Proposal would bar foreign nationals from operating certain businesses

IMPACT – MEDIUM

What is the change? Swaziland has published a proposal to bar foreign nationals from operating 31 classifications of, primarily, trading businesses.

What does the change mean? Foreign nationals who are already operating businesses in affected categories will not be impacted, but new entrants would not be granted the required trading licenses. The change was proposed in draft regulations published by the Ministry of Commerce, Industry and Trade.

• Implementation time frame: The change is likely to be implemented by the end of 2017.
• Visas/permits affected: Work permits.
• Who is affected: Companies intending to establish a company in Swaziland with a foreign national as a company director.
• Business impact: The proposal is currently limited to 31 classifications of, primarily, trading businesses, but this is currently under review by the Portfolio Committee for Commerce, Industry and Trade of the House of Assembly.

Background: Since tabling the Reservation of Certain Trades and Businesses for Swazi Citizens Regulations 2017 before the House of Assembly earlier this month, the minister of Commerce, Industry and Trade, Jabulani Mabuza, has countered criticism that the government initiative may be illegal. “We have generations to look after as Swazis,” Mabuza has stated. “These are the people we have to ensure find that there are businesses reserved for them. We are not saying people who are from outside the country should not come and do business here. We are only saying foreigners should only do business in this country as investors.” The Federation of the Swazi Business Community has been lobbying for such a policy for many years and has therefore welcomed the publication of the new regulations. The businesses currently listed in the regulations are primarily trade-related, but also include service industries such as private investigation and debt collection.

BAL Analysis: It is anticipated that the Reservation of Certain Trades and Businesses for Swazi Citizens Regulations 2017 will be implemented later this year. The impact on international companies and foreign nationals wanting to invest in new opportunities in Swaziland has yet to be determined, however, as the Portfolio Committee for Commerce, Industry and Trade of the House of Assembly may extend the current list of business classifications reserved for Swazi nationals only and, as such, further restrict foreign access to local markets.

This alert has been provided by the BAL Global Practice. For additional information, please contact your BAL attorney.

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