International Banking

International Banking refers to banking transactions denominated in various foreign currencies, that cross national boundaries and includes international lending and deposits. Banking entities within the Botswana IFSC can provide among others, corporate, international, investment and merchant banking including leasing finance, asset management, stock broking and treasury services from a Botswana-based platform.

Banks that have succeeded in their domestic markets and established a relatively high market share will be faced with the decision of whether to continue investing in growing their domestic market share or to expand into other African countries with similar environments where they can replicate their tried and tested banking models.

In view of the investment and economic construction opportunities that exist in the Emerging Markets, International Banks can significantly impact on the local economy to act as catalysts for the development and nurturing of these markets.

As a result of the favorable domestic market, regional and international banks can utilize the Botswana IFSC framework as a platform to tap into the emerging markets of Sub Saharan Africa. Botswana IFSC Banks have the opportunity to leverage the potential in the domestic market by establishing a meaningful presence in Botswana to provide a range of cross-border financial services to institutional investors and corporate clients in the region.

Permissible activities

The combination of the Botswana IFSC platform and current market dynamics present a unique value proposition to Banks looking to penetrate new markets or consolidate their market position. Specifically, Botswana IFSC Banks can provide among others the following products and services to their clients:

• International and Investment Banking  - trade finance, correspondent banking and offshore finance
• Project and Export Finance – infrastructure and  goods
• Acquisition and Leveraged Finance – corporate and  leveraged buy-outs
• Commodity trade finance
• Private Equity transactions involving funds from international investors
• Structured Trade and Financial advisory services

The provision of such services to regional clients from Botswana is also facilitated by a thriving domestic financial sector, which includes banks, insurance companies and a growing stock market. In addition, Botswana-based telecommunications service providers offer industry-specific solutions that are secure and reliable including:

• International Private Leased Circuits (IPLC) as dedicated services for linking a banks regional and international offices
• Internet Protocol Virtual Private Network (IPVPN) used for linking a banks local operations with international destinations

Regulatory Framework

The Bank of Botswana Act (1999) designates the Bank of Botswana as the regulatory authority to license, supervise and regulate all international banking activities.

Legal Structures

In order to be certified under the Botswana IFSC, an entity should either be a Botswana registered company or undertake to register a company upon approval of their business plan by the Certification Committee. There are no requirements to have resident shareholders in an IFSC accredited company. However, according to the Companies Act (2004), at least one Director should be resident in Botswana.

Supervisory Fees

In accordance with Sections 6(1) a and 6(7) of the Banking Act (CAP46:04) the Bank of Botswana levies the following fees for banking entities:

• License Application Processing Fee BWP15,000
• Annual License Renewal Fee BWP50,000

The current business environment created by the Botswana IFSC enables banks to strategically position themselves from/in Botswana to take advantage of regional stability, sustained growth and increased private sector investments into the region.

Click here to download the International Banking Brochure.

Success Stories

ABN AMRO Bank, the 12th biggest bank in the world based on total assets (2007) has establishing an Offshore Banking Unit known as ABN AMRO Botswana OBU Ltd (“AABW OBU”), through the certification of Botswana IFSC to serve their South African regional clients. ABN AMRO’s objective is to create a “regional hub” through the ABN AMRO units mainly operating International Diamond & Jewelry business unit. The International Diamond & Jewelry (ID&JG) is a specialist provider of financial services to commercial clients and SMEs (Small and Medium Enterprises) in the global diamond & jewelry industry and the new Botswana operations will leverage off the global ABN AMRO processes, expertise, established client relationships, positive industry developments and the growth potential in the Southern African market.

ABC Holdings is a banking group originating out of Zimbabwe. The company has been given two tax certificates, the first for a banking operation and the other certificate allows the bank to operate as a holding company that provides financial and other support services to its subsidiaries.

Kingdom Bank African Limited acquired a banking license for cross-border business under the auspices of the Botswana IFSC in August 2003. Kingdom Bank Africa Limited is a diversified financial services group listed on the Zimbabwean Stock Exchange.

Banking Regulation and Legislation

• Banking (Anti-money laundering) Regulations 2003