Republic of Mozambique
Investment Promotion Centre (CPI)

INVESTMENT CLIMATE AND
OPPORTUNITIESIN MOZAMBIQUE
Japan, March 2015

CONTENTS

1Mozambique at a Glance

2

Investment Flows3

Legal Framework

4

Investment Opportunities and Potential

5

How may CPI assist you?

MOZAMBIQUE AT A GLANCE

Area: 799.380 km2
Population: 25.727million
GDP (Nominal): USD 17.609 billion
Per capita: USD 700
GDP Growth Rate (3rd Quarter 2014 ): 7.4%
2014 Inflation (CPI) : 2.6%
Source:INE.

MACROECONOMIC PERFORMANCEWorld´s ten fastest-growing economies*
Annual average GDP growth, %2001-2010

5.5

5.5

7.4
3.5
7.3

7.3

20112012

2013

1201120122013

2GDP Growth Rate %Inflation Rate %2011-2015

Angola

11.1

China

9.5

China

10.5

India

8.2

Myanmar

10.3

Ethiopia

8.1

Nigeria

8.9

Mozambique

7.7

Ethiopia

8.4

Tanzania

7.2

Kazakhstan

8.2

Vietnam

7.2

Chad

7.9

Congo

7.0

Mozambique

7.9

Ghana

7.0

Cambodia

7.7

Zambia6.9

Rwanda

7.6

Nigeria

6.8

Source: The Economist, IMF*Excluding counties with less than 10m population and Iraq and Afghanistan

WHY MOZAMBIQUECOMPARATIVEADVANTAGESCOMPETITIVEADVANTAGES Geo-Strategic Location (as agateway to SADC); Second major Investment
Destination in Africa in 2013;

 Rich and Diverse
Resources Base; Stable Investment Legislation(Predictable, Consistent andTransparent); Sincerity,
Friendliness.

NaturalHospitability, Access
topreferential
markets: SADC, USA, EU,China, India.

WELCOMINGINVESTMENT CLIMATE Protection

againstproperty

expropriation;
 Non-discriminatory treatment
between foreign and domesticinvestors;
 No restriction to loans andpayment of interests abroad.APPROVED INVESTMENT(2010-2014)
TotalFDI

NDI

Shareholders Loans
7,465

Total Value: $23bn

4,816

3,280

3,091
2,143

1,863661756
2010

4,598

1,649
1,204238
2011

2,418

2,084

1,578

589

602

2012

2013

2,575
2,583
2,307

2014

MAIN INVESTMENT SECTORS(2010-2014)
Tourism 7.45%
Transport & Communication
15.04%

Agriculture & Agro-industry
14.02%
Fisheries & Aquaculture 2.61%
Banking & Insurance 1.37%
Construction 6.51%

Services 11.70%

Industry 14.12%

Energy 27.18%

TOP 10 INVESTORS 2014
891,057,500.00

547,171,978.93

380,309,127.33
336,454,901.91

56,926,967.33
21,082,500.00

72,872,774.19

EAU

MauritiusSouth Africa

PortugalChina

27,000,000.00
UK

MacauTurkey

585.000
Japan(36th)

JAPANESE COMPANIES IN MOZAMBIQUE

Coal Mining
Revuboe, Tete-

HITACHI Construction
Machinery
Technical ServiceMoatize, Tete-

MOZAL Aluminium
Smelter, Beloluane,
MaputoWoodchips
MaputoA-One
Enterprises
Process ofclams
Matola,MaputoDevelopment of NaturalGas, Rovuma Basin,
Cabo Delgado
Coal mining / railway &development
infrastructure,
Tete & Nampla

ADM
Bio
agriculture
Pemba,
Delgado

fuel,
Cabo

Branch offices & Otherservices:
Ichi Maputo (Used cars),Kaneshiro(Recycle),
Sumitomo, Nippon Koei(Consulting), Mitsui, Mitsubishi,Chiyoda (Engineering), Yahiro(Estate Agency)

Technology
Know-howManagement Skills
Financial Resources
WhyJapan?
MutualCommitment for
Investment
Promotion andProtection• Large Domestic Market: 127 million
inhabitants (Aug, 2014, Statistics Japan)
with purchase power• Japan’s GSP Scheme: Special Preferential
Treatment for LDC – a) Duty Free, b)Quota
Free (Preferential Imports without Ceiling
Restriction)
http://www.mofa.go.jp/policy/economy/gsp/CPI’s Sustained and Developing Cooperation
Partners:
UNIDO: Delegate Programme since 2000
JICA: JICA Advisor at CPI + New Project
underway
JETRO: Training Programme in Preparation

Japan is a Strategic Business
Partner because it is a country withBILATERAL TREATIES & AGREEMENTS
 South Africa

 Indonesia

 Germany Italy Algeria

 Mauritius Belgium Netherlands

 China Portugal

 Cuba Sweden Denmark United Kingdom

 Egypt Vietnam

 USA

 India USA (OPIC) Switzerland Finland Zimbabwe

 France Spain

 Indonesia Japan PortugalAgreements to prevent
Double Taxation andFiscal Evasion

 Mauritius
 United Arab Emirates
 The Autonomous andSpecial Administrative

Investment Promotion
and Reciprocal
Protection Agreements

Region of Macau
 Italy South Africa

TAXATION SYSTEM IMPORT CUSTOMS DUTIES

Equipment
Raw Material
Semi-finished products
Finished products

5.0%
2.5%
7.5%
20.0%

 VAT

17.0%

 IRPC – General IRPC – Agriculture

32.0%
10.0%

 IRPS• Minimum• Maximum

10.0%
32.0%

 Withholding Tax

20.0%

GENERAL INCENTIVES Exemption from payment of customs duties and VAT on the import of equipment classified asclass “K” in the Customs Tariff Schedule including the accompanying spare and accessory
parts.
 Tax Credit Maputo City
 Other Provinces

5%10% Accelerated depreciation legal rates(+50%)

 Professional Training: 5% deducted from the taxable income - IRPCSPECIFIC BENEFITS Creation of Basic Infrastructures
 Trade and Industry in Rural Areas Manufacturing & Assembly Industry
 Agriculture and Fisheries
 Hotels and Tourism
 Science and Technology Parks
 Large Scale Projects
 Rapid Development Zones
 Industrial Free Zones
 Special Economic Zones

REQUIREMENTS OF ELEGIBILITY TO
FOREIGN INVESTMENT
 Minimum value of FDI – the foreign investor’s share capital is set at 100.000 US$ ; or
 Annual Sales volume of 300.000 US$ from the 3rd year of activities; or Annual Exports of Goods and Services equivalent to 50.000.000 US$; or Creation and retention from the 2nd year of operation of at least 25 direct jobs for Mozambican
citizens; and Submission of the investment project to CPI/GAZEDA.

SETTING UP A BUSINESS IN MOZAMBIQUE
Foreign investors that intend to set up a business in Mozambique can choose between formsof enterprises such as commercial companies, or other forms of representation.

LEGAL ENTITY• Approval of name• Company´s head office• Corporate structure• Commercial LicenseCPI• Protection against property
expropriation• Tax and customs benefits• No restriction to loans andpayment of interests abroad

PRIORITY PROJECTSAgriculture;
Gas and Coal Processing;Infrastructure & Power;Industrial Parks;
Manufacturing;Human Resources Development (vocational training).

Soybeans

SOYBEANS

Soy cake is a considerable cost for the poultry industry and could be a key driver of domestic
production substitution of imported chicken. Further opportunity to refine oil byproduct will increase
alongside production.
Growing ImportanceDemand for soybeans is increasing due to the development ofpoultry and soy oil sectors;
Government is actively encouraging growth of domestic soybean
industry to substitute imported soy cake;.
Importation of high-priced soy cake is driving up prices fordomestic poultry,.
– Leading component of domestic poultry cost is feed (~74%).
– Local production of soy cake should reduce costs, improving
competitiveness of the poultry industry.
– Export market opportunities.

Cotton

COTTON

Cotton has been an historically strong sector due to excellent agroecological conditions and potential for export
Traditional Cash Crop

Mozambique’s cotton lint has a long history in accessing importantinternational markets, traditionally in Europe as well as recently inAsia.
The majority of production occurs in the North of the country in
Nampula and Cabo Delgado.
Rising international prices has increased the profitability of cotton
production and potential for levels of productivity.

High Value Added from ProcessingOpportunities for ginning of cotton for export ofhigh quality cotton lint and processing of cotton
seed into oil and cake.
Further opportunities exist in utilising industrial
processes requiring cotton as a raw material (textiles,etc.).

PETROCHEMICAL INDUSTRY■Market : India■Technology from Japan■Pre-FS Completed■Worlds most prevalent Methanol Technology■700M$, 0.5TCF■2.5KT/D■ Strong support from theJapanese andMozambican
Governments

Local Contribution
Mozambican Natural Gas(80 MMSCFD)

Methanol(0.5KT/D)
MJMP(2.5KT/D)

Methanol(2.0KT/D)
ExportDown-Stream in Mozambique

MTG

Gasoline(100,000KL/Y)
Reduction ofDependence on Import

MAJOR OPPORTUNITIES IN LOGISTICS
Shipping Lines

Vessels Operators

Transit & Supply Services

26

Clearing & Forwarding

Airfreight Operators

Heavy Lift Transport

Infrastructure
Development of Dry Ports

Ports

Source: MTC

POWER SECTOR
Comparative Advantages
 Natural Resources Proven Gas reserves
 Proven Coal Reserves
 Proven firm Hydro Renewable
Reserves
 Financing
 Corporate balance Possible to refinance after COD
 Hydro Base No FSA Long Term PPA
 Thermo Base (Coal) Coal as a waste product from mining

GENERATION EXPANSION PLAN 2012 - 2020
Ncondezi(300 MW)

Benga(450 MW)

Palma (ENI)(75 MW)
Lúrio(120 MW)

Cahora Bassa Norte(1245MW)

Alto-Malema(60 MW)

Moatize(300 MW)

Mavuzi 2 & 3(60 MW)
Massingir(25 MW)

Temane(400 MW)

Kuvaninga(40 MW)

2012 - 2014

CTRG
(175 MW)

Gigawatt(100 MW)

ELECTROTEC(100 MW)

Aggreko(222 MW)

CTM(100 MW)

2015 - 20172018 - 2020
> 2020HOW MAY CPI ASSIST YOU?

Facilitation of
National & Foreign
Investment

OFFERS A PACKAGE OF SERVICES TO ASSIST NATIONAL AND FOREIGN INVESTORS FACILITATING ACCESS TO
INCENTIVES OFFERED BY THE GOVERNMENT AND THE ESTABLISHMENT OF THEIR BUSINESSES.

PROMOTIONAL MATERIALSPX: SERVICES OFFERED••Profiling the potential suppliers
competences and capacity;
Match the potential suppliers to
the national and internationallarge buyers.

Profiling andMatchmaking

PROMOTION

•
•
•

•
•

Techniques and management
gaps diagnosis;
Designing of action plans for
improving
thesuppliers
competitiveness.

Benchmarking(assessment &diagnosis)

Suppliers´development(training andassistance)••

Promotion of the goods andservices of the potential suppliersto the large buyers;
Organize meeting joining buyers
and potential suppliers;
The potential suppliers can visit
and attend the national andinternational exhibition..
Improving the potential suppliers
skills and abilities;
Formulation
ofinvestment,financing
andtechnology
partnerships proposals.

ARIGATOU GOZAIMASHITA !

Questionswww.cpi.co.mz+258 (21) 31 33 10

Rua da Imprensa 332 R/CP O Box 4635

info@cpi.co.mz+258 (21) 31 33 25

Maputo, Mozambique