Foreign investment continues to play an important role in Eswatini’s economic development. However, the acquisition and ownership of land by non-Swazi individuals and entities remains subject to a carefully regulated legal framework designed to protect national interests and prevent speculative landholding.

Eswatini’s legal framework places important restrictions on the acquisition and ownership of land by non-citizens. These restrictions are principally governed by the Land Speculation Control Act, 1972, the Land Speculation Control Regulations, 1972, and section 211(4) of the Constitution of the Kingdom of Eswatini, 2005.

Section 211(4) of the Constitution provides that, subject to section 211(5), any agreement whose effect is to vest ownership of land in Eswatini in a non-citizen or in a company whose majority shareholders are not citizens is of no force and effect unless the agreement predates the commencement of the Constitution. However, section 211(5) cautions that this provision must not be used to undermine or frustrate a legitimate business undertaking in which land is a significant factor or base.

The Constitution therefore establishes a strong public policy preference for citizen ownership of land while preserving flexibility for bona fide investment and commercial activity.

The Land Speculation Control Act

The Land Speculation Control Act predates the Constitution and regulates transactions involving non-citizens through a system of administrative approval. This Act classifies certain dealings in land as “controlled transactions.”

 A “controlled transaction” includes:

• The sale, transfer, lease, mortgage, exchange or other disposal of land to a non-citizen;
• The disposal of land to a company or cooperative society that is not wholly owned by Swazi citizens; and
• The acquisition or transfer of shares in a private company or cooperative society that owns land, where the transaction involves a non-citizen.

Under section 8 of the Act, a controlled transaction is void unless the consent of the Land Control Board has first been obtained. Agreements relating to controlled transactions may also become void if an application for consent is not made within the prescribed period or if consent is ultimately refused.

Consent of the Land Control Board

Any party to a controlled transaction may apply to the Land Control Board for consent. In determining the application, the Board must assess whether the transaction is sufficiently beneficial to Eswatini. Conversely, consent may be refused where the Board considers the transaction to be wholly or partly speculative in character. The Board may also impose development conditions and other requirements designed to prevent land speculation.

The Regulations require applicants to disclose, among other matters, the identity and nationality of the parties, ownership structures, the nature of the proposed development, available funding, and the intended use of the land.

Exemptions

Certain categories of land and transactions are exempt from the Act. These include approved industrial areas such as the Matsapha Industrial Estate, land used for hotels, short-term leases in specified circumstances, and certain share transactions where land represents only a minor component of a company’s assets. Additional exemptions have been granted over time to specific statutory bodies, financial institutions and public entities.

Reconciling the Act with the Constitution

Although the Land Speculation Control Act contemplates the possibility of non-citizens acquiring interests in land with the consent of the Land Control Board, the Constitution, as the supreme law, imposes a more stringent restriction on agreements that vest ownership of land in non-citizens or foreign-controlled companies. Accordingly, any assessment of land acquisitions by non-citizens must be undertaken with regard to both the statutory consent regime and the constitutional prohibition in section 211(4). [Land Specu…-8-of-1972 | PDF], [eswatinilii.org]

In practice, the constitutional provisions suggest that while foreign participation in property-based investment remains possible, particularly through legitimate business structures protected by section 211(5), direct vesting of land ownership in non-citizens or foreign-controlled entities is subject to significant constitutional limitations. [eswatinilii.org]

Conclusion

Eswatini’s land law seeks to strike a balance between protecting national control of land and encouraging economically beneficial investment. Non-citizens and foreign-controlled entities face substantial restrictions on acquiring land ownership, must comply with the Land Control Board approval process where applicable, and must navigate the constitutional limitations contained in section 211(4). Any proposed transaction involving foreign participation should therefore be carefully structured and reviewed for compliance with both the Constitution and the Land Speculation Control Act.

 

Should you require further elucidation on the subject you may contact the writer.