Skip to content

Namibia: Beneficial ownership and external companies – does the Companies Amendment Act apply?

24 October 2023
– 10 Minute Read


Share on LinkedIn


  • A recent startle in the business sector has been caused by none other than the amendment to the Companies Act 28 of 2004 (Companies Act).
  • This article examines the amendments to the Companies Act; considers the provisions regulating external companies; discusses the implications of non-compliance with the amendments; and ventures into further provisions of the Companies Act.

A recent startle in the business sector has been caused by none other than the amendment to the Companies Act 28 of 2004 (Companies Act). It has caused confusion for businesses all over as to whether the amendments, specifically the new beneficial ownership information requirements, are applicable to them.

The particular amendment in question, is the insertion of section 122A to the Companies Act. Section 122A requires ‘companies’ to keep up-to-date registers of their beneficial owners as well as provide beneficial ownership information to the Business and Intellectual Property Authority (BIPA).

The question then arises whether multinational companies with local branches in Namibia, in other words external companies, must also comply with section 122A. The Companies Act clearly distinguishes between ‘companies’ and ‘external companies’. However, BIPA’s beneficial ownership forms makes a special space available to tick, ‘foreign entity’.

This further begs the question as to what BIPA means by ‘foreign entity’ and what the actual intention is of the Legislature. To resolve the above questions and confusion, this article examines the amendments to the Companies Act; considers the provisions regulating external companies; discusses the implications of non-compliance with the amendments; and ventures into further provisions of the Companies Act.

The Companies Amendment Act

On 21 July 2023, the Companies Amendment Act 4 of 2023 (Companies Amendment Act) was published in the Government Gazette (GG No. 8137; GN No. 209), which had the effect of inserting certain definitions and provisions to the Companies Act. On the same date, the Close Corporations Act was amended by virtue of the Close Corporations Amendment Act 5 of 2023. For purposes of this article, only the amendment to the Companies Act will be discussed.

In terms of the Companies Amendment Act, one particular addition to the Companies Act is section 122A titled, ‘Register of beneficial owners’. This section, in brief terms, requires companies to maintain an accurate and up-to-date register of the beneficial owners of the company and that such register must be kept in Namibia at the same office at which the register of members is kept.

However, section 122A additionally requires that every company must file, at BIPA, accurate and up-to-date information of the beneficial owners of the company. The definition for ‘beneficial owner’ has, accordingly, also been inserted into the definitions section with the Amendment, but states that ‘beneficial owner’ shall have the meaning ascribed to it in section 1 of the Financial Intelligence Act 13 of 2012 (FIA). FIA makes provision in the definition of ‘beneficial owner’ for a whole list of natural persons that would qualify as the beneficial owner, but it in essence refers to the natural person who ultimately owns or exercises effective control over the company.

BIPA issued a Directive (Registrar Directive 01 of 2023) on 24 July 2023 in terms of which it is explained that this beneficial ownership information must be provided to BIPA on the Form BO1. This BO1 form typically requires all natural persons who may be regarded as beneficial owners to provide information including their full names, date of birth, identification number, addresses (business, residential, postal), contact details, email address as well as the nature and extent of their beneficial ownership.

However, one of the first things that must be filled out on the form is the type of entity this information is provided for. There are five options listed, namely ‘public company (Ltd)’, ‘private company ((Pty) Ltd)’, ‘section 21 company (NGO)’, ‘close corporation’ as well as ‘foreign entity’.

One would be quick to assume that ‘foreign entity’ refers to a company that was not incorporated in Namibia. However, this is where the difficulty comes in. Nowhere in the Companies Act, Companies Amendment Act or even the Business and Intellectual Property Authority Act 8 of 2016 (BIPA Act) is the term ‘foreign entity’ defined.

The question is, therefore, whether BIPA actually meant, ‘external company’ instead of ‘foreign entity’; but then why use the term ‘foreign entity’ in the first place? This distinction may seem irrelevant but is in fact of great significance.

External companies under the Companies Act

An ‘external company’, according to section 1 of the Companies Act, refers to a company or other association of persons that is incorporated outside of Namibia, and which has a place of business in Namibia.

The Companies Act, in other words, allows ‘foreign’ companies to register a branch within Namibia and in terms of which the foreign company would be called an ‘external company’. External companies are regulated by Chapter 13 of the Companies Act, which sets out the duties and obligations of such entities.

The definition of ‘company’ in section 1 of the Companies Act, on the other hand, refers to a company incorporated under Chapter 4 of the Companies Act, which chapter then regulates the formation of such companies.

Apart from the distinction made in terms of the definitions, another distinction is made between these types of companies in section 328(2) of the Companies Act. Section 323(2) specifically states that BIPA must distinguish the registrations of external companies from the registrations in respect of companies incorporated in Namibia (i.e. Chapter 4 companies).

If the Companies Act makes a clear distinction between the definitions, registrations and regulation of the different types of companies, and the new section 122A only requires compliance from ‘companies’ (and not ‘external companies’) then why did BIPA include ‘foreign entities’ in its BO1 Form?

Non-compliance with beneficial ownership requirements

In the Directive issued by BIPA, notice is given that as from 7 August 2023 applications for the registrations of new companies must accompany the required beneficial ownership form. Existing companies, on the other hand, must before 7 August 2024 have up-to-date beneficial ownership information submitted or must submit such information on the next submission of an amendment of the registered company or on the lodgment of their annual return. No new applications or amendments will be accepted without the submission of such information.

Non-compliance with the above requirements and failure to keep a register could result in companies being liable to administrative fines and penalties. For example, companies could be liable to a fine not exceeding NAD 50 000 in terms of section 122A(14). Non-compliance will also result in the registered company to be put on an inactive list for six months, after which it will be deregistered by BIPA.

This is, however, not the end of the matter. Section 122A(18) states that a company or person who fails or contravenes to comply with the beneficial ownership requirements commits an offence and is liable on conviction to a fine not exceeding NAD 10 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and imprisonment.

It is, therefore, not merely a matter of quick advice over an email to your multinational client that they do not have to comply with BIPA’s request for beneficial ownership information because of its registration as an external company. The penalties set by the Companies Amendment Act are too severe to be taken lightly.

The functions of BIPA

What is then to be done if the person at the BIPA front desk argues with you about your external company, or ‘foreign entity’ rather? The Directive issued by BIPA provides a possible answer. The Directive states that BIPA is established in terms of section 3 of the BIPA Act and that BIPA is, ‘the focal point for the registration of business and industrial property and is responsible for the administration and protection of business and intellectual property’.

Section 3 of the BIPA Act indeed establishes BIPA; however, one additional provision left out from the Directive states that BIPA must exercise and perform its powers and functions in an efficient and effective manner (section 3(2)(b)).

Section 5 of the BIPA Act then sets out the multiple functions of BIPA and states in subsection (e) that BIPA must maintain accurate, current and relevant information concerning business and intellectual property. However, subsection (k) states that BIPA is obliged to perform any functions imposed on it by or under the BIPA Act and applicable legislation as well as monitor compliance with the BIPA Act and applicable legislation.

This means that BIPA cannot only choose to comply with its functions under the BIPA Act in maintaining accurate information concerning businesses, but must also comply with other applicable legislation (i.e. the Companies Act). Therefore, if the Companies Act and Companies Amendment Act only requires companies incorporated in Namibia to maintain registers with up-to-date beneficial ownership information and to submit such information to BIPA and not external companies, then BIPA can only monitor compliance by ‘companies’. BIPA can then certainly not act beyond its statutory powers by requesting beneficial ownership information from external companies.

Too good to be true?

If this sounds ‘too good to be true’, then one can additionally consider sections 141 to 146 of the Companies Act. It is stated in section 141 that for purposes of sections 142 to 146, the term ‘company’ includes any issuer of a security and ‘security’ refers to any listed security as defined in section 1 of the Stock Exchanges Control Act 1 of 1985.

In other words, in any other section of the Companies Act (apart from section 142 to 146), the term ‘company’ does not include an ‘issuer of a security’. The point to be made is that here the Companies Act specifically includes a certain type of entity into the definition of ‘company’ in order to make certain provisions applicable to those types of entities.

Therefore, one has to consider that should it have been the intention of the Legislature to make the beneficial ownership requirements applicable to external companies as well, there should have been another insertion by the Companies Amendment Act to state that for purposes of section 122A, the term ‘company’ shall include external companies.

However, no such amendment was made by the Companies Amendment Act and accordingly, it cannot be assumed that the intention of the Legislature was to include external companies.


The purpose of this article was to examine whether the recent amendments to the Companies Act, specifically the insertion of section 122A, is applicable to external companies. Section 122A, as explained, requires ‘companies’ to keep up-to-date registers of their beneficial owners as well as to provide beneficial ownership information to BIPA. BIPA has specifically created a form for this purpose, the BO1 form.

However, the Companies Act makes a clear distinction between ‘companies’ and ‘external companies’, and the Companies Amendment Act seems to only require compliance with section 122A from ‘companies’ and not ‘external companies’. BIPA, on the other hand, requires compliance from both companies and ‘foreign’ entities on its BO1 form.

This discrepancy – between legislation and BIPA – has severe consequences for multinational entities with local branches in Namibia – in the event section 122A applies and has not been complied with.

Therefore, this article endeavoured to examine and resolve this discrepancy and now submits by virtue of the provisions of the BIPA Act, and the specific definitions and provisions contained in the Companies Act, that the new beneficial ownership requirements of the Companies Amendment Act does in fact not apply to external companies.