Botswana corporate tax - guide for international expansion

Are you considering expanding your business operations to Botswana? Understanding the corporate tax landscape is crucial for making informed decisions about your investment in this stable Southern African nation.

Botswana offers a relatively straightforward corporate tax system with competitive rates that have attracted international businesses for decades. From diamond mining giants to emerging tech companies, understanding your tax obligations will help ensure compliance and strategic financial planning. Whether you're establishing a subsidiary or exploring new markets, having the right financial infrastructure is essential—and that's where Wise Business can help streamline your international payments and currency management.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Botswana Corporate tax rate in 2026

The standard corporate income tax (CIT) rate in Botswana is 22% for resident companies. Certain approved sectors, such as manufacturing companies and International Financial Services Centre (IFSC) companies, benefit from a preferential rate of 15%.¹

The country also maintains a withholding tax system for certain types of income paid to non-residents, with standard rates being: Dividends (15%), Interest (15%), and Royalties (15%). These domestic rates may be reduced by an applicable Double Taxation Avoidance Agreement (DTAA).²

Botswana determines corporate tax residency if a company's registered office or place of incorporation is in Botswana or if the company is managed and controlled in Botswana. Companies incorporated in Botswana are automatically considered tax residents, whilst foreign companies with their place of effective management in Botswana are also treated as residents for tax purposes.³

Botswana’s fiscal year runs from 1 July to 30 June. However, a business may elect to use its own accounting year. Companies must file their annual tax returns within four months after the end of their financial year.⁴

How to pay corporate tax in Botswana

Corporate tax payments in Botswana are administered by the Botswana Unified Revenue Service (BURS), which operates a comprehensive online tax system called the Integrated Tax Administration System (ITAS). All registered companies must use this digital platform for filing returns and making payments.⁵

For companies with an estimated annual tax liability exceeding BWP 50,000, the tax must be paid in four equal quarterly installments (known as Self-Assessment Tax or SAT) throughout the company's financial year. The first quarterly payment is due within three months of the start of the financial year.⁴

The annual income tax return must be filed, and any final balance of tax (a fifth payment) must be paid, within four months after the company's financial year-end. Companies with an estimated annual tax liability of BWP 50,000 or less are required to make a single payment for the full tax due at the time of filing the return, which is also within four months of the year-end.⁴

Late payment of any corporate tax amount, including SAT installments, attracts an interest charge of 1.5% per month or part of the month on the unpaid amount. Separately, there is also a penalty for the late submission of the corporate income tax return.⁶

For a company with an annual turnover of BWP 20.4 million (approximately £1.5 million at current exchange rates), assuming a profit margin of 10%, the taxable profit would be BWP 2.04 million. At Botswana's corporate tax rate of 22%, the annual tax liability would be:

BWP 2.04 million × 22% = BWP 448,800

When expanding your business to Botswana, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Botswana

To operate smoothly in Botswana, a country often ranked among attractive low corporate tax countries, small businesses must stay on top of their tax responsibilities. Here are some practical steps to ensure compliance:

• Keep accurate financial records: Maintain detailed records of all income, expenses, and transactions. Use accounting software for corporate tax prep and retain receipts, invoices, and bank statements for at least five years, as the Botswana Unified Revenue Service (BURS) requires. Proper records simplify return filing and protect you during audits.⁷
• Understand your tax obligations: Depending on your business size and structure, you may be liable for Corporate Income Tax, Value Added Tax (VAT) if your annual turnover exceeds BWP 1 million, Pay-As-You-Earn (PAYE) for employees, and Withholding Tax on certain payments such as dividends and royalties. Knowing which taxes apply helps avoid costly mistakes.⁷
• File returns on time: Corporate income tax returns are filed annually, VAT monthly or quarterly, and PAYE monthly. Missing deadlines can result in penalties, so set reminders or use tax management tools.
• Annual return filing: All companies must file annual returns in their registration month (with a few exceptions). Late filings attract a P500 penalty, and companies still in default by the 11th day of the following month risk being struck off the register, with restoration fees of P2,500.⁸
• Be prepared for audits: BURS can initiate audits any time within four years of the tax year in question. Keeping accurate records ensures you are ready if audited.

International Expansion to Botswana

Botswana combines political stability, low tax rates, and access to regional markets. All of this makes it an attractive destination for international expansion. The country’s population of 2.63 million may be small, but its central location in southern Africa allows businesses to tap into a broader SADC marketplace of over 292 million people. Investors also benefit from Botswana’s membership in the Southern African Customs Union. This ensures duty-free access to South Africa and neighbouring states.^{9 10}

Moreover, diamonds anchor the economy, but government initiatives under Vision 2036 and the National Transformation Strategy are diversifying opportunities in energy, manufacturing, agriculture, and tourism. Credit agencies such as S&P and Moody’s affirm Botswana’s investment-grade ratings, signalling long-term macroeconomic stability.⁹ The country also has one of the most literate workforces in Africa, where English is widely spoken.¹¹ It has business-friendly reforms, such as digitised border posts, online work permit applications, and e-identification systems, which support efficiency.

Taxation is another advantage. The Botswana corporate tax rate is 22% for most businesses but drops to 15% for manufacturing and International Financial Service Centre (IFSC) companies. Corporate tax credits and treaties with countries like South Africa, the UK, and France further reduce the burden on international investors.¹²

To remain compliant, businesses must register for a corporate tax account and meet the corporate tax registration deadline. Unlike many countries grappling with the global minimum corporate tax rate, Botswana’s regime remains highly competitive, offering full remittance and repatriation of profits and dividends.

Here’s what you should do when setting up your business in Botswana:¹³

1. Begin with market research and a clear business plan.
2. Secure a business name, location, and legal structure.
3. Register with the Companies and Intellectual Property Authority.
4. Obtain a Tax Identification Number from the Botswana Unified Revenue Service.
5. Open a company bank account to complete registration.

Therefore, its comparatively affordablecost of living further reduces operating expenses, adding to the appeal of a skilled workforce and competitive tax regime.

Incorporation of Business in Botswana

Starting a company in Botswana involves several formal steps, overseen mainly by the Registrar of Companies under the Ministry of Trade and Industry. Once approved, the name is reserved for 30 days. Then, follow these steps:¹⁴

• Sign a declaration of compliance: File the required forms, including shareholder and director consents, auditor details, and particulars of a licensed company secretary. Under the Companies Act, only registered professionals (lawyers or accountants) may act as secretaries.
• Register the company: Submit the application form, name reservation certificate, and declaration of compliance to the Registrar of Companies.
• Advertise intent to apply for a license: Publish notices in two consecutive issues of the Official Gazette.
• Premises inspection: The Health, Environment, and Town Planning departments will inspect the company premises to ensure compliance with standards.
• Obtain a license: Apply for an industrial (Industrial Affairs Department) or a trade license (Gaborone City Council).
• Register for taxes: Obtain a Tax Identification Number (TIN) from the Botswana Unified Revenue Service (BURS). If employing staff, also register for Pay-As-You-Earn (PAYE).
• Register for VAT: All new businesses must sign up for VAT with the Department of Customs & Excise.
• Arrange workplace injury insurance: Provide coverage under the Workers Compensation Act, either through a private insurer or by depositing security with the Commissioner.

Business Entities in Botswana

Botswana’s Companies Act recognizes several types of entities:^{15 16}

• Sole Proprietorship: Owned by one person with unlimited liability. Easy to set up but riskier for personal assets.
• Partnerships: Can be general or limited, with partners sharing profits and liabilities. Limited partners are only liable up to their investment.
• Private Companies: Either limited by shares or guarantee. They require at least one director and shareholder (or member).
• Limited Liability Companies (LLCs): Popular with SMEs, these protect owners’ personal assets while offering operational flexibility.

In conclusion, Botswana doesn’t revolve around natural beauty. It boasts a stable democracy, welcoming communities, and a relatively affordable cost of living. For newcomers, this combination makes it an attractive and practical choice for settling down.

International corporate tax best practices

Successful international tax management requires a strategic approach that balances compliance with efficiency. Companies operating across multiple jurisdictions should establish robust systems for tracking obligations and deadlines in each country where they have tax liabilities.

Maintaining detailed and accurate financial records is fundamental to international tax compliance. This includes proper documentation of transfer pricing arrangements, intercompany transactions, and the allocation of income and expenses across different jurisdictions. Many countries, including Botswana, are implementing stricter documentation requirements as part of global initiatives to combat tax avoidance.

Understanding and leveraging double taxation agreements (DTAs) can significantly reduce overall tax burdens. Botswana has signed DTAs with several countries, including South Africa, the United Kingdom, France, and India, which can help prevent the same income from being taxed in multiple jurisdictions. These agreements often provide reduced withholding tax rates and can offer protection against double taxation through credit or exemption mechanisms.

Companies should also stay informed about international tax developments, particularly the OECD's Base Erosion and Profit Shifting (BEPS) initiatives and Pillar Two global minimum tax rules. Whilst Botswana has not yet implemented Pillar Two, the evolving international tax landscape means businesses should prepare for potential changes that could affect their global tax strategies.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Botswana efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

FAQs - Corporate tax in Botswana

Who is liable for corporate tax in Botswana?

All companies incorporated in Botswana are liable for corporate tax on their worldwide income. Foreign companies are liable for tax on income sourced in Botswana, including income from a permanent establishment or branch operations. Partnerships and trusts may also be subject to corporate tax depending on their structure and activities.

Are there any tax incentives for businesses in Botswana?

Yes, Botswana offers several tax incentives to promote investment and economic diversification. The International Financial Services Centre (IFSC) provides reduced tax rates for qualifying companies engaged in international business. Manufacturing companies may qualify for accelerated depreciation allowances, and companies in designated development areas can access various tax holidays and reduced rates.

What is the tax treatment of dividends in Botswana?

Dividends paid by Botswana companies to residents are generally exempt from tax in the hands of the recipient. However, dividends paid to non-residents are subject to withholding tax at 7.5%, which may be reduced under applicable double taxation agreements. Companies receiving dividends from foreign subsidiaries may be able to claim foreign tax credits.

What is the process for registering for corporate tax in Botswana?

Companies must register for corporate tax with BURS within 30 days of commencing business operations. The registration process requires submission of incorporation documents, details of business activities, and appointment of a tax representative if the company is non-resident. Registration can be completed online through the ITAS system.

What are the common pitfalls to avoid regarding corporate tax in Botswana?

Common mistakes include failing to register for provisional tax, missing filing deadlines, inadequate record-keeping, and incorrect classification of income and expenses. Companies should also ensure proper documentation of related-party transactions and be aware of transfer pricing requirements. Regular consultation with local tax advisors can help avoid these pitfalls and ensure ongoing compliance.

Sources used in this article:

1. PwC Tax Summaries: Botswana Taxes on Corporate Income
2. PwC Tax Summaries: Botswana Withholding Taxes
3. PwC Tax Summaries: Botswana Corporate Residence
4. PwC Tax Summaries: Botswana Tax Administration
5. Botswana Unified Revenue Service (BURS): E-Services Login Portal
6. BURS: Tax Payments Information
7. Entrepreneurs.co.bw: How to Stay Tax Compliant as a Small Business
8. Companies and Intellectual Property Authority (CIPA): Annual Returns FAQ (PDF)
9. U.S. Department of State: 2024 Investment Climate Statements - Botswana
10. AWEX: Doing Business in Botswana (PDF)
11. Mauritius Trade: Investing in Botswana Market Intelligence
12. Botswana Investment and Trade Centre (BITC): Why Invest in Botswana
13. World Bank: Doing Business in Botswana Data (Archived)
14. Botswana Trade Portal: Starting a Business in Botswana Guidelines (PDF)
15. CIPA: Companies Act (PDF)
16. AFSIC: Overview of Company Types in Botswana

Sources last checked 08/10/2025