Trade ministry executive director Sikongo Haihambo says Namibia is one of a few jurisdictions that still registers and regulates Close Corporations (CCs) as business entities.
Haihambo said other countries in the region and around the world had done away with the CC business model.
“The current legislation is based on a manual, paper-based registration process. Considering that the world has moved ahead to a digitised business landscape, the new legislation aims to conform to that landscape.
“The current legislation is outdated and highly legalistic, making it burdensome and costly to form and manage a company,” said Haihambo during Namibia’s corporate law reform summit 2023 hosted by the Chartered Institute for Business Accountants (CIBA) last week.
The proposed legislative overhaul is aimed at reducing costs associated with forming and maintaining a company through the transformation of the current manual, paper-based process to a digitised process.
The summit brought together various stakeholders to review key legislation aimed at removing bottlenecks in conducting business in Namibia.
Haihambo added that the ministry believes some of Namibia’s legislative framework, such as the Close Corporations Act and Companies Act, can contribute significantly to the improvement of the domestic economic landscape while shaping a clear legal business environment path for the country.
The proposed review of company registration is aimed at improving the ease of doing business in Namibia, to instil a culture of sound corporate governance, to inspire entrepreneurship, encourage investments and promoting the efficiency of companies and their management.
“The proposed overhaul is also aimed at reducing the costs associated with forming and maintaining a company through the transformation of the current manual, paper-based process to digitised process,” said the executive director.
The Business and Intellectual Property Authority (BIPA), in collaboration with the trade ministry, has since 2019 initiated the legislative reform process.
This included the review of the Companies Act, 2004 (Act No. 28 of 2004) and the Close Corporation Act, 1988 (Act No. 26 of 1988), in conjunction with other laws that may have an impact on business registration and regulation.
The thinking around the review is to consolidate the existing laws and in so doing, birth a single corporate business law that would regulate all forms of business entities, including aspects of business rescue and corporate governance.
Company law provides the anchor for economic growth and development to raise income, promote investment and create employment.
Earlier this year, trade minister Lucia Iipumbu said the reform of these laws has been necessitated by the need to adapt to current business needs.
“We have moved with speed to look at different mechanisms of reforming those acts to make the business environment conducive. The highlight is that we must do it with speed. Time is against Namibia, and we will remain behind. Our norm and process of crafting a policy takes three to four years, and this is concerning,” said Iipumbu at the time.