and finally determined by any competent court in Namibia. Administration 2. Subject to the laws governing the public service, there Amendment and 14. The Minister may, with the consent, or on application, of Act shall be established in the Ministry of Trade and Industry transfer of of the holder of a Certificate, as the case may be, amend a division, to be known as the Investment Centre, to assist a Certificate a Certificate issued under this Act or transfer the Certificate the Minister in the administration of this Act. to any other foreign national. Business 3. (1) Subject to the provisions of this section and the Cancellation of 15. (1) Where: activities of compliance with any formalities or requirements a Certificate (a) the holder of a Certificate, or any person who acted foreign prescribed by any law in relation to the relevant business on behalf of any applicant for a Certificate, is nationals activity, a foreign national may invest and engage in any convicted of an offence under section 16 of this Act; business activity in Namibia which any Namibian may undertake. (b) it is established to the satisfaction of the Minister that a Certificate was issued in consequence of incorrect (2) For the purposes of any law governing the information supplied by the applicant, or a person who establishment and carrying on of any business activity or acted on behalf of an applicant for a Certificate; or the taxation of the income, or any other aspect, of any business activity, a foreign national shall be in no different (c) the holder of a Certificate: position than any Namibian, except as may be otherwise (i) fails or neglects to implement the proposals forming provided by this Act. part of the application for the Certificate, as set (3) No foreign national engaged in a business activity or out in the Certificate; or intending to commence a business activity in Namibia shall (ii) fails or neglects to comply with any other obligation be required to provide for the participation of the referred to in section 12, Government or any Namibian as shareholder or as partner the Minister may give the holder of the Certificate written in such business, or for the transfer of such business to the notice to show cause, within thirty days or such longer Government or any Namibian: Provided that it may be a period as may be specified in the notice, why the Certificate condition of any licence or other authorisation to or any should not be cancelled. agreement with a foreign national for the grant of rights (2) If a person to whom notice is given under this section over natural resources that the Government shall be entitled 4 13 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 (b) carry out the obligations agreed between the Minister to or may acquire an interest in any enterprise to be formed and the holder and specified in the Certificate; for the exploitation of such rights. (c) carry out such other obligations of the holder as are (4) The Minister may, by notice in the Gazette, specify specified in the Certificate. any business or category of business which, in the (2) If the holder of the Certificate fails to carry out the Minister’s opinion, is engaged primarily in the provision obligations referred to in this section within the time or of services or the production of goods which can be periods, if any, specified in the Certificate, the Certificate provided or produced adequately by Namibians, and, with may be cancelled in accordance with the provisions of effect from the date of such notice, no foreign national section 15. shall, subject to the provisions of section 7(3), through the investment of foreign assets, become engaged in or be Settlement of 13. (1) If a person to whom a Certificate is to be issued permitted to become engaged in any business so specified disputes in under section 7 so elects, the Certificate shall provide that or falling within any category of business so specified. respect of any dispute between the holder of the Certificate and the (5) Any law relating to natural resources or any licence or Status Investments Government in respect of: other authorisation granted under such a law conferring (a) any issue relating to the amount of, or any other matter rights for the exploitation of such resources, may provide in connection with, any compensation payable in a for the granting or enjoyment of such rights to or by case of an expropriation as provided in section 11; Namibians on terms more favourable than those applicable to foreign nationals. (b) the validity or continued validity of the Certificate, shall be referred for settlement by international *[S. 3 (5) added by s. 1 of Act 24 of 1993] arbitration. (2) Where a Certificate provides for the settlement of PART II disputes by international arbitration, arbitration shall be STATUS INVESTMENTS in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law in force Minister’s power 4. If the investment of foreign assets in Namibia is an at the time when the Certificate was issued, unless by to issue a eligible investment as defined in section 5, the Minister agreement between the Minister and the foreign national Certificate of may, subject to the provisions of this Act, issue a Certificate to whom the Certificate is to be issued, another method of Status Investment of Status Investment in respect thereof and the provisions settling the dispute has been chosen and the Certificate so of sections 8 to 13 shall apply in relation to the enterprise provides. in respect of which the Certificate has been issued. (3) A Certificate which makes provision for international Investments 5. (1) For the purposes of this Act, an investment is an arbitration shall constitute the consent of the holder of the eligible for eligible investment: Certificate and the Government to submit to arbitration in Certificate (a) if it is an investment, or proposed investment, in the manner provided in the Certificate, and any award of Status Namibia by a foreign national of foreign assets of a rendered in any such arbitration shall be final and binding Investment value of not less than the amount which the Minister on the holder of the Certificate and the Government. may determine from time to time by notice in the (4) Nothing in this section shall be construed: Gazette for this purpose; (b) if it is a reinvestment, or proposed reinvestment, by a 12 5 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 foreign national of the profit or proceeds of sale of an subsection (1) of that section. enterprise specified in a Certificate, irrespective of Retention of 10. (1) A Certificate may, on such terms and conditions as the amount of such reinvestment. foreign currency may be prescribed therein, provide for the retention outside (2) Where the investment is for the acquisition of shares obtained from Namibia by the holder of the Certificate of any payment, in a company incorporated in Namibia, the investment sale of or a proportion of any payment, in foreign currency for shall, notwithstanding that the value thereof is equal to or exported goods goods produced by the enterprise or any undertaking exceeds the amount determined under subsection (1) (a), carried on by the enterprise which are exported from qualify as an eligible investment only if: Namibia. (a) not less than ten per cent of the share capital of the (2) Where a provision as contemplated in subsection (1) company is held or will, following the investment, be is made, no requirement of any law for the repatriation of held by the foreign national making the investment; the proceeds of the sale of goods exported from Namibia or or for persons to offer such foreign currency to the Bank (b) the Minister is satisfied that the foreign national of Namibia or the Government shall apply to the foreign making the investment is or will be actively involved currency representing any payment or proportion of any in the management of the company. payment referred to in subsection (1). (3) Where the investment is for the acquisition of a (3) The provisions of section shall, until the date of participating share in an unincorporated joint venture, the publication of the notice referred to in subsection (2) of investment shall, notwithstanding that the value thereof is section 18, have effect subject to the provisions of equal to or exceeds the amount determined under subsection (1) of that section. subsection (1) (a), qualify as an eligible investment only *[S. 10(3) added by s. 2 of Act 24 of 1993] if: Compensation 11. (1) No enterprise, or part of an undertaking carried on (a) not less than ten per cent of the participating share of in case of by an enterprise, or interest in or right over any property the joint venture is held or will, following the expropriation forming part of such undertaking shall be expropriated investment, be held by the foreign national making except in accordance with the provisions of Article 16 (2) the investment; or of the Namibian Constitution. (b) the Minister is satisfied that the foreign national (2) Where an enterprise or any part of an undertaking making the investment is or will be actively involved carried on by an enterprise, or any interest in or right over in the management of the joint venture. any property forming part of such undertaking is Application for a 6. (1) A foreign national may apply to the Minister for a expropriated, the Government shall pay to the holder of Certificate of Certificate of Status Investment in respect of an investment the Certificate just compensation for such expropriation Status Investment which qualifies as an eligible investment in terms of section 5. without undue delay and in freely convertible currency. (2) An application for a Certificate of Status Investment Obligation of 12. (1) The holder of a Certificate shall: shall be in the prescribed form, which shall require such holder of (a) bring to Namibia and invest in or apply for the information from the applicant as may be necessary to Certificate benefit of the enterprise, the foreign assets to which enable the Minister to consider applications in accordance the Certificate relates within the time or times provided with subsection (3). in the Certificate; 6 11 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 carried on by the enterprise is sold to any person (3) In considering an application for a Certificate of Status ordinarily resident in Namibia, for the transfer out of Investment, the Minister shall have special regard to: Namibia of the proceeds of such sale; (a) the extent to which the proposed investment is likely (d) where the enterprise is a company which has reduced to contribute towards Namibia’s development its share capital in accordance with the provisions of objectives; the laws relating to companies, for the transfer out of (b) the extent to which the enterprise in which the Namibia of the sum by which the capital is so reduced. proposed investment is to be made will utilize (2) No provision of any law relating to exchange control Namibian resources, including labour and natural shall apply to foreign currency which is the proceeds of resources so as to contribute to the economy, by, inter the sale by the holder of a Certificate of the enterprise or alia: any part of the undertaking carried on by the enterprise to (i) increasing employment opportunities in Namibia; a person not ordinarily resident in Namibia. (ii) providing for the training of Namibians; (3) Where, as evidenced by the Certificate, the foreign assets invested or to be invested in the enterprise constitute (iii) earning or saving foreign exchange; only a proportion of the total assets of the enterprise- (iv) generating development in the less developed (a) the provisions of paragraphs (a), (c) and (d) of areas of Namibia; subsection (1) shall apply only to the like proportion (c) the extent to which the enterprise in which the of the profits, proceeds of sale or sum, as the case proposed investment is to be made will contribute to may be referred to therein; the advancement of persons within Namibia who have (b) the provisions of subsection (2) shall apply only to been socially, economically or educationally the like proportion of the proceeds of sale referred to disadvantaged by past discriminatory laws and therein. practices or will facilitate the implementation of policies and programmes aimed at redressing social, (4) If, in the opinion of the Bank of Namibia, the amount economic or educational imbalances in the Namibian of foreign currency required to give effect to paragraph society; (c) or (d) of subsection (1) in respect of any enterprise would have a significant adverse effect on the external (d) the extent to which the enterprise in which the payments liabilities of Namibia, the appropriate foreign proposed investment is to be made will make provision currency may be made available by such number of for equal opportunities for women; instalments of such amounts and at such intervals as the (e) the impact which the activities of the enterprise in Bank of Namibia may determine. which the proposed investment is to be made is likely (5) The provisions of this section shall, until the date of to have on the environment and, where necessary, the publication of the notice referred to in subsection (2) of measures proposed to deal with any adverse section 18, have effect subject to the provisions of environmental consequences. Grant of a 7. (1) If the Minister is satisfied that the investment in Certificate of respect of which application for a Certificate is made will Status Investment promote the interests of Namibia, the Minister may issue 10 7 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 ACT NO. 27, 1990 FOREIGN INVESTMENT ACT, 1990 a Certificate in respect thereof. foreign currency, the proceeds of which formed part (2) Every Certificate shall state: of the foreign assets invested in the enterprise, and to pay, subject to the prior payment or the retention of (a) the name of the foreign national to whom it is granted; any tax which may be due thereon, the interest and (b) the name of, and give a description of, the enterprise service charges on such a loan as they fall due; in which the investment is or is to be made; (b) to pay licence fees and royalties to persons ordinarily (c) the amount or value of, and give a description of, the resident outside Namibia n respect of any intellectual foreign assets invested or to be invested and, if they property which is employed in connection with the have not yet been invested in the enterprise, the period enterprise, where such payments are due under an or periods within which they shall be invested; agreement which has been approved under any law relating to the transfer of technology or under an (d) the proportion of the foreign assets invested or to be agreement approved by the Minister, with the invested to the total assets of the enterprise, and where concurrence of the Bank of Namibia, and specified in the investment involves the acquisition of shares in a the Certificate. company, particulars of the shareholding; (e) that the implementation of such of the proposals (2) The provisions of subsection (1) shall, until the date forming part of the application for the Certificate as of publication of the notice referred to in subsection (2) are set out in the Certificate shall constitute an of section 18, have effect subject to the provisions of obligation of the holder of the Certificate and a subsection (1) of that section. condition of the continued validity of the Certificate; Availability of 9. (1) Notwithstanding the provisions of any other law but and foreign currency subject to subsections (3) and (4) of this section, the Bank for transfer of of Namibia shall ensure that there is available for purchase (f) such other matters as the Minister may deem necessary profits and by the holder of a Certificate, at the request of that holder, or expedient for the purposes of this Act. proceeds of sale convertible foreign currency which the holder may use (3) A notice by the Minister under section 3 (4) shall not without any restriction: affect the validity of any Certificate issued before the date (a) for the transfer out of Namibia of the profits of the of such notice in respect of any enterprise which is an enterprise or, where the enterprise is carried as a enterprise specified in such notice or which falls in any branch operation by a company which is a foreign category of business so specified, or any right, privilege national, for the payment to the head office of the or benefit accorded by this Act to the holder of such a company of remittances out of funds representing the Certificate. branch profits, after deduction or retention in either Availability of 8. (1) Notwithstanding the provisions of any other law, case of any tax due; foreign currency the Bank of Namibia shall ensure that there is available for certain for purchase by the holder of a Certificate, at the request (b) where an investment to which a Certificate relates is payments of that holder, freely convertible foreign currency which an investment in a company, for the payment to the holder may use without any restriction: shareholders or stockholders ordinarily resident outside Namibia of dividends out of the profits of the (a) to repay, in accordance with a schedule approved by enterprise, after deduction of any tax due; the Bank of Namibia, the principal sum of any loan in (c) where the enterprise or any part of the undertaking 8 9