Centro de Promoção de Investimentos(Investment Promotion Centre)

The Investor’s Guide - Mozambique
Economic and Legal Aspects

2013The Investor’s Guide - Mozambique

Economic and Legal Aspects

Centro de Promoção de Investimentos(Investment Promotion Centre)

Contents
Welcome Remarks 				

05General Information about Mozambique06

Economic Outlook

07

Legal Aspects Related to Investments

08

Fiscal System

09

Foreign Exchange Law

10Labour Law

12Land Law

14

Public-Private Partnerships

16

Bilateral Treaties & Agreements

19

Investment opportunities

20

Public and Private Institutions Facilitating Investments 22

TECHNICAL TEAM
Serviços de Informação e Marketing
OWNERSHIP
Centro de Promoção de Investimentos
DIRECTOR: Lourenço SamboWelcome to

04

e to the Indian Ocean Pearl
We would like to invite the business community from all around the globe
to invest in Mozambique in various sectors with extraordinary potential
such as mineral resources, agriculture and industry, banking andinsurance, tourism, transports and communications, civil construction,
ports and railway, energy generation, among other booming sectors of
our economy.
The climate of peace and macroeconomic stability Mozambique has
enjoyed in recent years, as well as the ongoing improvement of thecountry’s business environment, focused on key vectors such as thesimplification of business start-up procedures, simplification of requisites
and procedures for the licensing of economic activities, adoption ofinternational norms, simplification of procedures for import and export
operations, labor law reforms and infrastructure development and a wide
range of fiscal benefits, have been crucial in attracting and retaining
foreign investment.
Mozambique is also signatory to investment promotion and protection
agreements with several countries around the globe, including theUnited Kingdom, Portugal, France, Republic of South Africa, Germany,
Belgium, China, Cuba, Denmark, Egypt, United States, Finland,
Indonesia, Italy, Mauritius, the Netherlands, Sweden and Vietnam.
The country’s geographic location also makes Mozambique a privileged
recipient of foreign direct investments as it provides importers andexporters in the region with the closest access to the trade routes of
the Indian Ocean and the shortest distance to East Africa, the Arabia
Peninsula, South Asia, East Asia, and in particular to the emerging
markets of China.
Moreover, in Mozambique you can produce goods and services not
only to the growing domestic market of 23 million consumers but
also to preferential markets such the Southern African Development
Community (SADC) with about 250 million consumers, the European
Union, United States of America and China.
Mozambique is open for you and we are ready to assist in all the necessary
steps for the establishment of your business.
We also hope that during your stay in Mozambique you will also enjoy
our tropical weather; magnificent beaches and paradisiacal islands,
diversified gastronomy and the warm hospitality of our people, whichhave always made visitors to want to come again and again.
05

General Information
Mozambique is situated on the southeastern coast of Africa. It borders on Tanzania to thenorth, Zambia, Malawi and Zimbabwe to the west and South Africa and Swaziland to the south.
This location puts the country into a strategic position in the Southern African region with its
ports being the first choice for regional importers and exporters as they give easier access tointernational markets.
Mozambique has 11 provinces from north to south: Cabo Delgado, Niassa, Nampula, Tete,
Zambézia, Manica, Sofala, Inhambane, Gaza, Maputo Province and Maputo City.
Capital: Maputo
Area: Mozambique has an area of 799,390 Km², of which 786,390 Km² are firm land and 13,000
Km² of interior waters.
Population: Mozambique has a population of 23,049,621 of whom 11,108,128 are men and
11,941,493 are women (2007 Census, INE).
Languages: The official language is Portuguese. English is widely spoken in the main cities,
as a business language.
População: Moçambique tem uma População de 23.049.621 habitantes (2007, INE).
Currency: Metical (MT)
Hour: GMT + 2 hours
Religions: Christian (Catholic and protestant), Islam, Hinduism and Traditional Religions.
Legal System: The Mozambican legal system belongs to the Roman-Germanic (“civil law”).
Code for international calls: +258
Climate
The climate varies from sub-tropical to tropical (south to north). The temperature varies from18, 3ºC to 20, 0ºC during the dry season (May - September) and from 26, 7ºC to 29, 4ºC during
the rainy season (October - April).
Visas
The entry visa can be obtained from Mozambican embassies and consulates in various countries
in Africa, Europe, America and Asia.
Mozambique has introduced a border visa, which can be obtained at the main entry points. Thisvisa is valid for 30 days and is renewable for the same period.
The visa can also be requested from the National Immigration Directorate, Av. Ho Chi Min nº316, in Maputo City, Tel +258 21 320 472.Fax: +258 21 321 075 or +258 21 320 395.
Under bilateral agreements, citizens and bearers of passports from the Republic of South Africa,
Botswana, Swaziland, Mauritius, Malawi and Zambia are exempted from entry visas.
Business Hours
Public Sector: Monday to Friday from 7:30 to 15:30 hours.
Private sector: Monday to Friday from 8:00 to 12:30 hours, and from 14:00 to 17:30 hours.
Shops open from 08:00 to 18:30 hours on weekdays and on Saturdays from 08:00 to 13:30 hours.
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Banking

More then 40 commercial banks and insurance companies with participation of both local
and foreign capitals operate in Mozambique with their headquarters located in Maputo andbranches in the rest of the country.
In addition, several microfinance banks, credit cooperatives, financial leasing companies.

Economic Outlook
Mozambique is one of the fastest growing economies among non-oil exporting countries,
with an average annual growth of 7.6 % over the last five years, based mostly on sectors
such as, agriculture and agro-industry, hotels and tourism, fisheries and aquaculture,transport and communications, banking and insurance, public works and construction,
services and mineral resources and energy, among others.
The continuation of high foreign direct investment (FDI) inflows, mostly in extractive
industries, together with strong agricultural growth and infrastructure investment will
drive growth to two digits in the next decade.
The year 2011 marked a turning point in the country’s economy, with the first overseas
export of coal marking the birth of Mozambique as a world exporter of minerals, andpaving the way for the country to secure its future fiscal sustainability through yields
from natural resources.

Key Economic Indicators
Indicators

Set 2012
2005 2006 2007 2008 2009 2010 2011 2012 target

Real GDP
Real GDP ( Annual Growth as %) 8.4 8.7
335 363
GDP Per capita (in USD)
Inflation
10.3 9.4
Inflation (end of period)
External Sector-11.6 -11.2
Current Account (% of GDP)
Foreign D. Investment (% of GDP) 1.6 2.2
4.6 4.43
Coverage Months
Other Indicators as % of GDP
13.2 14.7
Credit to the Economy
8.5 13.9
Public Investment
10.1 6.9
Private Investment
2.2 2
Budget Deficit after Grants

7.3
394

6.8
469

6.3
457

7.1
423

7.3
450

8.0
-

7.5

4.2

6.2

5.5

16.6

5.5

1.23

5.6

-9.9 -12.4 -12.6 -13.5 -13.2 5.3 6.2 9.2 10.7 17.15
4.3 5.6 5.75 5.16 5.33

5.2

14.9 18.7 26.8 29.3 27.5
14.5 11.6 13.1 14 14.2
6.2 6.9 6.3 7.4 9.6
2.9 2.6 5.5
4
6.3

15.8
10.1
6.4

-

Foreign Trade

Exports: In 2011, the traditional commodities with the most significant growth, as well as
the respective growth rate were cotton (27,0 per cent) tobacco (17,0 per cent) and wood (35,2
per cent).
Still during the period in review, under the segment of megaprojects, it was initiated theextraction and export of coal, which revenues amounted to USD 21,2 million.
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On the other hand, exports from the Moma heavy mineral sands projects grew by 78,8 per cent,natural gas by 21,1 per cent and aluminum by 17,0 per cent. Other exports include aluminium,
electricity, natural gas, titanium, coal, prawns, sugar and cashew nuts.

Legal Aspects Related to Investment

Private investments realized in the Republic of Mozambique enjoy a set of benefits, which
include Corporate Tax and Customs duties deductions among others.

Foreign Direct Investment

The minimum value of foreign direct investment resulting from the inflow of own capital fromforeign investors, is set at the equivalent of 2.5 million MT for the specific purposes of transfer
of profits abroad and the re-exportable invested capital.
The real value of foreign direct investment, for registration and eligibility for guarantees
and incentives established for this purpose shall consist of the sum of the values of equity,
shareholders’ loans without interest and / or supplementary capital provided by investors
themselves , as well as exportable profits that might have been reinvested in the country.

Guarantees to Investment:

The guarantees envisaged in the legislation in force comprise:• Legal protection on property and rights, including industrial property rights;• No restriction of borrowing and payment of interest abroad;• Transfer of dividends abroad;• Arbitration according to ICSID or ICC rules for the resolutions of disputes oninvestments;• MIGA and OPIC services on issues related to investment risk insurance.
Investment Incentives
The Investment Law grants certain tax and customs benefits depending on the amount, locationand sector of investment activity. The incentive schemes applicable in Mozambique are as
follow:

Generic Fiscal and Customs Benefits

The investments carried out under the Investment Law are exempt from payment of customs
duties and VAT on capital goods classified in Class K of the Customs Tariff and related
accompanying parts and accessories.

Tax credit per investment

Investments carried out in the City of Maputo benefit, for a period of five tax years, from adeduction (not to exceed the tax payable in respect of the investment project activity) from
Corporate Income Tax (IRPC) that is equal to 5% of the total investment actually realised.
In the case of investment projects carried out in the other provinces, the percentage, asestablished in the preceding paragraph 1, is 10%.

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Apart from these there are other specific regimes for:• Agriculture and Fisheries• Trade and Industry in Rural Areas;• Transforming and Assembly Industry;• Creation of Basic Infrastructures;• Industrial Free Zones;• Tourism and Hotels;• Large Scale Projects• Rapid Development Zones;• Investments under the Mining Law;
• Investments under the Petroleum Law• Special Economic Zones• Science and Technology Parks

Procedures for obtaining Fiscal benefits
The beneficiary of fiscal benefits shall comply with the following general prerequisites for
obtaining fiscal benefits, without prejudice to other specific requirement establishment by law:
• Tax registration, namelyacquisition of a personal tax identification number (NUIT);• Have organized books and accounts in compliance with the General Accounting Plan andrequirements of the Corporate Income Tax Code ( IRPC) and the Personal Income Tax Code
(IRPS);• Not have committed any infraction of a tax nature

Fiscal System
The Taxation System in the Republic of Mozambique integrates national and municipal taxes.
The taxes of the National Taxation System are classified as direct and indirect, acting at various
levels, namely (i) direct taxation on income and wealth and (ii) indirect taxation on expenditure.
The direct taxation on incomes is made through the following system of taxes: Corporate
Income Tax (IRPC) and Personal Income Tax (IRPS).
The indirect taxation, which comprises taxes on expenditure, integrates: Value Added Tax(VAT), Specific Consumption Tax (ICE) and Customs Duties.
The Corporate Income Tax (IRPC) – is taxable on gained incomes, during the taxation period,
from tax payers, namely commercial or civil companies, cooperatives, public companies andother corporates both public and private, entities with no legal personality, whose incomes are
not subject to taxation in the form of IRPS or IRPC.
• The rate for IRPC is 32%.
• The agricultural and aquaculture will benefit from an 80% rate reduction until 31/12/2015 andfrom 2016 top 2025 will receive a 50 % reduction.

09

The Personal Income Tax (IRPS) – is taxable on the global annual value of income; is paid bysingular persons residing in the Mozambican territory and by those not residing in the country
but gaining income from it.
The Value Added Tax (VAT) - taxable on the sale of goods and provision of services in thenational territory by a tax payer acting as such, as well as on importation of goods. The
applicable rate for VAT is 17%.
The Specific Consumption Tax (ICE)- is taxable, in a selective manner, on the consumption ofcertain goods, produced or imported. The general rate of customs duties on consumption goods
is 20%.
Customs Duties – taxable on imported and exported goods in the customs territory, whose
values vary in the following manner:• 2,5% for raw materials;• 5% for capital goods (class K);• 7,5% for intermediary goods;• 20% for consumption goods.
Under the SADC trade protocol implementation framework various products from the SADC
region countries benefit from exemptions from payment of customs duties.
The Taxation System is completed by other taxes, namely the Seal Tax, Tax on Successions andDonations, SISA, Special Tax on Gambling, National Reconstruction Tax, and Vehicle Tax andother legally established taxes and specific charges.

Social Security

The registration of workers and their respective employers with the National Social Security
System is mandatory.
The fee for social security is 7%, being 4% paid by the employer and 3% by the employee.

Foreign Exchange Law

Foreign direct investment shall be subject to registration with the Bank of Mozambique, whichshall be effected within a period of 90 days, counting from the date of the authorization of thecompetent entity, or of the effective entry of the investment amount. The registration of theinvestment, for the purposes of forex control, shall be effected by completing the respective
form provided by the Bank of Mozambique, and attaching the following documents:a) identification documents, and a copy of the bank bordereau issued by the investor’s bank,proving the receipt of foreign currency by the enterprise, when the investment is made by wayof the entry of foreign currency;b) identification documents and proof of the definitive entry of goods, when the investment
is made by way of the import of equipment, machinery or other material goods set out in therespective terms of authorization, and the respective value shall be determined with reference to
CIF prices, in terms of applicable investment legislation;c) For the purposes of registration, in those cases in which the investment is made by way of theright to utilize patented technologies and registered trademarks, its value shall be determinedon the terms set out in the respective authorization;d) A failure to register the investment within the time period set out shall result in the non
10Transfer of income from foreign direct investment
Forex registration of the transfer of income from foreign direct investment, in the form of profits
or distributed dividends, shall be effected against the presentation, by the interested party, to theintermediary bank, of the following:a) Identification of the parties involved;b) Proof of registration of the investment with the Bank of Mozambique;c) Declaration, issued by an independent auditor, confirming that the profits flow from thefinancial year or years in question, and from operations relating to the activities of the company,
explaining whether the profits were determined prior to or after any transfers required by Law;d) Proof of the consent of the competent corporate body, or, in the case of the transfer ofdividends, a resolution of the General Assembly meeting which decided upon the division of
profits;e) Proof that tax owing, in respect of the transaction, has been paid or guaranteed.

Transfer of income from portfolio investments
Forex registration of the transfer of income from portfolio investment returns, in the form ofinterest, dividends or capital gains, shall be effected against the presentation by the interested
party to the intermediary bank of the following:a) Identification of involved parties;b) Proof of entry of funds into the country;c) Certificate pertaining to the amount to be transferred, namely, coupon, statement or other;d) Proof that tax owing, in respect of the transaction, has been paid or guaranteed.

Transfer of income flowing from loans or shareholder’s loans
Forex registration of the transfer of income flowing from loans or shareholders’ loans granted
by a non-resident entity, in the form of interest, shall be effected against the presentation, by theinterested party, to the intermediary bank, of the following:a) identification of interested parties;b) proof of forex authorization for the loan, or shareholders’ loan;c) proof of registration of the disbursement;d) repayment plan, or debit note;e) proof that tax owing, in respect of the transaction, has been paid or guaranteed.

Transfer of income from bank deposits, made within the country by non-resident
entities
Forex registration of the transfer of income from bank deposits made within the country by
non-resident entities, in the form of interest, shall be effected against the presentation, by theinterested party, to the intermediary bank, of the following:a) identification of the parties involved;b) proof that tax owing, in respect of the transaction, has been paid or guaranteed.
11

Transfer of income flowing from other forms of capital investment

Forex registration of the transfer of income flowing from other forms of capital investment by
a non-resident entity shall be effected against the presentation, by the interested party, to theintermediary bank, of the following:a) identification of the parties involved;b) proof of forex authorization for the capital operation;c) proof that tax owing, in respect of the transaction, has been paid or guaranteed.

Real estate investment

Applications for authorization for the making of real estate investment by a resident, abroad, orby a non-resident, in the country, shall be effected by completing the standard form provided
by the Bank of Mozambique, duly substantiated by the following documents:a) identification documents of the parties involved;b) property registration documents, duly authenticated;c) promissory agreement, containing the terms and conditions on which the transaction
is intended to be conducted;d) document evidencing income or payment methods of the buyer;e) proof of compliance with tax obligations pertaining to the transaction.

Opening and transacting of accounts

Opening and transacting of accounts with offshore financial institutions
The opening and transacting of accounts by resident entities with offshore financial institutions
shall be subject to the authorization of the Bank of Mozambique.
The application for authorisation shall be effected by completing the standard form provided
by the Bank of Mozambique, duly substantiated by attachment of the following documents:a) identification documents;b) proof of justification for the opening of an account offshore, as well as funding
sources.
An account to be held by a resident entity offshore shall preferably be opened with a financial
institution which corresponds to a bank authorised to operate in Mozambique.
The holder of the account shall inform the Bank of Mozambique of the number and domicile
address of the account so opened within a period of thirty days, counting from the date of its
opening, and shall provide an account statement, reflecting the transactions effected thereon,
on a quarterly basis.

Labour Law

Contracting foreign workers
The contracting of foreigners by national and foreign employers is subject to authorization by
the Minister who oversees the area of labor, or the entity to which the Minister delegates, except
in cases foreseen in Article 5 of the Labour Law.
General conditions for the contracting of foreigners
Employers must do the most they can to create conditions for the integration of Mozambican
workers in positions of greater technical complexity and in management and administrative
positions in companies.

12

Contracting under the quota system

Under the quota regime the employer may employ foreigners subject to communication to the
Minister of Labor, or entities delegated by the Minister, within fifteen days of having admitted
the foreign employee. The communication of admission, a model of which is annexed to theregulation, must indicate the degree of realization of the quota.
In the calculation of the number of foreigners to be admitted under the quota the rounding upof numbers is not permitted.
Small companies may employ one foreign citizen, even if the total number of national workers
is less than ten

Quota regime

Based on the classification of the company, the employer may employ foreign citizens, inaccordance with the following quotas:a) Five percent of the total workforce, for large companies (employing more than one hundred
workers)b) Eight percent of the total workforce, for medium companies (employing more than ten and up
to a maximum of one hundred workers)c) Ten percent of the total workforce, for small companies (employing up to ten workers)
The number of workers to be considered corresponds to the average number of workers
employed during the previous calendar year. In the first year of activity, the number of workers
to be considered is the number on the day of start-up of activity.

Contracting under the quotas provided in investment projects

In investment projects approved by the Government which provide for the employmentof foreigners in greater or lesser number than the quota regime, a work authorization is not
required, and is replaced by the requirement to communicate the employment of a foreigner
within 15 days of their entry into the country.
The previous provision is without prejudice to special regimes in force in industrial free zones.

Short term work

Formalities and regime
Short-term work is considered to be work for periods not longer than 30 consecutive orinterspersed days, in the same year, by foreign citizens including those already under contract
to the parent company or its subsidiaries in other countries.
Short-term work is exempt from work authorization.
The employer or its representative must submit, in advance, to the entity responsible for laborin the province where the foreign citizen is to work, a communication in duplicate including theidentity and qualifications of the employee, the reason for contracting the employee, theactivities they will perform, and the precise start and end dates for their activities.
Short term work does not fall within the quota system and is exempt from payment of fees.
When duly justified by the employer the short term work period may be extended but never for
longer than 90 days in one year.
The contracting of foreign citizens is done by means of an application addressed to the Minister
responsible for labor.
13

Land Law

In the Republic of Mozambique land is the property of the State and cannot be sold or otherwise
alienated, mortgaged or encumbered.
Foreign individual and corporate persons may be holders of the right of land use and benefit,
provided that they have an investment project that is duly approved and the following conditions
are observed:a) in the case of individual persons, provided that they have been resident in the Republic ofMozambique for at least five years;b) in the case of corporate persons, provided that they are established or registered in the
Republic of Mozambique.

The right of land use and benefit shall be extinguished:a) By failure to fulfill the exploitation plan or investment project without justifiable reasons
within the time limits established in the application approval, even if tax obligations are being
complied with;b) By revocation of the right of land use and benefit for reasons of public interest, proceeded by
payment of fair indemnification and/or compensation;c) Upon the expiry of its term or a renewal thereof;d) By renunciation by the titleholder.

Private investment projects

1. For the purposes of private investment projects that involve the acquisition of the right ofland use and benefit, the land shall be subject to prior identification, which shall involve theCadastre Services, the local administrative authorities and the local communities and shall be
documented in the sketch and descriptive report. The opinion of the District Administrator shallrefer to the existence or otherwise of rights of land use and benefit acquired by occupancy inrespect of the area applied for. In the event that the area applied for is subject to other rights,
the opinion shall contain the terms under which the partnership between the applicant and theholders of the right of land use and benefit acquired by occupancy shall be governed.

Provisional authorisation

1. Once the application process is completed, the Cadastre Services shall submit the proposal
to the Governor of the Province for decision, in cases within the competency of the Governor.
2. In all other cases, after review by the Governor of the Province, the application process shallbe sent to the Central Cadastre Services, who shall submit it to the competent authority fordecision.
3. In both cases, the authorisation issued shall be provisional. In the case of Mozambican
citizens, the authorisation shall be valid for a period of five years and for foreign citizens theauthorisation shall be valid for two years.

Transformation of a Provisional Authorisation into a Definitive Authorisation

Upon expiry of the term of the provisional authorisation or, if the interested party so requests,
even before the end of this term, an inspection shall be carried out to verify the fulfillment of
the proposed undertaking or exploitation plan in accordance with the approved schedule. Oncethe fulfillment of the undertaking or the exploitation plan has been ascertained, the definitive
authorisation of the use and benefit of the land shall be given and the respective title shall be
issued.
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15

Public-Private Partnerships
Legal regime for contracting PPPs
The general legal regime for contracting PPP undertakings is the public tender, and the rules
governing the public procurement shall apply on a subsidiary basis.
Considering the public interest and once the requirements legally provided are met, thecontracting of a PPP may take the modality of tender with prior qualification or a two-stage
tender.
Proposals of PPP undertakings at private initiative are subject to public tender intended todetermine or ensure the technical and quality terms, the price and further conditions offeredby the proponent, which shall benefit from the right and preference margin of 15% in theassessment of the technical and financial proposals resulting from such tender and without any
right to compensation for costs incurred in the preparation of the proposal.
Maintenance of State ownership
The public domain property assets that are part of the PPP undertaking, including, whereapplicable, the land resource assigned to the undertaking, as the fundamental asset exclusively
owned by the State, via its respective DUAT, remain the inalienable property of the State andcannot be given as security, without prejudice to the enjoyment of the right of use and usufruct
contractually granted to the contracted party.
General principles on prevention and mitigation of risks
The prevention and mitigation of risks by the contracting parties constitutes their permanent
obligation in the entire process of the PPP undertaking.
The Government and the contracting party shall ensure the prevention and the mitigation of
occurrence of the following risks:a) Political and legislative risks, arising from the unilateral adoption, by the Government or public
institutions, of measures or the practice of acts with negative and adverse effects on the normal
implementation, operation and management of the PPP undertaking or its competitiveness andeconomic and financial feasibility;b) Conflict of interests of an institutional nature arising from the full or partial concentration or
accumulation, in the same public entity, of the functions of regulatory authority and granting
authority, as well as of quota holder or shareholder of the contracted party;c) Related to the granting of land and public planning.
The Government shall further assume, as applicable, the implications arising from the granting
or facilitation of access by the PPP undertakings to financial guarantees or facilities allowed
under the terms of articles 10, 11 and 20 of this Law.
Contractual modalities of PPP undertakinga) Concession contract;b) Assignment of operation contract;c) Management contract.
The concession contract may assume one of the following sub-modalities of concession:a) Build, Operate and Transfer (BOT);b) Design, Build, Operate and Transfer (DBOT);c) Build, Own, Operate and Transfer (BOOT);
16d) Design, Build, Own, Operate and Transfer (DBOOT);e) Rehabilitate, Operate and Transfer (ROT); orf) Rehabilitate, Own, Operate and Transfer (ROOT).
.

For Large-Scale Projects
Main purpose of the LSPs

LSP undertakings have as their main purpose to develop, in the Country, national capacity for
efficient operation and use of resources and other national or imported goods and factors of
production, with a view towards the provision of goods or services for the fulfillment of internalor external market need, enabling the generation or saving of financial and foreign exchange
resources for the Country.

Free initiative of business and LSPs’ contractual modality

1. Potential investors and concessionaires enjoy the right to free private initiative in carrying out
LSP undertakings, except in cases expressly reserved to the ownership or exclusive operation of
the State or the investment initiative of the public sector and those in respect of which the law
requires the conduct of a public tender.

For Business Concessions
Main purpose of the BCs

The BC undertakings have as their main purpose to develop, in the Country, national capacity
for the efficient operation and use of natural and labor resources and other national property
assets, with a view towards the provision of goods or services to meet internal or external market
needs and enabling the generation or saving of financial and foreign exchange resources for theCountry.

Legal regimes and modalities for contracting BCs

The contracting of BC undertakings is subject to compliance with the rules and contracting
modalities provided in the sector-specific legislation as well as the general principles applicable
to public contracts.
The contracting of a BC undertaking, which includes LSPs involving concession of the use ofnatural resources, takes one of the following contractual modalities:a) Concession contract, under one of the following sub-modalities of concession:(i) Build, Operate and Transfer (BOT);(ii) Design Build, Operate and Transfer (DBOT);(iii) Build, Own and Operate (BOO);(iv) Design, Build, Own and Operate (DBOO);(v) Rehabilitate, Operate and Transfer (ROT); or(vi) Rehabilitate, Operate and Own (ROO).
b) Assignment of operation contract, in the modality of assignment of operation of rights andobligations which are the object of the contract;17c) Management contract of the undertaking, infra-structure and property assets of the State orother public entity;d) Any other form of title of rights granted by the Government for prospecting, exploration andextraction or use of natural resources or other national property assets.

Sharing of Benefits
Types and sharing of benefits

1. The benefits applicable, taking into account the particularities of each PPP, LSP and BC
undertaking, include financial benefits and socio-economic benefits.
2. The sharing, with equity, of financial and socio-economic benefits is conducted by assessmentand establishment, in the relevant contract, of their dimension and distribution between thecontracting parties, taking into due consideration the protection of the rights inherent to thefunders, the State, the national economy and Mozambican society, in particular:a) the quantity and quality of the resources made available by each party and the respective
opportunity cost;b) the degree of responsibility of each party in enabling and implementing the various phasesof the undertaking;c) the degree of risk, objectively assessable, incurred by each party, associated with the guaranteeof returns and profitability of the resources invested;d) the protection of the Country’s economic competitiveness and of a business environment
favorable to attract national and foreign investment; ande) the need to preserve benefits for current and future generations.

Financial benefits

The financial benefits for the Country from each PPP, LSP and BC undertaking shall be
expressly referred to in the contract to be concluded between the contracting party and thecontracted party, namely:a) the participation reserved for sale, via the stock market in favor of the economic inclusion
on commercial market terms, preferably of Mozambican natural persons, in the share capitalof the undertaking or in the joint venture equity, whether or not foreign investment is involved,
guaranteed by:(i) the State or other public entity appointed thereby, in a percentage not less than 5% nor greaterthan 20% of the referred capital; or(ii) the entity implementing the undertaking, of the same level of participation, for unconditionalsale, under the same terms and conditions provided inb) the opportunity for Mozambican public or private corporate persons to participate in theshare capital of the undertaking or the equity of the joint venture, under terms to be negotiatedand agreed by the parties, without prejudice to the provisions of (i) and (ii) of the precedingclause a).
c) the generation of positive exchange effects on the balance of payments, whether by means ofgeneration of exchange resources or savings for the Country;d) the generation of tax revenues and positive contribution to the public treasury;e) the generation and distribution of profits or dividends, under the terms resolved by the
corporate bodies of the undertaking’s company; and18f) the equitable sharing of the extraordinary direct benefits, protecting the Country’s
economic competitiveness and under the contractually agreed terms and in any one or a
combination of the following forms:(i) carrying out of reinvestment in the national territory;(ii) constitution of a reserve for carrying out additional investments or to cover extraordinary
losses of the undertaking;(iii) financial applications carried out and maintained in the Country.

Socio-economic benefits
The PPP, LSP and BC undertaking concession contract shall also contain clauses expressly
specifying the socio-economic benefits to be provided by each undertaking, at its own
expense, for the national economy and Mozambican society, namely, the benefits related to:a) creation, rehabilitation or expansion of infrastructure for production or provision ofservices, in connection or associated with the undertaking;b) offer of work posts and professional training programs for Mozambican employees;c) programs and actions of technical-professional training and transfer of technology andknow-how to the Country;d) increase and maintenance of the production and export capacity and of the capacity tosupply internal market needs;e) contribution to the development of Mozambican small and medium enterprises, via
business and technological linkages between the undertaking and such enterprises;f) carrying out programs of activities or social responsibility projects, development andsocial sustainability projects with the local communities, for the account of the undertaking.

Bilateral Treaties and Agreements
Investment Promotion and Reciprocal Protection Agreements
The country has signed investment promotion and reciprocal protection agreements withthe following countries: South Africa, Germany, Algeria, Belgium, China, Cuba, Denmark,Egypt, USA, USA (OPIC), Finland, France, Indonesia, Italy, Mauritius, Netherlands,
Portugal, Sweden, United Kingdom, Vietnam and Zimbabwe.
Agreements to Prevent Double Taxation and Fiscal Evasion
Mozambique is signatory to agreements with Portugal, Mauritius, United Arab Emirates,
and the Autonomous and the Special Administrative Region of Macau.

19Investment opportunities

Mozambique with about 800.000 Km2 is endowed with enormous investment opportunities
in various sectors, notably the following, in order of their importance and potential andcompetitiveness.
• Agriculture: This sector offers vast opportunities for the production of cereals, fruits,
flowers, vegetables, for the local market and for export. The country has been exporting various
products, notably baby-corn, flowers, citrus, cashew nuts, various fruits, pimento and paprika,
to competitive markets in Europe. The Zambezi valley represents an excellent opportunity forthe agricultural sector, according to pre-feasibility studies.
• Fisheries and Aquaculture: This sector has been developing with the presence of local andforeign companies and has seen a strong growth and strong present in European and Asianmarkets in terms of prawns, and various sea products. The country has an enormous potential
all along its 2,800 km Indian Ocean coast line, combined with the excellent natural conditions
favourable for aquaculture;• Industry: One of the country’s biggest challenges is adding value to its primary products andthus maximizing its natural resources. This sector offers investment opportunities almost allover the country. The textile industry, agro-industry, the aluminium, iron and steel, coal and gas
are some examples to take into consideration;• Tourism and Hotels: This sector has been growing steadily in recent years given the major
potential that the country has and the public investments made in terms of infrastructures andmeans allowing access to previous inaccessible locations. The country offers unique investment
opportunities in national parks and reserves, the possibility of investment in private game farms
in the interior of the country, benefiting from fauna and flora, combined with beach tourism
along the 2,700 km coast, and on islands and archipelagos. The historic and cultural tourism,
and business tourism has been growing in recent years representing a very viable option in
many regions of the country;• Public Infrastructures: The Government of Mozambique in partnership with the private
sector has been investing in the development of public infrastructures, namely roads, bridges,
telecommunications, energy, among other sectors. Consequently various opportunities aboundin these sectors and investors are therefore challenged to create innovative ways of investingin these sectors and ensure turnover of their capital as well as profit, through BOT, or othermutually advantageous manners.
• Mineral Resources: The diversity and vastness of unexploited mineral resources thatthe country is endowed with represent major investment opportunities for the exploration,
extraction, processing and utilization of various types of resources, of which the most important
are natural gas, coal, gold, titanium, ilmenite, zircon, rutile, tantalite, marbles, and precious
stones.
• Energy: With the start of commercial extraction of natural gas, rehabilitation and constructionof new hydroelectric dams, start of the exploitation and foment of alternative and renewableenergies such as solar, oleic, and biofuels (bioethanol, biodiesel e biogas), the country has
expanded its energy generation capacity potential to more than 16,000MW. Taking into account20

Opportunities in the Nacala Special Economic Zone (ZEEN)The Nacala Special Economic Zone is situated in the north of Mozambique – Nampula Province,
about 200 km from the provincial capital Nampula, 500 km in direct line from Mozambique’sborder with Tanzania, about 1,800 km from the country’s border with South Africa, and about
620 km from the Eastern border with Malawi.
Its position on the Mozambican coast, its natural conditions and the existence of a deep water
port determine the importance of Nacala, as a strategic hub for the development of country andthe southern Africa. - The port of Nacala is the third largest deep water port on the eastern coastof Africa.
The Nacala Special Economic Zone is the end of the transport corridor formed by the road thatlinks the provincial capital (Nampula), the interland countries, in particular Malawi and Zambia,
known as the Nacala Development Corridor (CDN) which makes the area a highly potential hubof economic and social development.
There are enormous opportunities in the following areas among others:

Agro-processing

Given the agricultural potential of the region in which Nacala is located (North of the Country),
the area of agro-processing also constitutes a huge opportunity for investment, highlighting theneed for processing products such as: (i) Maize (ii) Peanuts, (iii) sesame (iv) Cassava (v) Beans,(vi) vegetables, (vii) cashew nuts, (viii) Cotton, (ix) tobacco, (x) Wood, (xi) tropical fruits,
especially bananas and mangoes, among others.

Technology Parks

Nacala offers opportunities for the establishment and development of technology parks for the
production, assembly, improvement and technological innovation in all areas.

Tourism

Nacala has an enormous tourist potential.Occupying one of the top places in terms of attracting
foreign investment, its strategic tourist products are: sun, sea, sand, ecotourism, culture, sports,
among others. As an exotic tourist destination, investment opportunities and business in the
tourism sector are endless, mostly in the construction of Hotels, Restaurants, Water Sports,
Exploitation of marine parks, and more.

Services

Nacala is an excellent investment opportunity in services, including transportation, in its various
aspects, communications, industrial maintenance and repair, financial services, technicalassistance, among others.

Infrastructure

Being the construction of infrastructure one of the pillars of development and necessary condition
to make the economy competitive, there are great business and investment opportunities in theconstruction, expansion and maintenance of roads and bridges, condominiums, industrial plants
and industrial science and technology parks, among others.Corporation, the Industrial
Development Corporation of South Africa and the State of Mozambique.

21

Public and Private Institutions Facilitating Investments
Ministry of Plaanning and Development
Av. Mártires de Inhaminga 336, Maputo
C.P. 276, Maputo
Telephone: +258-21430152/5
Fax: +258-21431028/+258 - 21424109
www.mtc.gov.mz

CEPAGRI – Centre for the Promotion ofAgriculture
Rua da Gávea n°33 - 1°andar Maputo –Moçambique(+ 258) 21 300 626/ (+258) 21 30 62 35/ (+258)
21 30 79 57(+258 21 42 74 36)
www.cepagri.gov.mz

CPI - Investment Promotion Centre
Rua da Imprensa, 332 R/C
Caixa Postal 4635, Maputo
Tel: (+ 258) 21 313310; (+ 258) 21 313375
Fax: (+ 258) 21 313325
E-mail: cpi@cpi.co.mz
Website: www.cpi.co.mz

IPEME – Institute for the Promotion of Smalland Medium Enterprises
Av. 25 de Setembro No. 152,1st Floor
MaputoTelephone: (+258 21430272)
Fax: +258 21532669
www.ipeme.gov.mz

GAZEDA – Free Zones & Economic Special
Zones Office
Av. 24 de Julho No. 3549 3rd Floor
MaputoTelephones: + 25821400632/635
25821300626
Fax: +25821400632
Cell phone: + 2580823253570
www.gazeda.gov.mz

IPEX – Export Promotion InstituteAv.25 de Setembro No.1008, 2nd Floor,Maputo
Telephone: +25821307257/8
Fax: +25821307256/300193
www.ipex.gov.mz
CTA – Confederation of Economic Associationsof Mozambique
Rua Fernando Ganhão, N. 120
MaputoTelephone: + 258 21 49 19 14/64 or + 258 21 49
19 30 89
Fax: + 258 21 49 30 94; www.cta.org.mz

Ilmenite - Moma - Nampula Province

Centro de Promoção de Investimentos(Investment Promotion Centre)

CPI is a government agency with a mandate• Identification of potential financial partners

to attract and facilitate the establishment

and/ or technology for the establishment ofof private domestic and foreign direct

joint ventures;investment. We are a One-Stop-Shop for•investors and provide the following services.

investment opportunities;•

Identification and dissemination of
Promotion of business development• Institutional assistance to investors in theassistance programmes, particularly for

approval and implementation of investment

domestic investors;

projects;• Institutional assistance in the acquisition of•business licenses;

Ensure investors get access to fiscal

incentives

provided

by

law

for

the

• Capacity building programmes for local

establishment of their projects;

suppliers;• Promotion of business linkages between•

domestic and foreign companies, SMEs andimplementation of projects and identification

large enterprises;of constrains.

Monitoring and follow up of theEntrance to the Port of Nacala - Nampula Province

Mozambique

Also Ideal for Leisure

Mejumbe Island