The World Bank Country Partnership Framework for FY24-28 notes that Eswatini has “a good road network compared with African peers” which enables intra-country travel and allows for efficient road-to-rail and road-to-air transport.
Eswatini uses two ports for imported goods: Durban, South Africa, and Maputo, Mozambique. Eswatini has a dry port at Matsapha, near Manzini, that clears consignments coming into Eswatini via the railway line.
Using an Agent to Sell U.S. Products and Services
Marketing U.S. goods and services has traditionally been accomplished through bases or agents in South Africa, although the use of an agent or distributor is not legally required. The Foreign Commercial Service office at the U.S. Consulate General in Johannesburg can help U.S. businesses interested in accessing Swati markets find agents and partners in South Africa. In addition, the following organizations are available to help foreign businesses find distributors and partners in Eswatini:
- The Eswatini Investment Promotion Authority (EIPA)
- Industrial Development Company of Eswatini (IDCE) can help finding partners.
- The newly revived National Industrial Development Corporation of Eswatini (NIDCS) now serves as a special purpose vehicle (SPV) for investing on behalf of the GKoE. The revival also expanded the mandate by making the Corporation a custodian of GKoE investments including shares in various entities.
Eswatini Investment Promotion Agency
1st Floor North Wing, Mbabane Office Park, Building 1, Mhlambanyatsi Road
P. O. Box 4194, Mbabane H100, Eswatini
Tel: +268 2404 0470/2/3/4
Fax: +268 2404 3374
Website: https://investeswatini.org.sz/
Business Eswatini
Malagwane Hill,
P. O. Box 72, Mbabane H100
Tel : +268 2404 0768/ 2404 4408
Email : info@business-eswatini.co.sz
Website : https://www.business-eswatini.co.sz/
Industrial Development Company of Eswatini
5th Floor, Dhlan’ubeka House
P.O. Box 866 Mbabane,
Eswatini Cnr Mdada & Lalufadlana Street.
Mbabane H100, Eswatini
Tel.: +268 2404-3391/5
Fax: +268 2404-5619
Email: info@koblaquashie.co.sz
Website: https://www.idce.co.sz/
National Industrial Development Corporation of Eswatini
3rd Floor
North-west Wing
Sibekelo Building
Office Park
Mhlambanyatsi Road
Tel: +268 2404 3846 / 24042241
Fax: +268 2404 6096
Email: info@enidc.org.sz
Website: https://www.enidc.org.sz/
Establishing an Office
The Eswatini Investment Promotion Authority (EIPA) is a GKoE agency created to promote, attract and assist the establishment of both local and foreign enterprises. EIPA is the logical first point of contact for a new business in Eswatini. The following are EIPA’s guidelines for establishing operations in Eswatini:
- Business Registration: EIPA facilitates the registration of the company through legal practitioners (Companies Act of 1912). Costs range from $100 – $200.
- Immigration: EIPA handles the applications for entry permits on behalf of the investor. Medical certificate, certificates of association, share certificates, bank statements, police clearances and two passport size photos are required. Permit fees range from $25 for up to 12 months to $250 for five years. An E-visa and permit application system is being piloted by ministry of Home Affairs for full roll out in 2024. This electronic platform for individuals and businesses seeking visas and permits for Eswatini will eliminate the need for physical paperwork and manual processes as well as significantly reduce processing times, minimize errors, and enhance transparency
- Trading Licenses: EIPA will also handle this application (Trading Licenses Order No. 20 or 1975). The cost of the license is $45.
- Utilities Services: Applications are handled by EIPA also available on cellphones
- Environmental Compliance: All non-service related businesses are required by law to apply for approval from the Eswatini Environmental Authority, a process that EIPA fully facilitates. All waste-creating industries are required by law to undertake an environmental impact assessment.
- Factory Inspectorate and National Provident: Law requires these registrations. The registration process is facilitated by EIPA.
Foreign investors have encountered some difficulties working with EIPA and with GKoE regulations outside of EIPA’s scope. A study by USAID’s Regional Office for Southern Africa (available at: https://www.eswatinitradeportal.com/ outlines many step-by-step procedures related to employing, reporting, locating, and operating in Eswatini.
Two common problems noted are:
- Trading License/Entry Permit: The current procedures require a Trading License to obtain an Entry Permit, while simultaneously requiring an Entry Permit to obtain a Trading License. In practice, an investor must negotiate with both the Department of Immigration and the Ministry of Commerce, Industry and Trade to reach an agreement as to which permission will be granted first.
- Entry Permit Review: Some investors complain that the review of applications for employee Entry Permits can vary; thus, employers cannot predict if and when an employee will be able to work legally in the country.
The U.S. Embassy in Mbabane is working with EIPA and the GKoE in general to clarify the issues raised in the “Eswatini Investor Roadmap” and to ease conditions for issuance of temporary residence and temporary work permits, particularly for skilled foreign workers.
For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Franchising
Franchising opportunities for U.S. business, such as restaurants and retail shops, are plentiful in Eswatini. Franchises in Eswatini are mostly South African, or come to Eswatini by way of a South African entity that has purchased master franchise rights to the region, e.g. Kentucky Fried Chicken, John Deere, Bandag Tyres, FedEx, and DHL.
In the past, South African buyers have allegedly taken advantage of foreigners’ ignorance of Eswatini’s political independence, and illegally set up franchises in Eswatini without having proper licensing for the country. Swati business people are thus often suspicious of new franchises in the country. Master franchise deals exclusively for Eswatini or for the region are not subject to restrictions beyond the requirements of any other business arrangement.
There are several urban centers that could support a variety of franchise types. Swati business people are very interested in cutting their own deals with U.S. and other foreign firms for franchising rights instead of going through South Africa.
Uneasiness with South African dominance in regional franchising extends across southern Africa and can be an important impetus to U.S. firms, not only to sell Swati franchising rights directly to Eswatini-based buyers, but to consider a Swati franchiser for the broader region.
There are emaSwati interested in becoming regional franchisers and who can command the resources necessary to do so. The disadvantage of Eswatini-based franchising is the lack of a strong inputs supply base. In certain ventures, South Africa’s ability to more readily provide needed supplies gives it an advantage.
Direct Marketing
There are no restrictions against U.S. companies marketing their goods in Eswatini. The GKoE’s annual Eswatini International Trade Fair, held the last week of August or the first week of September, welcomes international companies for marketing purposes.
The most accessible medium in Eswatini is radio with two stations, the larger being government owned and the other a faith based, privately owned station. The newspapers with the largest print circulation are the Times of Swaziland and the Swazi Observer Local magazines and publications are increasing in number though their circulation is largely within the urban centers. Increasing cellular penetration offers great potential for direct marketing opportunities.
Joint Ventures/Licensing
A number of organizations in Eswatini can help foreign firms pursue joint ventures. The four largest are the Industrial Development Company of Eswatini (IDCE), National Industrial Development Corporation of Eswatini (NIDC), Interneuron, and Tibiyo Taka Ngwane.
IDCE is a private development finance company formed as a joint venture between the GKoE and several international and local financial institutions. The main objective of EIDC is to assist incoming companies by financing joint ventures, equity participation, asset leasing, and providing factory shells. Partners include:
- Government of Kingdom of Eswatini – 34.95 percent
- Eswatini National Provident Fund - 61.95 percent
- Standard Bank of Eswatini - 1.55 percent
- Nedbank (Eswatini) Limited - 1.55 percent
Tibiyo Taka Ngwane, a private trust fund managed by the King for the nation, is a common player in Swati joint venture enterprises. Tibiyo invites foreign partners to either form joint venture projects or to run Tibiyo’s wholly owned projects under direct management contract. Tibiyo usually expects the joint venture partner to provide leadership in technical project implementation as well as professional management. When participating in a joint venture, Tibiyo is flexible on the level of its equity stake, generally ranging between 20-50 percent. It can provide limited loan financing to the joint venture at a favorable rate. Tibiyo, when requested, can also play a facilitator role to investors wanting to set up in the country but wishing to “go it alone.”
NIDCS serves as a special purpose vehicle (SPV) for investing on behalf of the GKoE to ensure maximization of investment returns in the various investing avenues.
NIDCS activities complement the GKoE’s effort to attract investment by offering equity participation and anchoring investor confidence in Eswatini. Currently, they support undertakings in sectors such as Food and Beverages, Agribusiness, Health and Pharmaceuticals, Infrastructure and Engineering, Paper, Plastic, Energy, Recycling and Waste Management, Leather, Textiles and Apparels, Communications, Mining and Minerals, Financial Services, , and Entertainment.
NIDCS is a strategic partner in joint ventures through equity and debt capital. It is also mandated to introduce and establish new age industries and technological advancement in all the sectors of the economy.
Express Delivery
Express delivery services include DHL, FedEx, Postnet, and Swazipost. They are able to deliver worldwide with a turnaround of 3 days to 1 week to major U.S. cities.
Due Diligence
Proper due diligence should form the base for any business negotiation with Swati concerns. U.S. companies should act prudently in completing due diligence reports prior to any proposed business deals.
The U.S. Department of Commerce’s Foreign Commercial Services (FSC) Section at the U.S. Consulate General in Johannesburg can provide valuable background information on Swati firms through their International Company Profile (ICP) service. Further information can be obtained by visiting https://www.trade.gov/buyusa or contacting the FCS Export Assistance Center at (+27) 11-778-4808.