Last Updated on November 27, 2023 by Elidge Staff

Manufacturing business in Namibia: A Guide to Incentives and Opportunities

Introduction

Are you considering venturing into the world of manufacturing business in Namibia? This comprehensive guide will illuminate the path to success in the manufacturing sector of this beautiful African nation. Namibia offers a range of incentives and opportunities to bolster manufacturing enterprises and promote economic growth. Whether you’re a seasoned industrialist or a budding entrepreneur, this guide will equip you with the knowledge needed to thrive in Namibia’s manufacturing landscape.

an electrical engineer working on a circuit board — FAQs About Manufacturing Incentives in Namibia (manufacturing business in Namibia)

FAQs About Manufacturing Incentives in Namibia (manufacturing business in Namibia)

1. What Are the Key Policies Supporting Manufacturing in Namibia?

The manufacturing sector in Namibia is encouraged and supported by two key policies: the Foreign Investment Act (Act No. 24 of 1993) and the Export Processing Zones Act (Act No. 9 of 1995). These policies provide a framework for attracting investments and nurturing the manufacturing industry.

2. How Many Incentive Schemes Are Available for a Manufacturing business in Namibia?

Namibia offers three distinct incentive schemes to eligible manufacturing enterprises: the Registered Manufacturers Scheme, the Exporters Incentive Regime, and the Export Processing Zones (EPZ) regime.

3. What Is the Registered Manufacturers Scheme, and Who Can Benefit From It?

The Registered Manufacturers Scheme is designed for exporting enterprises that produce their goods within Namibia. Manufacturing businesses in Namibia can take advantage of a range of tax and non-tax incentives under this scheme.

4. Can you explain the exporter incentive regime in Namibia?

The Exporters Incentive Regime provides an 80% tax deduction on income derived from the export of locally manufactured goods, excluding meat or fish products. This scheme is intended to boost the export of Namibian products.

5. What Is the Export Processing Zones (EPZ) Regime, and How Does It Work?

The EPZ regime is the most comprehensive of the three schemes and targets export processing firms. Eligible manufacturers must export a certain percentage of their goods outside the SACU markets and meet registration requirements with relevant authorities.

6. What Are the Tax Benefits for a Manufacturing Business in Namibia Under the Registered Manufacturers Scheme?

Manufacturers under this scheme benefit from a corporate tax rate set at 18% for ten years. After this period, the rate reverts to the prevailing rate. Additionally, they receive an 80% allowance on income tax derived from exporting manufactured goods.

7. Are There Any VAT Exemptions for A Manufacturing business in Namibia?

Yes, manufacturers can enjoy VAT exemptions on the purchase and import of machinery and equipment, providing cost savings for their operations.

8. Is There Any Special Building Allowance for A Manufacturing business in Namibia?

Yes, the Special Building Allowance allows factory buildings to be written off at 20% in the first year and 8% for the next ten years. This incentive is available to manufacturers.

9. What Is the Transportation Allowance, and Who Is Eligible for It?

Manufacturers in Namibia can benefit from a transportation allowance, which provides a 25% deduction from the total cost of land-based transportation by road or rail.

10. Are There Any Incentives for Export Promotion Activities?

Manufacturers can receive cash grants equivalent to 50% of the direct cost of approved export promotion activities.

Investing in Namibia’s Manufacturing Sector

1. Thriving Manufacturing Environment

Namibia’s manufacturing sector is on an upward trajectory, thanks to its supportive regulatory framework and incentives aimed at attracting investments. The sector is poised for growth and expansion.

2. Tax Benefits

The favorable corporate tax rate of 18% for ten years, along with an 80% allowance on income tax from exports, translates to significant tax advantages for manufacturers. This allows you to maximize your profits and reinvest in your business.

person writing on white paper — VAT Exemptions (manufacturing businesses in Namibia)

3. VAT Exemptions (manufacturing businesses in Namibia)

VAT exemptions on machinery and equipment purchases not only reduce your initial capital outlay but also contribute to lower operating costs, enhancing the financial viability of a manufacturing business in Namibia.

4. Infrastructure and Connectivity

Namibia boasts a well-developed infrastructure, including road and rail networks, ports, and airports. This connectivity facilitates the smooth movement of goods and raw materials, enhancing the efficiency of your manufacturing processes.

5. Export Opportunities (manufacturing businesses in Namibia)

Namibia’s strategic location and access to export markets make it an ideal base for reaching international customers. The incentives for exporting manufactured goods further enhance your global competitiveness.

6. Cost-Effective Production

The transportation allowance and other incentives for manufacturing and production activities reduce operational expenses, enabling you to maintain competitive pricing in the market.

7. Economic Stability

Namibia’s stable economy and political environment create a secure investment climate for manufacturers. You can confidently plan and grow your business in this stable nation.

Seizing the Opportunity

Now that you’ve gained insight into the incentives and opportunities available for manufacturing businesses in Namibia, it’s time to take action. With a supportive regulatory environment, tax benefits, and access to export markets, Namibia presents a compelling proposition for investors in the manufacturing sector.

Don’t let this opportunity pass you by. Embrace the potential of Namibia’s thriving manufacturing sector, and embark on a journey to manufacturing success today!