Investment
in Mozambique
Legislation
The framework for both national and foreign investment in Mozambique is
contained in the 1993 Investment Law. This law spells out the procedures to be
followed, guarantees to be given and financial incentives offered to all
investors.
To be eligible for the guarantees and financial incentives, the minimum
value of direct national investment is fixed at the equivalent in national
currency of US$5,000 and, for the specific purpose of remittance of profits
abroad, the minimum value of direct foreign investment is fixed at US$50,000.
Financial incentives include:
Exemption from customs duties on equipment for new investment project
feasibility studies, implementation and operations.
For investments in new or paralyzed undertakings, a 50% reduction in
Industrial Contribution Tax and Supplementary Tax rates for a maximum of ten
years except in the case of investments located in the less-developed
provinces, where the initial reduction is 80% with an effective further
reduction of 50% for six years.
For investments in operating enterprises, deduction from taxable income of
100% of investments made in new equipment, construction of plant and/or
agricultural infrastructures for five years.
The right to consider certain expenses as losses, such as:
-costs of construction or rehabilitation of public infrastructures;
-costs of training Mozambican workers;
-private purchases of works of art, or other contributions to cultural
development.
Guarantees offered include:
- Guarantees over security and legal protection of property rights;
- Rights to the import of own-equity capital or loans to carry out Investments;
- Entitlement to just and equitable compensation in the event of expropriation
based on absolute necessity and weighty reasons of public interest, health and
public order;
- Rights to the remittance abroad, within 90 days, of;
- payment of royalties and other fees for contracting and transferring
technology;
- loan repayments and interest charges due abroad;
- amounts paid as just and suitable compensation, if such occurs; and
- repatriation of capital invested upon liquidation or total or partial sale of
the undertaking.
In addition to the Investment Law, investor confidence should be
encouraged by the fact that Mozambique is a
member of the Multilateral Investment Guarantee Agency (MIGA) and of the US
Overseas Private Investment Corporation (OPIC), which insure investors against
non-commercial risks and provide loan guarantees to support investments in
developing countries.
The country is also a member of the International Finance Corporation
(IFC), a World Bank affiliate whose main function is to help private enterprises
in developing countries, mobilizing domestic and foreign capital, including its
own, for this purpose.
Mozambique is also
a signatory of several multilateral agreements, including those of ICSID and
the Paris-based International Chamber of Commerce, for the arbitration of any
disputes that may occur in relation to investments.
Internally, an Investment Promotion Centre (CPI) is the institution
responsible for the promotion of investments, for advising the Minister of
Planning and Finance on matters concerning investments and for assuring the
implementation and fulfillment of investment legislation.
For
More information about how to invest in Mozambique,
please visit: Mozambique
Investment Promotion Centre
(CPI).
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