How to Register a Sole Proprietorship in Namibia

Setting up as an independent contractor in Namibia is especially appealing for its simplicity and low overhead. Known legally as a sole proprietorship, this structure is flexible, quick to establish, and allows one person to operate a business under their own name or a chosen trade name with minimal formalities. However, it does require navigating administrative steps like name reservation, registration, and biennial renewals, which can feel slightly bureaucratic.

The primary challenges include ensuring proper documentation and tracking the renewal schedule. That said, the freedom to make decisions quickly, control every aspect of your work, and incur only modest costs makes this model particularly attractive for freelancers and solo entrepreneurs.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Namibia?

In Namibia, the business structure is officially called a sole proprietorship. Depending on context, it may also be referred to as:

• Sole trader
• Self-employed worker
• Independent contractor

These all describe one person legally running a business without forming a company.

How does a sole proprietorship work in Namibia?

Sole proprietorship vs. other business structures in Namibia

While a sole proprietorship is the simplest way to run a business in Namibia, entrepreneurs may also consider alternatives like private companies or close corporations, which offer different levels of protection, cost, and formality.

Step-by-Step: How to register a sole proprietorship in Namibia

Step 1: Check eligibility

In Namibia, any adult with legal capacity to contract can register as a sole proprietor. This includes Namibian citizens, permanent residents, and, in most cases, foreign nationals who are legally allowed to conduct business in the country. Non-residents may need to comply with additional immigration or business permit requirements before they can trade.

Step 2: Choose your business name

You may use your own name or a trade name. To reserve a name, file Form CM5 with BIPA (fee: N$75). The reservation is valid for 60 days.

Step 3: Gather documents

You will need to provide the following documents:

• Completed Form CM8 (for sole proprietorship registration)
• Proof of name reservation (if using a trade name)
• Certified ID copy (or passport and declaration for foreigners)
• Contact details, such as address and telephone/email

Step 4: Register with BIPA

File your Form CM8 and documents online or at a BIPA office. The registration fee is N$300.

Step 5: Pay registration fees

The cost to register a sole proprietorship in Namibia includes N$75 for name reservation (if applicable) and N$300 for business registration, bringing the total initial cost to N$375. Information on the various business registration fees is available on the BIPA website.

Step 6: Post-registration obligations

After registering, sole proprietors must renew their business every two years using Form CM8A before the registration expires. In addition, they must maintain accurate accounting records and issue invoices that include mandatory details such as business name, registration number, date, invoice number, and client details—with VAT information added if the business is VAT-registered.

Financial and tax obligations for sole proprietors in Namibia

You are responsible for:

• Income tax: Sole proprietors are taxed as individuals, not companies. Business profits are declared in the owner’s personal tax return and taxed under Namibia’s progressive system (18%–37%). Returns are filed annually with the NamRA.
• VAT: If your annual taxable turnover exceeds N$500,000, you must register for Value Added Tax with NamRA. The standard VAT rate is 15% on goods and services, with exemptions and zero-rated categories applying in some sectors. VAT returns are typically filed every two months.
• Social security contributions: Sole proprietors are not automatically enrolled, but if you employ staff, you must register and contribute to the Social Security Commission. Contributions are calculated as a percentage of employee salaries, with minimum and maximum thresholds. If you work alone, you may opt into private pension or insurance schemes for retirement and health cover.
• Record-keeping: You must maintain accurate financial records, including invoices, receipts, and accounts, to support your tax filings. NamRA requires that records generally be kept for at least five years in case of audits.
• Tax deductions: While Namibia does not offer special deductions, ordinary business expenses (e.g., office supplies, travel, professional fees) are deductible if incurred wholly and exclusively for generating income. These deductions help reduce your taxable income.

Launch your contracting career and stay compliant with Deel

Registering a sole propriertorship gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required to start a sole proprietorship in Namibia?
None.

Do sole proprietors need to register for VAT?
Only if turnover exceeds N$500,000 annually.

How much are the ongoing contributions?
Biennial BIPA renewal (CM8A). Social security applies only if employing staff.

Can a sole proprietor hire employees?
Yes, but you must register with the Social Security Commission.

How long does registration take?
Usually, a few days if all documents are submitted correctly.

Can foreign nationals register a sole proprietorship?
Yes, foreign nationals can register a sole proprietorship, but you must also have the legal right to work in Namibia (such as a business visa, work permit, or permanent residency) before you can operate.

Do I need a separate business bank account?
Not legally required, but strongly recommended for accounting.

What happens if I stop operating?
You will need to file for deregistration with BIPA and settle final NamRA tax obligations.

Are there government incentives for new sole proprietors?
No dedicated incentives, but SMEs may access certain sectoral programs.

Can I use Deel as a sole proprietor to get paid?
Yes, Deel supports compliant payments from international clients.

Does Deel generate invoices for me?
Yes, Deel generates legally compliant invoices automatically.

Can Deel help with taxes?
Yes, with downloadable reports and payment records for NamRA filings.

Does Deel provide contracts?
Yes, Deel includes contract templates compliant with Namibian law.

Can I access benefits through Deel?
Yes, optional perks such as insurance and savings plans are available.