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 or Distributor

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) 
• National Industrial Development Corporation of Eswatini (NIDCS)

Establishing an Office

The Eswatini Investment Promotion Authority (EIPA) is a government 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:

1.    Business Registration:  EIPA facilitates the registration of the company through legal practitioners (Companies Act of 1912).  Costs range from $100 – $200.

2.    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.

3.    Trading Licenses:  EIPA will handle the trading license application (Trading Licenses Order No. 20 or 1975).  The cost of the license is $45.

4.    Utilities Services:  Applications are handled by EIPA.

5.    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.

6.    Factory Inspectorate and National Provident:  The registration process is facilitated by EIPA.

Two common problems noted are:

1.    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.

2.    Entry Permit Review: Some investors complain that the review of applications for employee Entry Permits can vary; thus, employers cannot predict when an employee will be able to work legally in the country.

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 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 (such as Kentucky Fried Chicken, John Deere, Bandag Tyres, FedEx, and DHL). 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 businesspeople 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 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 the radio. It features two stations, with the larger being government-owned and the other being a faith-based, privately-owned station. The newspapers with the largest print circulation are the Times of Eswatini and the Eswatini Observer magazines and publications are increasing in number though their circulation is largely within the urban centers. Increasing cellular penetration offers strong potential for direct marketing opportunities.  Facebook is the prominent social media used in Eswatini.

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 government 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 the Kingdom of Eswatini – 34.95 percent
• Eswatini National Provident Fund – 61.95 percent 
• Standard Bank Eswatini – 1.55 percent
• Nedbank (Eswatini) Limited – 1.55 percent
   

Tibiyo Taka Ngwane, a private trust fund managed by the king, 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.  

NIDCS serves as a special purpose vehicle (SPV) for investing on behalf of the government to ensure maximization of investment returns in the various investing avenues. NIDCS activities complement the government’s effort to attract investment by offering equity participation and anchoring investor confidence in Eswatini. NIDCS is a strategic partner in joint ventures through equity and debt capital. It is also mandated to introduce and establish new 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 www.buyusa.gov/southafrica.