Do I Need a Local Entity to Hire in Namibia?

In Namibia, a "local entity" refers to a recognized business presence that allows you to act as an employer, typically a subsidiary or branch office. This setup is essential for fulfilling local payroll and employment obligations, ensuring compliance with Namibian law.

Without a local entity, you can't effectively manage payroll, register as an employer, or comply with mandatory employment protections. An Employer of Record (EOR) can serve as a solution, allowing you to hire employees without the complexities of establishing a local entity.

What is Required to Employ Someone in Namibia?

• Local employing entity required to directly employ? Yes (You must register with the Ministry of Industrialisation, Trade and SME Development)
• Payroll registration required? Yes (Mandatory registration with the Namibia Revenue Agency)
• Withholding/tax remittance required? Yes (Employers must withhold income tax and remit it to the Namibia Revenue Agency)
• Social contributions required? Yes (Employers contribute to the Social Security Commission)
• Local employment agreement required? Yes (Written contracts are mandatory under the Labour Act)
• Mandatory benefits to budget? Yes (Includes annual leave, sick leave, and maternity leave)
• Works council/collective agreements considerations? Usually (Applicable in certain sectors, governed by the Labour Act)

Best Options If You're Hiring in Namibia

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should proceed with caution. Hiring contractors in Namibia can be a viable option, but it’s crucial to ensure that the contractor's work does not resemble an employee-employer relationship.

Misclassification can lead to legal issues, as Namibian labor laws provide strong protections for employees. To mitigate risks, consider the following:

• Ensure the contractor operates independently and is not integrated into your business.
• Avoid controlling the contractor’s work hours, location, or methods.
• Keep the scope of work project-based and clearly defined.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Namibia, depending on the required registrations and approvals.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 5,000–15,000 NAD per month ($300–$900)
• Payroll provider: Estimated 500–1,500 NAD per employee per month ($30–$90)
• Employer registrations and recurring compliance: Estimated 2,000–5,000 NAD per year ($120–$300)
• Corporate tax filings and annual reporting: Estimated 10,000–30,000 NAD per year ($600–$1,800)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Namibia

Hiring in Namibia can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Namibia quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.