A foreign shareholder takes a dividend out of Namibia through an authorised dealer, which is a commercial bank, after the Namibian company withholds non resident shareholders' tax of 10% or 20%, which it pays to NamRA by the 20th of the following month. The Bank of Namibia's manual allows the transfer when it is in proportion to the shareholder's share of the company.
Who controls the transfer?
Exchange control sits with the Ministry of Finance, which has largely delegated it to the Bank of Namibia. Every request for foreign exchange has to be made through an authorised dealer. The Bank's FAQ states that a contravention of the Exchange Control Regulations carries a fine of up to N$250,000, imprisonment of up to five years, or both.
For each cross border payment the company completes an integrated form at the bank, and its declaration consents to the information going to the tax directorate and the Financial Intelligence Centre.
What does the Bank of Namibia require for a dividend?
Section 10.1 of the manual says income due to non residents of the Common Monetary Area may be transferred offshore if the dividend, profit or income distribution is in proportion to the non resident's shareholding or ownership. The manual also records that income due to non residents on their securities is freely transferable.
Does the Common Monetary Area change anything?
The Common Monetary Area covers Lesotho, Namibia, South Africa and Eswatini. The manual says N$ transfers to or from the other member countries do not need the approval of the Bank's exchange control department. Tax is a separate question. Section 42 reaches a company that is neither managed nor controlled in Namibia, so a South African parent managed from South Africa pays non resident shareholders' tax too.
What tax is paid on the dividend, and by whom?
Under section 45 the rate is 10% if the beneficial owner is a company holding at least 25% of the capital of the paying company, directly or indirectly. In all other cases the rate is 20%. That includes individual shareholders.
The tax is paid on the 20th of the month following the month in which it was deducted (section 43). Section 44 makes the company declaring the dividend responsible for paying it, and the company may recover it from the shareholder. Late payment attracts a penalty of 10% of the tax for each month or part month, capped at the tax, plus interest at 20% a year.
Can a tax treaty lower the rate?
Section 100 of the Income Tax Act gives effect to Namibia's double tax agreements, and NamRA lists agreements with, among others, Botswana, France and Germany. Whether a treaty reduces the 10% or 20% depends on its dividend article, so we read the treaty for the shareholder's home country before a dividend is declared.
Andersen view
Two steps run together. The company withholds the shareholders' tax and pays it to NamRA by the 20th of the following month, and the bank releases the foreign currency through the authorised dealer. Groups that treat the bank step as the whole job meet the tax step late, with a penalty attached.
The Budget Statement of 2025-03-27 also announced a 10% dividend tax from 2026-01-01. It did not say who it applies to, and as at 2026-10-15 it is not in the Act. Non resident shareholders' tax under section 45 is unchanged. We confirm the rate in force on the declaration date before any payout is scheduled.
Frequently asked questions
What if the dividend is not in proportion to shareholdings?
Proportion to shareholding is a stated condition in section 10.1. A non proportional distribution falls outside it, so raise it with us before declaring.
Who is liable if the shareholders' tax is not paid?
The company declaring the dividend, under section 44, together with the penalty and interest in section 43.
Is the rate different for an individual shareholder?
Yes. The 10% rate applies only where the beneficial owner is a company holding at least 25% of the capital. An individual pays 20%.
Andersen in Namibia prepares the dividend resolution, calculates and pays the shareholders' tax, reads the treaty for your home country and assembles the bank pack, so the authorised dealer receives a complete file. Contact Andersen in Namibia: WhatsApp +264 81 315 7942, info@na.andersen.com, +264 61 402520 or na.andersen.com.
