DOING BUSINESS IN SWAZILAND IN 2020
Since 2003, Healy Consultants Group PLC has assisted our Clients with Swaziland business registration. Our services include i) Country company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.
Summary table of Swaziland company registration
|Summary||Tax resident LLC||Fast business setup solution||Free zone LLC||Representative office||Branch office|
|Also known as||Private company||Nominee LLC||Industrial area company||RO||Branch|
|Best use of company?||All products and services||Close a customer deal now||Manufacturing and export trading||Marketing & research||Specific projects|
|How soon can you invoice Clients/sign sales contracts?||6 weeks||4 weeks||3 months||Cannot trade||6 weeks|
|How soon can you hire staff?||6 weeks||4 weeks||6 weeks||6 weeks||6 weeks|
|How soon can you sign a lease agreement?||1 week||1 week||1 week||1 week||1 week|
|How long to supply corporate bank account numbers?||6 weeks||4 weeks||6 weeks||6 weeks||6 weeks|
|How long to supply company registration/tax numbers?||6 weeks||4 weeks||6 weeks||6 weeks||6 weeks|
|Corporate tax rate on annual net profits?||27.5%||27.5%||27.5%||Cannot trade||27.5%|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|Government grants available?||Yes||Yes||Yes||No||Yes|
|Government approval required for foreign owners?||Yes||Yes||Yes||Yes||Yes|
|Resident director/partner/manager/legal representative required?||No||No||No||Yes||Yes|
|Minimum paid up share capital?||US$8||US$8||US$8||None||None|
|Can bid for Government contracts?||Yes||Yes||Yes||No||Yes|
|Corporate bank account location?||Swazi Bank||Standard Bank||First National Bank||Nedbank||Swaziland Building Society|
|Can secure trade finance?||Yes||Yes||Yes||No||Yes|
|VAT payable on sales to local customers?||15%||15%||15%||Cannot trade||15%|
|Average total business set up engagement costs?||US$15,800||US$35,500||US$15,650||US$21,300||US$18,300|
|Average total engagement period?||3 months||2 months||3 months||3 months||3 months|
Swaziland company registration summary
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Advantages and disadvantages
Advantages of Swaziland company registration
- A Swaziland limited liability company can be incorporated within 2 months, with a minimum of two shareholders and one director of any nationality and residency. The minimum paid up share capital required can be as low as US$1 and our Client will not need to travel to complete the incorporation engagement;
- Dividends received by a resident company will be exempt from corporate income tax in Swaziland. Furthermore, there are no capital gains taxes or withholding taxes in Swaziland which makes registering companies in Swaziland highly attractive;
- English is Swaziland’s second official language, and is widely spoken by the population. Therefore, foreign investors will have no difficulty communicating with employees, customers and suppliers. Business documents are generally available in English, therefore translation costs and time can be saved when conducting business;
- Foreign investors enjoy numerous financial incentives on new businesses from the Swazi government including i) reduced corporate tax of 10% ii) a 10 year exemption from withholding tax on approved investment projects and iii) duty free importation of capital goods and raw materials;
- Although corporate tax rate is high at 27.5%, Swaziland businesses benefit from i) a VAT rate of only 15% ii) Social Security contributions of only 5% of gross salary and iii) no payroll tax. Total tax paid hence represent only 36% of their annual profits, to be compared with a 53% average among other African countries;
- Foreign investors also enjoy a number of guarantees from the Swazi government such as i) 100% foreign ownership of investments ii) equal treatment with the local companies iii) allowance to employ expatriate staff iv) guarantee against government interference or expropriation;
- Healy Consultants recommend our Clients to register either a PLC or a LLC instead of a Branch office in Swaziland. Branch office are indeed subject to an additional “branch tax” levied at a 15% rate on all profits earned;
- All the manufacturing and export-oriented companies are entitled to benefit from Swaziland’s numerous free trade and preferential trade agreements with its fellow African nations such as Common Market for Eastern and Southern Africa (COMESA), The Southern Africa Development Community (SADC) and the Southern African Customs Union (SACU). Moreover, the country is a signatory of the General Agreement on Tariffs and Trade (GATT) as well.
Disadvantages of Swaziland company registration
- Our Clients will sell their products on the Swazi market, which suffer from i) low population of 1 million and ii) an average purchasing power below US$2 a day;
- Swaziland’s corporate tax rate is punitive, at a standard rate of 27.5% on all corporate profits;
- Our Clients incorporating a company in Swaziland will face frustrating delays. It indeed takes 2 months on average to setup a Swazi company and is poorly ranked as the world’s 121st best country to start a business;
- Swaziland has signed just a mere 3 double taxation treaties, which generally fail to reduce the tax burden of foreign entrepreneurs;
- Corruption in Swaziland is widespread especially in the public sector. The inefficiency of the Swazi court system always leads to investors opting for out of court settlements during disputes;
- Our Clients often find they need professional assistance to comply with Swaziland’s dual legal system (customary laws/Roman-Dutch laws). Healy Consultants will be pleased to assist with this difficult task;
- Foreign employers seeking to hire skilled professionals in Swaziland are going to face difficulty. This is majorly due to a huge gap in between the available skills in the Swaziland market and the desirable skill required by a foreign employer.
Best uses for a Swaziland company
- Swaziland is an excellent base from which to sell products to South Africa, which boasts i) a large consumer market, worth US$350 billion and ii) 52 million consumers, with the 4th highest purchasing in Africa.
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- Time to incorporate: Four weeks
- Cost to set up: US$15,800
- Minimum capital: US$1,000
- Physical office required: No
- Shareholders: 2
- Directors: 2
- Company secretary: No
- Resident director: No
- Corporate tax rate: 27.5%
- Corporate tax base: Territorial
- Shelf companies: No
- Main company type: Proprietary company