Despite its relatively small size compared to other countries in the region, Eswatini has been able to attract some FDI in recent years, particularly in the manufacturing and tourism sectors. According to UNCTAD's 2022 World Investment Report, the flow of FDI returned around its pre-crisis level, at USD 126 million in 2021 (from 41 million one year earlier). In the same year, the total stock of FDI was estimated at USD 1.1 billion, around 23.6% of the country’s GDP. The Annual Economic Review Report 2021/22 released by the Central Bank shows that the country’s FDI accounts have posted a net of SZL 989.5 million inflow, with SZL 3.193 billion worth of net portfolio investments assets acquired during the period under review. In terms of sectors, the main FDI flows into Eswatini have been in manufacturing, with a focus on textiles, clothing, and agribusiness. Other sectors that have received FDI include tourism, construction, and services. The main countries investing in Eswatini are South Africa, Taiwan, and the United States. South Africa, as Eswatini's neighbour and largest trading partner, accounts for a significant proportion of FDI in the country.
Eswatini benefits from good road infrastructure, electric energy (mainly imported from South Africa), and telecommunications. Investors are offered various incentives, such as repatriation of profits, fully serviced industrial sites, purpose-built factory shells at competitive prices, and exemptions from duties on raw materials used in the production of goods intended for export outside the Southern African Customs Union (SACU). Additionally, investors can benefit from financial incentives like tax allowances and deductions for new businesses, including a 10-year exemption from withholding tax on dividends and a low corporate tax rate of 10% for approved investment projects. New investors can also enjoy duty-free import of machinery and equipment. Investors in the Special Economic Zone (SEZ) may receive further benefits, such as a 20-year exemption from all corporate taxation (followed by taxation at 5%), full refunds of customs duties, value-added tax, and other taxes paid on goods purchased for use as raw material, equipment, machinery, and manufacturing, unrestricted repatriation of profits, and full exemption from foreign exchange controls for all SEZ operations. However, investments are screened by the government, and foreign investment in land is restricted. In addition, state-owned enterprises distort the economy. The Constitution provides for an independent judiciary power, but the king’s power to appoint judges limits judicial independence (The Heritage Foundation). Corruption is also a major issue. Overall, Eswatini ranks 120th out of 176 countries in the 2023 Index of Economic Freedom and 130th out of 180 in the latest Corruption Perception Index.
Eswatini | Sub-Saharan Africa | United States | Germany | |
---|---|---|---|---|
Index of Transaction Transparency* | 2.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | 36 | 117 | 21 |
FDI Stock (million USD) | 3,834.0 | 4,129.8 | 4,151.0 |
Number of Greenfield Investments* | 1.0 | 1.0 | 1.0 |
Value of Greenfield Investments (million USD) | 10 | 115 | 8 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Personal income tax | Progressive rates from 0 to 33% |
SZL 0 – 100, 000 | 20% (a rebate of SZL 8,200 is applied to the yearly tax due) |
SZL 100,001 – 150,000 | SZL 20,000 plus 25% of taxable income in excess of SZL 100,000 |
SZL 150,001 – 200,000 | SZL 32,500 plus 30% of taxable income in excess of SZL 150,000 |
SZL 200,001 and above | SZL 47,500 plus 33% of taxable income in excess of SZL 200,000 |
A rebate of SZL 8,200 (increased to SZL 10,900 for people over 60 years of age) per annum is applied to the annualized tax calculated. |
Eswatini | Sub-Saharan Africa | United States | Germany | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 33.0 | 36.6 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 122.0 | 284.8 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 35.8 | 47.3 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
Setting Up a Company | Eswatini | Sub-Saharan Africa |
---|---|---|
Procedures (number) | 12.00 | 7.51 |
Time (days) | 21.50 | 21.30 |
Source: Doing Business.
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Latest Update: September 2023