Almost all Namibians are affected by Foreign Exchange Regulations in one way or another. Here are a few tips on how to comply with such regulations.
1. What is Exchange Control and how does it affect me?
Exchange control involves measures to directly control or influence the inflow and outflow of capital over the country’s borders. Exchange Control Regulations limit the purchase and sale of foreign currency by Namibian citizens.
As an ordinary citizen, one would be affected by the controls when one is travelling, giving cash as a gift to someone outside the Common Monetary Area (CMA), or wishing to pay for something ordered from outside the CMA or abroad, e.g. books, cars etc.
2. What is the Common Monetary Area (CMA)?
The Republic of Namibia, Kingdom of Lesotho, South Africa and Kingdom of Swaziland are collectively known as the Common Monetary Area. There are no trade and Exchange Control restrictions between these countries and similar exchange control policies are applied by all CMA member countries, that is, the exchange control policies followed in the four (4) member countries should be consistent.
It is also worth noting that generally exchange controls apply mostly to residents whilst, non-resident investors’ equity investments in Namibia are not subject to exchange control restrictions.
3. Why are Controls Necessary?
Exchange Control is not only used to discipline the local demand for foreign currency in order to protect the country’s foreign exchange reserves, but also to allocate available foreign currency in the best interest of the country as a whole.
4. Who is responsible for the Administration of Exchange Control in Namibia?
Exchange Control is the responsibility of the Ministry of Finance, which has largely delegated this authority to the Bank of Namibia (“the Bank”). The Bank has, in turn, delegated several of these functions to the Authorised Dealers. The major function of the Authorised Dealers that is, commercial banks authorised to deal in foreign currency, is to assist the Bank with the administration of exchange controls.
All requests/applications for foreign exchange have to be made through the Authorised Dealers. In practice, foreign exchange accruing to the Namibian public is sold to the commercial banks authorised to deal in foreign exchange.
The regulatory structure of exchange control therefore comprises the Ministry of Finance, the Exchange Control Division of the Bank of Namibia and the Authorised Dealers as well as the Authorised Dealers with Limited Authority (ADLA).
5. Who are the banks appointed as Authorised Dealers in Exchange in Namibia?
There are currently four (4) Authorised Dealers (AD) and six (6) Authorised Dealers with Limited Authority (ADLA) namely:-
(i) Bank Windhoek Ltd
(ii) Nedbank Namibia Ltd
(iii) First National Bank of Namibia Ltd
(iv) Standard Bank Namibia Ltd
Authorised Dealer with Limited Authority (ADLA)
The ADLAS below are also referred to as Bureau de Changes:
(i) Casa de Cambio Forex (Pty) Ltd.
(ii) Magnet Bureau de Change (Pty) Ltd.
(iii) Namibia Bureau de Change (Pty) Ltd.
(iv) Novacambios Namibia (Pty) Ltd.
(v) Oshikango Bureau de Change (Pty) Ltd.
(vi) United Bureau de Change (Pty) Ltd.
6. What are the normal procedures to be followed when a person wants to make payment/transfer abroad?
The following are the procedures:
Individuals must approach an Authorized Dealer of their choice for all foreign exchange related needs.
Positive identification in the form of Passport or Identity Document must be presented when dealing in foreign exchange transactions.
Where required, suitable documentary evidences e.g. invoice must be submitted in support of foreign exchange sales or purchases.
Dealings in foreign currency must only be done at Authorized Dealers i.e. Commercial Banks and Bureau De Changes.
In terms of the Exchange Control Regulation 2(1), it is illegal for unauthorized person to buy or sell foreign currency in Namibia.
7. What is the prescribed currency for trade between persons or companies within Namibia and/or CMA countries?
Trade within Namibia should strictly be done in local currency, i.e. Currency which is legal tender in Namibia (Namibia Dollar and Rand). In terms of Exchange Control trade between CMA member countries should equally be done in local currency.
Settlement of transactions with countries outside the CMA must be in foreign currency or Namibia Dollar from local non-resident account.
Customers must however first contact their bankers to establish which currencies the banks are prepared to negotiate.
8. How do I get spending money for a trip overseas?
Namibian residents are eligible for the single discretionary allowance of an amount not exceeding N$ 1 000 000 (One Million Namibia Dollar) per calendar year, for the specific purposes of travel, gifts, donations and maintenance. It implies that, a person is allowed to take out an amount in foreign currency equivalent to N$ 1 000 000-00 mentioned above per adult and an additional N$ 200 000-00 per child under the age of 12 in respect of travel outside the CMA. It should be noted that, Namibian residents (natural persons) who are under the age of 18 years may not be accorded the above-mentioned single discretionary allowance but may be accorded the travel allowance as indicated above.
The travel allowance is only valid for one calendar year and is applicable for both business and holiday travel. This allowance may be taken in the form of either a traveller’s cheque and/or cash.
Foreign currency is normally granted by the commercial bank or Bureau de Change handling the transaction. The arrangement to acquire foreign currency in respect of travel allowance may be made not more than 60 days prior to the anticipated departure date.
9. What documentation needs to be presented to the Bank when issuing my travel allowance?
You are required to present your valid passport and air ticket confirming the journey to be undertaken. The Authorised Dealer is required to endorse( stamp) your air ticket with the Namibia Dollar equivalent amount of foreign currency issued with the words “Exchange “Provided”.
10. Can I invest in Europe any money left from my trip overseas?
No, your travel allowance may only be used for travel purposes, e.g. hotels, transport etc. You are required to sell the currency back to a registered dealer within 30 days of your return. Therefore, if you travel overseas again on holiday you can buy back the remaining balance of your travel allowance for your next trip. The amount will be recorded in your air ticket.
11. What is the permissible NAD amount each traveller is allowed to export outside the CMA?
Every person, proceeding abroad may take with them up to N$ 10 000 banknotes per trip. This amount is not regarded as forming part of your authorised travel allowance as it is intended to meet all of your immediate needs upon your return or pay for customs duties hotels, travel, etc.
12. Can I use my credit card overseas?
Yes, you can put up to 100% of the authorised, prescribed or available travel allowance applicable to your journey on your credit card.
Additionally, credit cards may be used to pay for miscellaneous imports over the internet within the limit of N$ 20 000-00 per annum.
13. Does the cost of a passenger ticket reduce the available travel allowance?
No, provided the journey commences from Namibia and is paid for in local currency (i.e. Namibia Dollar and/or Rand).
14. Can I support my child studying overseas?
Namibian residents proceeding to study abroad on a full-time basis may be granted foreign exchange to meet the cost of tuition, maintenance and other incidental expenses. The full tuition and academic fees may be permitted against production of a letter of admission. In addition they may avail of a yearly amount of up to N$ 1 000 000-00 to cover travel expenses during vacations.
15. Can funds be transferred abroad in payment of either obtaining a visa or renewing foreign passport?
Yes, on presentation to an Authorised Dealer of original documentary evidence confirming the amount involved which does not form part of your travel allowance.
16. Can I Transfer Funds Abroad for Tours Organised Abroad for me by Travel Agents?
Yes. However, the expenses incurred will reduce the amount available against your travel allowance.
17. How much Foreign Currency in Cash or Otherwise are Foreign Visitors or Tourists Permitted to bring into Namibia?
Nationals of countries outside the CMA visiting Namibia temporarily/tourists are permitted to bring in any amount of foreign currency and re-export unspent portion thereof without any restrictions.
Equally, they are allowed to exchange their foreign currency freely at any Commercial Bank or Bureau de Change or pay for services rendered or goods purchased at some selected enterprises that have been authorized for that purpose.
Such persons may be granted foreign exchange only if the commercial bank or Bureau de Change (AD) is satisfied from documentation that the amount applied for forms part of foreign currency initially imported into Namibia or alternatively, it represents the unspent portion of the proceeds of foreign exchange imported and exchanged in Namibia.
It is therefore of utmost importance that visitors/tourists must retain copies of receipts as proof of foreign exchange to enable them to buy back foreign currency at the time of departure from Namibia should they have unspent portion of funds initially introduced.
In terms of Exchange Control and Customs Regulations visitors to Namibia are required to declare the money in their possession at the point of entry into or exit from Namibia.
18. Is it possible to receive travel allowance if I leave at end of one year, and then return the next year?
No, if your visit extends from one year into the next you may not receive the second year’s facilities until you have returned to Namibia.
19. Is there limits on any personal effects or jewellery that I wish to take with me on holiday?
The insurance value of goods must not exceeds N$ 50 000 per person. Should the value of the goods taken exceed N$ 200 000, approval must be obtained from the Bank of Namibia.
20. What documentation is required in that regard?
An Exchange Control Declaration through the Form NEP obtained from an Authorised Dealer must be completed and must be attested on your behalf.
21. What is the purpose of this form?
The purpose of the Form NEP is to control the export of goods not for sale abroad. This will immunise you against paying customs duties on your belongings when returning to Namibia.
22. What must I do with any surplus foreign currency upon my return from overseas?
You are required to sell such currency back to (the Authorised Dealer) your banker within 30 days of your return.
23. Are Namibian residents allowed to Invest offshore, if yes, what is the Permissible amount for such investment?
Yes. Provided that any natural person has met certain criteria such as the main one being the obtaining of a Tax Clearance Certificate from Inland Revenue, private individuals may invest in a foreign country (offshore) up to a maximum of N$4 Million per person, per annum. Additionally, with the approval of Bank of Namibia, investment into a holiday home in a Southern African Development Community (SADC) country may also be made. Foreign earned income may be retained offshore. This does not apply to the proceeds from exports.
24. What is the penalty for contravening Exchange Control Regulations?
In terms of Exchange Control Regulations, every person who contravenes or fails to comply with any provision of these Regulations shall be guilty of an offence and liable upon conviction to a fine not exceeding Two Hundred and Fifty Thousand Namibia Dollars (N$ 250 000) or to imprisonment for a period not exceeding five years (5) or both.