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1. THE BUSINESS ENTITY, INCORPORATION AND RELATED REGISTRATIONS
The following narrative focuses on the general approvals, permits and licenses required of most businesses in Swaziland.
a) Registration of Name
Initially a letter has to be written to the Registrar requesting the reservation of a company name. The Registrar’s office will examine its records to see if a similar name already exists. It normally takes the office two (2) days to check as the system is still manual, and a processing fee of E50 / US$7.04 is charged once determined that a name is available
The applicant must then produce the following necessary documents:-
- Form TF 42 (Application for Annual Company License);
- Form E (Notice of the Company’s Registered Office);
- Certificate of Compliance;
- Certificate of Collation;
- Memorandum and Articles of Association
The above documents are normally prepared by a legal firm, Accounting or professional Secretarial firm.
The fees vary according to nominal share capital and are paid at the Registrar’s office. The fees range from E470 / US$66.20 for companies whose nominal capital is between E800 / US$112.68 and E10, 000 / US$1, 408.45 and E1, 600 / US$225.35 for companies whose nominal share capital above E50, 000.00 / US$7, 042.25. In addition there are fees associated with registration of original Memorandum of Association (E645 / US$90.84), reservation of a company name (E20 / US$2.58), inspection of any document filed with the Registrar (E50 / US$7.04), and issuance of any Certificate by the Registrar (E150 / US$21.13). The total costs, including legal or accountant services are usually between E2, 500 / US$352.11 and E5, 000 / US$704.22. At this juncture the Registrar’s office will endorse the Memorandum and Articles of Association and issue the Certificate of Incorporation. The Registrar sends copies to the Commissioner of Taxes and Ministry of Enterprise and Employment.
This process can take up to 4 weeks.
Foreign Registered Companies
The process consists of drafting a letter to the Registrar General, transmitting a certified
Memorandum from the home country and paying a fee based on nominal share capital.
c) Trademark Registration
A lawyer needs to be retained who will submit Form TM 2 and attach a mark for all goods and classes of goods, of which there is an application fee of E500 / US$70.42. The Registrar will send acceptance or objection forms. The applicant should prepare a proof of advertisement for publication in the Trademark Gazette. There is no fee for this placement and other parties have six (6) months to object. If there are no objections, the trademark is registered. Trademarks are valid for ten (10) years and there are no annual renewal requirements.
Income Tax Registration
Swaziland’s income tax policies are contained in the Income Tax Order of 1975 (King’s Order-in-Council No. 21 of 1975), as amended.
After setting up a business, an investor must register with the Income Tax Department. Form T must be submitted along with a Company Registration Certificate and a Memorandum of Agreement and Articles of Association. The company is then issued a registration number.
Annual income tax is levied on taxable income derived by all companies from sources within Swaziland. Taxable income is defined as “gross income (excluding capital receipts, foreign and exempt income) less allowable deductions (including loss offsets) incurred in the process of production in the Kingdom”.
Sales Tax Registration
Investors must submit Form ST 07 – Bond for Payment of Sales Tax together with the Registration Form ST 01 to the Commissioner of Customs and Excise. The investor will subsequently receive a Certificate of Registration. The investor must submit monthly returns along with the tax payment.
For excise tax, the investor must register with the Customs and Excise Department. The registration form includes information on the production process and the raw materials to be used. The tax is not levied on commodities, but on the taxable value of transactions.
Sales tax is applied on the following:
- Transactions involving imported goods, at the time of importation;
- Sales of locally manufactured goods on the date goods are sold by the manufacturer;
- Taxable services
- Hotel accommodation and restaurant sales
The rates are: 14% on general goods and services, and 25% on cigarettes and alcohol.
Exemptions include necessities, intermediate goods for manufacturing, medical supplies, temporary imports, certain personal imports and electricity. On goods imported from outside the customs union against a customs bill of entry, taxable value is determined by adding together a) and b) below;
a) The value for customs duty purposes; plus
b) Any customs, excise and surcharge duties paid; plus
c) 14% sales tax of the total amount of a) and b).
In the case of goods imported from within the customs union, taxable value is taken to be the full and final price paid for the goods, including all charges for freight, insurance, and all taxes and duties in respect of the goods in the country of dispatch. Sales tax, in these two cases, is payable at the time of entry or clearance of the goods.
All non-service related businesses are expected to apply for approval from the Swaziland Environmental Authority.
The investor needs to write a letter to the Authority providing information on the proposed project. Typically, this description should include the nature of the activity, materials to be used, and the proposed location. The description should be a few pages long.
The investor needs to state which of the following three categories best describes the project:
- Category 1 projects: those “unlikely to cause any significant environmental impact”;
- Category 2 projects: those “likely to cause environmental impacts some of which may be significant unless mitigation actions are taken”;
- Category 3 projects: those “likely to have significant adverse impacts whose scale, extent and significance cannot be determined without in-depth study. Appropriate mitigation measures can only be identified after such study”.
The Authority reviews the information and determines the category in which the project should be placed, prior to issuing an Environmental Compliance Certificate.
Investors should obtain Form A from the Factories Inspectorate. The completed form plus a cover letter requesting a permit should be submitted to the Labour Commissioner. Also, three copies of the blue prints must be submitted (two copies of which go to the Local Authority and Fire and Emergency Services). The documents need to be submitted before construction begins, and there is no processing fee.
The Factories Inspectorate approval is granted with the issuance of a Form D Certificate. The issuance of the Certificate normally takes one (1) month, although it is sometimes done as quickly as two (2) weeks. In the event of modifications, being required, a Provisional Certificate (Form C) is issued.
When the factory is completed and ready to assume operations, the Inspectorate will perform a final inspection after receiving notification from the investor, at which point the inspector will confirm that the building has been done in conformity with approved plane.
Swaziland National Provident Fund (SNPF)
All employers require registration with the National Provident Fund (NPF). Registration includes completion of Form NPF 1, and of which there is no registration fee. After submitting the form, the SNPF issues all employers with a company number. Registration should be done before the business becomes operational, but after it has registered with the Registrar General and receive a post box.
Upon becoming operational, a firm is required to submit to the SNPF Form 200 at the end of every month detailing the payments for each employee. It is a legal requirement that the employer submit the equivalent of 10% of wages (of which half are deducted from the employee’s wages); the ceiling of these payments is E1, 000 / US$140.85 per month. Payments must be submitted by the 21st day of the following month, or a penalty of 7.5% will be assessed.
When an employee ceases to be employed NPF Form 101 must be submitted. To download form click http://www.snpf.co.sz/form.html