1. Liberalisation of Trade in Tourism Services in the Southern African Development Community Natasha Ward, Partner, ACP International Trade Advisors SADC Tourism Forum Johannesburg, November 18, 2013

2. Structure of Presentation  Key Points  Definition of the sector  Review of Legal Restrictions

3. Key Points  Commitments in tourism services could provide a platform for increased regional and international trade in the sector  Commitments in complementary sectors may support the development of the national tourism industries  Where there are inconsistencies between the applied regime for tourism and GATS commitments, SADC member states could use the opportunity to eliminate such inconsistencies  SADC member states with no commitments could use the opportunity of the SADC TIS negotiations to make commitments

4. Key Points  Private sector input is important for gaining commercially meaningful access  SADC region stands to gain substantially from Trade in Services commitments IF it aggressively moves forward on implementing the Protocol on Tourism Development  Countries need to audit results of empowerment policies in tourism sector  More protection to domestic players does not necessarily equate to stronger or faster development of tourism sub-sectors

5. Definition of the Sector  WTO W/120 Classification  Hotels and Restaurants  Travel Agency and Tour operator services  Tour guides …….. But SADC member states have a far wider definition of the sector. It includes:  Attractions  Car rentals  Tourism training

6. Typology of restrictions identified  Restrictions controlling market entry  Restrictions which give domestic competitors an advantage over foreign entrants

7. Frequently encountered restrictions Establishment of a business  Acquisition of real estate  Equity restrictions  Minimum capital requirements  Economic needs tests  Limitations on the size of assets  Reservation of activities for nationals  Discriminatory taxes and duties  Repatriation of profits and dividends

8. Frequently encountered restrictions Temporary Movement and Stay of Natural Persons  Availability of licences for certain categories of activities to nationals only  Quotas on the number of foreign staff that may be employed  Economic needs tests  Differences in fees and criteria for licenses  Nationality and residency requirements

9. Applied regimes vs. GATS commitments

10. Caveats  Restrictions identified on best available information at time of study  While countries have made offers under the WTO’s Doha Development Round, these are conditional

11. Applied Regime - Angola Market AccessNational Treatment Approval for opening additional branchesTravel agency and tour operator bonds must be with a financial institution headquarted in or possessing a branch in Angola Access for tour guides based on reciprocity Repatriation of dividends and profits to be effected gradually and proportionally Representative offices limited to 6 employees Repatriation of dividends and profits, etc. guaranteed for investments of US$ 1 million Approval required for increases of share capital Licensing requirement and ministry authorisation for representative offices of foreign based tour operators ENT for entry and stay of foreign employees Foreign enterprises must use local accountants, auditors and legal counsel Foreign enterprises must be represented by Angolan registered lawyers in domestic based arbitral proceedings

12. GATS Commitments - Angola 9.TOURISM AND TRAVEL RELATED SERVICES A. Hotel and restaurant services (including catering) (CPC 64543) Hotels(1)None (2)None (3)None (4)Unbound, except for measures affecting senior managers and specialists with knowledge essential for the provision of the service. (1)None (2)None (3)None (4)Unbound, except for measures affecting senior managers and specialists with knowledge essential for the provision of the service. Restaurants(1)None (2)None (3)None (4)Unbound, except for measures affecting natural persons in the following categories: directors, senior managers and specialists with knowledge essential for the provision of the service. (1)None (2)None (3)None (4)Unbound, except for measures affecting natural persons in the following categories: directors, senior managers and specialists with knowledge essential for the provision of the service.

13. Applied Regime - Botswana Market AccessNational Treatment Reservation of sectors for nationals under the Tourism Act and the Liquor Act Foreign based operators licences valid for 12 months only and fees are significantly higher No access for tour guides and hunters below the professional category level Licences for foreign based tour operators do not permit them to enter national parks ENT for the entry and stay of foreign staff Different criteria, qualifications and licensing fees for professional hunters and guides Residency requirements for directors Discriminatory transfer duty and withholding tax Restrictions on access to land Minimum investment requirements for foreign investors

14. GATS Commitments - Botswana Sub-SectorMarket AccessNational Treatment Hotel and restaurants including catering (CPC 641-643) 1)None 2)The amount of local and foreign currency entitled to permanent residents is limited for each trip and for the whole year by the Bank of Botswana. 3)The service should be supplied through commercial presence. 4)Unbound except as indicated in the Horizontal Commitments. 1)None 2)Unbound 3)The service supplier should meet all residency requirements. 4)Unbound except as indicated in the Horizontal Commitments. Travel agencies and tour operators 1)None 2)None 3)None 4)Unbound except as indicated in the Horizontal Commitments. 1)Permanent residents should not purchase tickets to enable non-residents to visit Botswana and accept payment outside Botswana. 2)None 3)None 4)Unbound except as indicated in the Horizontal Commitments

15. Applied Regime – D.R. Congo Market AccessNational Treatment Reservation of the operation of hotels of 10 rooms of less for nationals only Foreign employees cannot exceed 15 per cent of the workforce Limitations on the number of tour guides

16. GATS Commitments – D.R. Congo 9.TOURISM AND TRAVEL RELATED SERVICES Market Access National Treatment A.Hotels and Restaurants (including catering) (CPC 641-643) (1)None (2)None (3)None (4)Unbound, except as indicated in Part I (1)None (2)None (3)None (4)Unbound, except as indicated in Part I B.Travel Agencies and Tour Operators Services (CPC 7471) (1)None (2)None (3)None (4)Unbound, except as indicated in Part I (1)None (2)None (3)None (4)Unbound, except as indicated in Part I C.Tourist Guide Services (CPC 7472) (1)None (2)None (3)None (4)Unbound, except as indicated in Part I (1)None (2)None (3)None (4)Unbound, except as indicated in Part I

17. Applied Regime - Lesotho Market AccessNational Treatment ENTs for smaller hotelsLimitations on access to land Limitations on number/size of land holdings Discriminatory withholding taxes Reservation of some tourism oriented activities Expatriates can form 5 per cent of an enterprises staff ENTs for entry and stay of natural persons

18. GATS Commitments - Lesotho Sector or Subsector Limitations on Market AccessLimitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES A.Hotels and Restaurants (including catering) (CPC 643) 1)Unbound except for catering: none 2)None 3)Unbound except as indicated in the horizontal section 4)Unbound except as indicated in the horizontal section 1)Unbound 2)None 3)Unbound except as indicated in the horizontal section 4)Unbound except as indicated in the horizontal section B.Travel Agencies and Tour Operators Services (CPC 7471) 1)Unbound 2)Unbound 3)Unbound 4)Unbound except as indicated in the horizontal section 1)Unbound 2)Unbound 3)Unbound 4)Unbound except as indicated in the horizontal section C.Tourist Guide Services (CPC 7472) 1)Unbound * 2)None 3)None 4)Unbound except as indicated in the horizontal section 1)Unbound * 2)None 3)None 4)Unbound except as indicated in the horizontal section

19. Applied Regime - Malawi Market AccessNational Treatment ENTs for the entry and temporary stay of foreign nationals Minimum capital requirements Nationality or residency requirement for tour guides Residency requirements for directors Remittance restrictions on expatriate individuals Registration with Central Bank required for subsequent repatriation of profits, dividends or capital Capital gains repatriation at discretion of Reserve Bank of Malawi Approval required for foreign borrowing

20. GATS Commitments - Malawi Sector or Subsector Limitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section

21. Applied Regime - Mauritius Market AccessNational Treatment Possibility to limit the number of licences for tourism enterprises, pleasure craft and canvassers Foreign travel agencies must work through an agent established in Mauritius Reservation of some tourism services for nationals only- tour guides. Reservation of tourism related sectors for nationals only - car hire, yacht and cruise services Restrictions on the acquisition of real estate such as leases only available from the Government and a minimum of 10 acres per project New hotels cannot exceed 200 roomsMinimum foreign investment in tour operator business is MUR 5 million Maximum of 49 per cent foreign equity permitted in hotels of less than 100 rooms Minimum foreign investment in restaurant projects is in excess of MUR 10 million Maximum of 30 per cent foreign equity permitted in diving centres and duty- free shops Minimum foreign investment in commercial presences offering yacht chartering and cruise services is MUR 10 million Foreign hotel and restaurant operations must be staffed predominantly by Mauritians

22. GATS Commitments - Mauritius A. TOURISM SERVICES (1)Hotel Operators 1)Unbound* The operator has to incorporate a Company (Hotel Management Act 1982) 2)None 3)The operator has to incorporate a company None except foreign participation in hotels with less than 100 rooms limited to 49 per cent. In hotels with more than 100 rooms full foreign participation is allowed. Foreign establishments must be staffed predominantly by Mauritians. 4)Unbound except as indicated in the horizontal section. 1)Unbound* Free repatriation of profit governed by Bank of Mauritius Act and Income Tax Act. 2)None 3)None Foreign establishments must be staffed predominantly by Mauritians. 4) Unbound except as indicated in the horizontal section.

23. GATS Commitments - Mauritius (2)Restaurant Operators 1)None Foreign participation is allowed in projects of more than Rs 10 million. 2)None 3)The project must not be less than Rs 10 million. None except that foreign participation is allowed in Projects of more than Rs 10 Million. Foreign establishments must be staffed predominantly by Mauritians except for scarcity areas. 4)Unbound except as indicated in the horizontal section. 1)None Free repatriation of profit governed by Bank of Mauritius Act and Income Tax Act. 2)None 3)None Foreign establishments must be Staffed predominantly by Mauritians. 4)Unbound except as indicated in the horizontal section.

24. GATS Commitments - Mauritius (3)Travel Agencies 1)Travel agencies established outside of Mauritius must work through an agency established in Mauritius 2)None 3)Requires bank guarantee and licence. Clearance to be obtained from the Ministry of Tourism and Ministry of Internal and External Communications 4)Unbound except as indicated in the horizontal section. 1)None 2) None 3)None 4)Unbound except as indicated in the horizontal section. (4) Tour Operators 1)None Restricted to Mauritian nationals 2)None 3)Permit requirement from the Ministry of Tourism, Ministry of Finance and Prime Minister’s Office. 4)Unbound except as indicated in the horizontal section. 1)None Restricted to Mauritian nationals 2)None 3)To comply with the regulations of the National Transport Authority None 4)Unbound except as indicated in the horizontal section.

25. GATS Commitments - Mauritius (5) Tourist guides services 1)None Limited to Mauritian Nationals – Exception made for languages not spoken by Mauritian. 2)None 3)Exception made for languages not spoken by Mauritians. Allowed only in linguistic-scarcity areas 4)Unbound except as indicated in the horizontal section. 1)None Governed by Immigration Laws 2)None 3)None Governed by Income Tax Laws 4)Unbound except as indicated in the horizontal section.

26. Applied Regime - Mozambique Market AccessNational Treatment ENT and quotas on the entry and temporary stay of foreign nations Hunting guide licences subject to nationality and residency requirements ENT for travel agency and tour operator providers Minimum capital requirements Discriminatory regime for access to land Recognition of qualifications of foreign tourism information professionals Approval required for remittance of dividends and profits Conditions on the repatriation of profits and re-export of invested capital

27. GATS Commitments - Mozambique  No commitments

28. Applied Regime - Namibia Market AccessNational Treatment Entry and temporary stay of natural persons governed by ENT Residency requirement or work permit for managers of regulated tourism activities Potential limits on equity, the number of foreign directors and foreign senior managers under the New Equitable Economic Empowerment Framework Work permit or residency requirement for tour guides Work permit required for staff of foreign tour operators Citizenship or residency requirement for liquor licensees Withholding taxes on non-residents

29. GATS Commitments - Namibia Sector or Sub-sectorLimitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES A.Hotels and Restaurants (CPC 641-643) 1)None 2)None 3)None 4)None 1)None 2)None 3)None 4)None B.Travel Agencies and Tour Operators Services (CPC 7471) 1)None 2)None 3)None 4)None 1)None 2)None 3)None 4)None

30. Applied Regime - Seychelles Market AccessNational Treatment Reservation of some tourism activities for nationals only- diving centres, tour guides, small hotels, small luxury villa projects, small boat operations Foreign owned proprietary companies require the approval of the Ministry of Economic Planning Limitation on the total number of assets in some sectors- car hire, boat charters or maximum limitation on the total number of operators in a sector- yachts Approval required for the acquisition of real estate Limitations on the number of operations in which an investor may be involved in some sectors Foreign operators may be required to pay licence fees in foreign currency Foreign equity limitations on small yacht fleets For investments below SR 150,000, there is a requirement for project memorandum to be submitted where foreign investment is involved A single hotel may not own more than 15 per cent of the total room stock Residency requirement for tour operators ENTs and quotas on the entry and temporary stay of natural persons

31. GATS Commitments - Seychelles  In process of WTO accession

32. Applied Regime – South Africa Market AccessNational Treatment Potential limitation of foreign equity and numbers of foreigners holding strategic management positions and directorships Work permit or residency requirement for tour guides Local borrowing restrictions Prior approval required for the repayment of foreign loans Foreign companies are required to register as external companies in order to acquire real estate Withholding tax on sales of real estate beyond a specific threshold by foreign investors

33. GATS Commitments – South Africa Sector or SubsectorLimitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES A.Hotels and Restaurants (including catering) (CPC 641) 1)Unbound except for catering: None 2)None 3)None 4)Unbound except as indicated in the horizontal section. 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section. B.Travel Agencies and Tour Operators Services (CPC 7471) 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section. 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section. C.Tourist Guide Services (CPC 7472) 1)Unbound* 2)None 3)None 4)Unbound except as indicated in the horizontal section. 1)Unbound* 2)None 3)None 4)Unbound except as indicated in the horizontal section.

34. Applied Regime - Swaziland Market AccessNational Treatment Possible reservation of sectorsLimitations on access to land Possible joint venture requirements Discriminatory withholding taxes Possible limitations on the number of foreign nationals

35. GATS Commitments – Swaziland Sector or Subsector Limitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES A.Hotel and Restaurant Services (CPC 64110 and 64210) 1)Unbound* 2)None 3)None 4)Unbound except for chief executives, senior managers and chef cooks in the case of hotels and chef cooks in the case of restaurants 1)None 2)None 3)None 4)None

36. Applied Regime - Tanzania Market AccessNational Treatment Reservation of some tourism activities for nationals only Discriminatory procedure for maintaining hunting licences Hunting companies required to employ 50 per cent nationals Minimum investment requirements ENT concerning entry and stay of foreign nationals beyond quota Limit on access to land Limit on domestic borrowing

37. GATS Commitments - Tanzania Sector or Subsector Limitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES Hotels of four stars and above (CPC 641-643) 1)None 2)None 3)Acquisitions of domestic firms and mergers by foreigners are subject to approval The acquisition of land by foreigners or domestic companies which are deemed foreign because of foreign equity ownership is subject to approval 4)Unbound except for measures concerning senior managers that possess skills not available in Tanzania 1)None 2)None 3)Unbound 4)Unbound

38. Applied Regime - Zambia Market AccessNational Treatment Joint ventures and reservation of activities under Citizen Economic Empowerment Act Ministerial approval for licences for non-residents under Liquor Act Minimum capital requirementsDiscriminatory licensing fees for professional hunters and guides ENT under in Immigration and Deportation Act Residency requirement for directors under Companies Act Discriminatory withholding taxes

39. GATS Commitments - Zambia Sector or Subsector Limitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section 1)None 2)None 3)None 4)Unbound except as indicated in the horizontal section

40. Applied Regime - Zimbabwe Market AccessNational Treatment Possibility of numerical limitations on liquor licences Residency requirement for managers of liquor establishments Citizenship requirement for liquor licensees Residency requirement for directors Foreign equity limits under Indigenisation Act and Foreign Exchange Act Possibility of different incentives for foreign and domestic investors under the Investment Act Reservation of sectors under the Indigenisation Act and the Investment Authority Act Prior approval is required for foreign investors to acquire shares in existing companies ENTs for foreign staff

41. GATS Commitments - Zimbabwe Sector or Subsector Limitations on Market Access Limitations on National Treatment 9.TOURISM AND TRAVEL RELATED SERVICES A.Hotels and restaurants 1)None 2)None 3)None 4)Unbound, except as indicated in the horizontal section 1)None 2)None 3)None 4)Unbound, except as indicated in the horizontal section B.Travel agencies and tour operators C.Tourist guide services 1)None 2)None 3)Tour operators operating a vehicle of over three tonnes or using more than 20 vehicles must pay an annual levy for each park 4)Unbound, except as indicated in the horizontal section 1)None 2)None 3)Foreign-based tour operators must pay park entry fees in foreign currency. Only locally registered Safari operators may obtain concessions to offer hunts through "leasing"; or auctions by which hunting areas are leased out. 4)Unbound, except as indicated in the horizontal section

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