Setting up Business in Swaziland 07. Exchange Control
7. EXCHANGE CONTROL
7.1 Are there any restrictions/requirements imposed in respect of setting up a company or branch?
· Swaziland is a member of the Common Monetary Area ("CMA"). There are no control restrictions in effect among the member countries, and they apply similar exchange control measures. Other member states of the CMA are Lesotho, Namibia and South Africa.
· The Lilangeni is currently pegged to the South African Rand on a one-to-one basis.
· Swaziland classifies residents into those of the CMA and those of the rest of the world. Residents can be either permanent or temporary residents.
· The inward flow of capital by non-residents is welcomed. However, to avoid inconvenience on subsequent repatriation of interest, dividends, profit or other income accruing there from, prior approval of the Central Bank is necessary for all capital transfers into Swaziland from outside the CMA. In practice, approval is routinely granted when required for genuine investment activity.
7.2 Are there any restrictions in introducing funds to the company or branch by way of foreign loans?
· Residents are not permitted to borrow funds from abroad without prior approval.
· A local importer may obtain foreign currency for payment of an overseas supplier provided that an import permit issued by the Ministry of Finance is obtained together with the evidence that the goods have been or are to be received in Swaziland.
7.3 Are there any local borrowing restrictions for a foreign-owned company or a branch of a foreign company?
Before raising loans or bank overdrafts within the CMA, persons or companies that are more than 25% directly or indirectly non-CMA controlled, require the Central Bank's approval. Non-residents are expected to arrange a fair share of required funds from their own private resources.
7.4 Are there any restrictions on the repatriation of profits?
Dividends derived from current trading are freely transferable on submission of documents, for example, the latest certified annual financial statements of the company, to the Central Bank, subject to provision for non-resident shareholders' tax of 15%.
7.5 Are there any restrictions on the payment of interest, management or other fees, director's fees to non-resident directors, or royalties?
· Interest on borrowings abroad (subject to the prior to approval of the Central Bank) may be remitted subject to provision for non-residents tax on interest of 10%.
· Companies, whose directors' permanent place of residence is outside the CMA, may remit fees to the maximum of E15 000 per annum per director, subject to appropriate documentation being produced.
· Royalty payments and management fees to non-residents may be made on the basis of agreements which have been submitted to the Central Bank for approval and these will only be remitted after settlement of any withholding taxes.
7.6 Are there any other exchange control restrictions?
See 9.6 below.
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