REPUBLIC OF MOZAMBIQUE
Agency for Promotion of Investment and Export (APIEX)MOZAMBIQUE & SOUTH AFRICA
BUSINESS SEMINAR
Business & Investment Environment in Mozambique
by: Lourenço Sambo - Director General&Danubio Lado – In charge of Japan Desk
ARK HILLS CLUB-TOKYOJAPAN, 02-FEB- 2018

Presenta)on Layout
1. WHY INVESTING IN MOZAMBIQUE

2. PRIORITY SECTORS

3- LEGAL FRAMEWORK

4-ROLE OF APIEX

2/51

WHY
MOZAMBIQUE ?
Banco Nacional de Investimento • 3

Mozambican Economy: An Overview
MaputoCapital

Portuguese
Official Language

799,390 Km2Total Area

Coast Line
2500 Km

28,871,863
Population

TropicalClimateMeticalCurrency• Mozambique is rich in a wide rangeof mineral resources amongst which
coal, hydrocarbons, precious stones,
heavy sands...
Banco Nacional de Investimento • 4

Mozambique at Glance
Mozambique has an advantageous geographic position, providing an ideal gateway
to both international and regional markets
Excelent Agro-ecological conditions
l Arable Land: ~36 million hectaresl Cultivated land: 5.4 Million Ha (15%)
l Climate: Tropical and Sub-Tropicall Water resources: 13 rivers and 104 basins

Europa /MediterraneanNeighbouring
SADC
countries

Middle East

Asia

*Nacala Port is the Deepest natural port on the East Coastof Africa

Location/Infrastructurel Privileged

access to Regional andinternational markets;l Six development corridors: Pemba-Lichinga,Nacala, Zambezi Valley, Limpopo and Beira,Maputo)l Three main ports (Maputo, Beira, Nacala* )WHY MOZAMBIQUE

COMPARATIVEADVANTAGESCOMPETITIVEADVANTAGESØ Geo-Strategic LocaIon(as a gateway to SADC);Ø Second major Investment
DesInaIon in Africa in 2013;

Ø Rich and Diverse NaturalResources Base;Ø Stable Investment LegislaIon(Predictable, Consistent andTransparent);Ø Sincerity, Hospitability,Friendliness.

Ø Access to preferenIal
markets: SADC, USA, EU,Japan, China, India, etc.

WELCOMINGINVESTMENT CLIMATEØ ProtecIon against property
expropriaIon;
Ø Non-discriminatory treatment
between foreign and domesIc
investors;
Ø No restricIon to loans andpayment of interests abroad.

Establishment of JETRO Maputo

President Nyusi and Prime Minister Abe looked
forward to the establishment of the JETRO oﬃce in
Maputo in the joint statement.

Japan-Mozambique Summit Meeting inTokyo, March 2017 Source: Ministry of Foreign Aﬀairs

Mozambique-Japan Business Forum inTokyo

JETRO Maputo Opening Ceremony, October
20th 20177

Why Mozambique?

-Major investment destination in Africa
Top 15 countries
in Africa in termsof Economic Scale(2016)
Data source：IMF World
Economic Outlook 2017 April

2016
1. Nigeria (World Rank 24th）
2. Egypt （32nd）
3. South Africa（39st）
4. Algeria
5. Morocco
6. Angola
7. Sudan
8. Ethiopia
9. Kenya
10. Tanzania
11. Ghana
12. Tunisia
13. DRC
14. Ivory Coast
15. Libia

Nominal GDP(1 billion USD)
405.95 (18.6%)
332.35 (15.2%)
294.13 (13.5%)
160.78 ( 7.4%)
103.62 ( 4.7%)
95.82 ( 4.4%)
94.42 ( 4.3%)
72.52 ( 3.3%)
68.92 ( 3.2%)
47.18 ( 2.2%)
43.26 ( 2.0%)
41.87 ( 1.9%)
41.62 ( 1.9%)
35.49 ( 1.6%)
33.16 ( 1.5%)

26. Mozambique

FDI into Africa
between 2014 to2016
Left：Flows
Right：Stocks
Data source:UNCTAD

Copyright©2017 JETRO.
All rights reserved.

FDI ﬂows (mil $)11.28

GDP per
capita(USD)
2,210.64
3,684.57
5,260.90
3,944.43
3,063.07
3,502.27
2,384.45
795.23
1,516.33
970.21
1,569.04
3,730.42
494.65
1,458.83
5,193.24

Population(Million)
183.64
90.20
55.91
40.76
33.83
27.36
39.60
91.20
45.45
48.63
27.57
11.22
84.13
24.33
6.39

392.4428.75(0.5%)

2014

2015

2016

1Angola16543.2

16176.4

14363.6

1South Africa

2Egypt4612.06925.28106.82Egypt3Nigeria

3357.03192.33485.3

3Nigeria

4Ghana3357.03192.33485.34Morocco

5Ethiopia

1855.22192.73196.4

5Angola6Mozambique

4901.83866.83093.4

6Mozambique

7Morocco

3561.23254.82321.8

7Ghana8South Africa

5770.6

1729.42270.48Tunisia

9Congo5502.6

1866.02006.09Algeria

10Algeria

1506.7-584.01546.010Congo71254.061494.859373.0

Africa Total

FDI Stocks(mil $)

2014

2015

2016

138905.6 126755.5 126837.2
87485.094307.0 102324.0

86671.2

89735.4

94184.1

51192.049670.554784.2

25899.835181.949545.5

24870.028736.531830.023205.1

26397.4

29882.331563.034689.529304.826819.6

26232.3

27778.3

22009.7
23875.7
25881.7
Africa Total 743227.3 773070.6 836553.0

8

Major business activities by Japanese Companies••

17 Japanese companies are already based in Mozambique (As of October 2017)
4th biggest number in the Sub-Saharan African region after South Africa(128), Kenya(38), Nigeria(22))

Japanese Companies based in Mozambique

PalmaProjects which Japanese companies are involved
Tetev Hitachi Construction Machinery
Mozambique

Pemba

Hitachi Construction 81%, Mitsubishi 19%

Moatize coal mine
Vale 80%, Mitsui15%, EMEM 5%NAMPULA

TETE

Revuboe coal mine
Talbot 58.9%, Nippon Steal and Sumitomo
Metal 33.3%,POSCO 7.8%

ZAMBEZIAACWA Power Moatize Termoelectrica
Mitsui15％、Acwa(Saudi Arabia) 70％、Vale 15%
MANICASOFALABeira

Maputo Province
v A-One Enterprises, Lda
Marine Products(Process clams)
INHAMBANE

Mozal
Aluminum smelting(BHP Billiton 47%, Mitsubishi 25%,
IDC 24%, Mozambique Government
4%)
Maputo Gas Fired Combined Cycle
Power Plant Development
Sumitomo Corporation, IHI funded byJICA

CABO
DELGADONIASSAGAZAMAPUTO

Copyright©2017 JETRO. All rights reserved.

NacalaMomaMaputo CityØ Trading Housev Mitsuiv Mitsubishi
v Sumitomov Marubeni
Ø Engineering andConstructionv Chiyodav Penta Ocean
Ø Consulting/Servicev Nippon Koei
v Oriental Consulting
v Manakyv Yahiro Mozambiquev ICHII Maputo LDA
v Delights MozambiqueØ Renewable Energy
Verde Africa

Cabo Delgado
v Mitsui E&P Mozambique
Area 1 Ltd
Area1※Anadarko 36.5%, Mitsui 20%,
ENH 15%, ONGC Videsh Ltd.
16%, Bhara 10%, , PTTE&P
8.5%, Oil India Ltd. 4%
Area 4JGC (Plant Engineering)v Nippon Biodiesel Fuel(ADM)

NampulaNacala Corridor Project
Vale 35%,Mitsui 35%,CFM30%
Mineral Sand
MitsuiInhambane
Temane Gas Fired Cycle
Power Plant
Sumitomo corporation(EPC)

9Contribution by Japanese companies
to Mozambican economy
Trade Balance(to World)

Export: 3,355 mil USD [2016]

Trade Balance( to Japan)

Export: 78.1 mil $ [2015]→126.4 mil $[2016]

mil $% of Total

887

26.4

Coal

Aluminum Products
Coal719

21.4

Vegetable oil

Electricity

378

11.3

Fish, Crustaceans

Natural Gas

276

8.2

Metals6.1

Precious stones

Tabaco206

Heavy Sand190
Data Source: Banco de Mozambique

Mozal Project(Mitsubishi:25%)

5.7

Source:Mitsubiushi, Mitsui, Sumitomo, JGC HP)% of Total% change

104.7

82.8

+176.0

9.5

7.5

-28.1

3.1

2.4

+46.0

3.1

2.4

-64.9

2.3

1.8

-18.4

Data Source: Ministry of Finance, Japan

Moatize Coal Mine(Mitsui:14.25%)

Infrastructure Project in Nacala(Mitsui:35%)

mil $Gas power Projects in Matola andTemane(EPC:Sumitomo)

Rovuma Basin Area 1 (Mitsui:20%)
Area 4 (Engineering: JGC)

Copyright©2017 JETRO. All rights reserved.

10BILATERAL TREATIES & AGREEMENTS§ South Africa§ Mauritius§ Germany§ Netherlands§ Algeria§ Portugal§ Belgium§ Sweden§ China§ United Kingdom§ Cuba§ Vietnam§ Denmark§ India§ Egypt§ Switzerland§ USA§ Zimbabwe§ USA (OPIC)§ Spain§ Finland§ Japan§ France§ Brasil§ Indonesia§ Singapore§ Italy§ Turkey§ Portugal
Agreements toprevent Double
TaxaIon and Fiscal
Evasion§ Mauritius§ United ArabEmirates§ The Autonomousand Special

Investment
PromoIon andReciprocal
ProtecIon
Agreements

Administrative
Region of Macau§ Italy§ South Africa§ India§ Botswana

PRIORITY SECTORS

Banco Nacional de Investimento • 12PRIORITY SECTORSAGRICULTUREINFRASTRUCTURE

ENERGYMANUFACTURING

TOURISMOIL & GASPRIORITY INDUSTRIES– MAIN PRODUCTS
Chemical, Rubber &PlasIc

Wood Processing &Furniture

Feedstock

Paper & PrinIng

Available Resources

Food Products (Flours,Pasta, Oils, Rice, Meat
Fruits and Vegetables)

Beverages

Agrícultural

School, military, hospital,industrial clothes

Minerals

Footwear

EnergyFurniture (School, hospital,administra)ve), boats

Forestry
MetallurgicalFishery

Food & Agroindustry

Hydro

Clothing, TexIle &Footwear

Strategic goals

FertilizersKey Sectors for the Promo)on of Industrial Development

Public Works, Housing andWater Resources
Education and HumanDevelopment

Agriculture e Food Security
Transport & Communication
Science, Technology, Technicaland Higher Education
14

Electric cables, ingots,automobiles, equipment,
packaging
Sanitary ware anddecora)ve items, ceramics

Non Metallic
Minerals

Trade & Industry

Building Materials(windows, cement, doors,zinc sheets)

Land, Environment & Rural
Development

Paints, detergents,varnishes, plas)c products

Sea, Fishery & Inland Water

Fuels (Methanol, GTL andGPL)

Work, Employment and Social
Security

Packaging, paperboard,school book, receipts

PEDEC - NACALA ESTRATÉGIA DE DESENVOLVIMENTO ECONÓMICO DO CORREDOR DE NACALA

Development Scenarios for Nacala Corridor

Forest Plantation

Chemicaland OtherIndustries

Explorationof NaturalGas

Small and Large
Scale Agriculture

Logistic

Industry of Agroprocessing
Raillway/RoadTransport

Integra)on between Natural Resources
Development and Regional Development•Driving Forces to Transform the Regional Economy and Space (MineralResources Development)
RovumaNatural Gas
Development

Tete CoalDevelopment

16/51

Nacala PortandProcessing
Industries

Programs and Priority Projects
Sectorial approach: 37 experts
Regional approach: 5 Provinces (Nampula, Niassa,
Cabo Delegado, Tete and zambézia (9 Districts)

232 Projects-92 High Priority projects- 48 Essencials projects
Point-1: Establish an acceptable and efficient regional / international
corridor for general cargo(other than coal)
Point-2: Prevent and minimize negative impacts on society /environment and safety
Point-3: Utilize the improved transportation corridor to promote
regional development of the economy and society

3 Programs for specific areas
11 Programs by Sectors

Programs and Priority Projects

LEGAL FRAMEWORK
By Danubio Lado

• Banco Nacional de Investimento • 19TAXATION SYSTEMIMPORTCUSTOMS
DUTIES
Equipment
5.0%

VAT

IRPC(Residents &non Residents)

17.0%

Raw Material
2.5%

Minimum
10.0%

Maximum
32.0%

Semi-ﬁnishedproducts
7.5%
Finishedproducts
20.0%

32.0%

IRPS

Social Security:
v 4% (employer)
v 3% (employee)

WITHHOLDINGTAX(Dividends)
20.0%

INVESTMENT GUARANTEESq Legal protecIon of all property rights, including intellectual andindustrial property;
q Equitable compensaIon in case of expropriaIon;q Free remihance of funds abroad:– Exportable proﬁts;– Royal)es and other similar payments;– Amor)za)on of loans and payment of interest on loans– The proceeds of any compensa)on paid in conformity with the protec)on ofproperty rights; and– Invested and re-exportable foreign capital.

TAX INCENTIVES
GENERAL BENEFITSqIn Respect of Import of Goods:
qExemp)on from customs du)es and VAT on
the import of capital equipment, spare andaccessory parts.
qIn Respect of Income Tax:
qInvestment Tax Credit;
qAccelerated Deprecia)on ;qTax Deduc)ons (Professional Training; Use ofnew Technology)

TAX INCENTIVESSPECIFIC BENEFITS
q CreaIon of Basic Infrastructures;q Trade and Industry in Rural Areas;q Manufacturing & Assembly Industry;q Agriculture and Fisheries;
q Hotels and Tourism
q Science and Technology Parks
q Large Scale Projects
q Rapid Development Zones
q Industrial Free Zones
q Special Economic Zones
q Mining AcIviIes
q Oil & Gas operaIonsINCOME TAX (IRPC) – SEZ
Special Economic
Zone Developer

Special Economic
Zone Enterprise

IRPC exempIon in theﬁrst 5 tax years

IRPC exempIon inthe ﬁrst 3 tax year

50% reducIon in therate of IRPC from the6th to the 10th taxyear

50% reducIon in therate of IRPC fromthe 4th to the 10thtax year

25% reducIon in therate of IRPC for theremaining life of theproject

25% ReducIon from11th to 15th taxyear

Special Economic
Zone Service
Enterprise
50% reducIon in
the rate of IRPC tax
for a period of 5 taxyear

24

INCOME TAX (IRPC) - IFZ

Industrial Free
Zone Developer

Isolated Ind.
Free Zone
Enterprises

IRPC exempIon in theﬁrst 10 tax year

IRPC exempIon in
the ﬁrst 5 tax years

50% reducIon in therate of IRPC tax fromthe 11th to the 15 thetax year

50% reducIon in therate of IRPC tax fromthe 6th to the 10thtax year

25% reducIon in therate of IRPC for theremaining life of theproject

25% reducIon in therate of IRPC for theremaining life of theproject25

Fiscal Benefits for SEZ and IFZ
Special Regime (Customs DuIes & Income Tax)

Customs Duty
and VAT Tax
ExempIon

Income Tax

ExempIon from payment of customs duIes and VAT on theimport of construcIon materials, machinery, equipment,
accompanying spare and accessory parts and other goods usedin carrying out of the licensed SEZ’s and IFZ’s acIviIes (theexempIon includes also raw material)

ExempIon and reducIon in the rate of the Corporate Income Tax(IRPC)

26

FISCAL BENEFITS FOR SEZ(IRPC-Corporate Income Tax)

Special Economic
Zone Developers

Special Economic
Zone Enterprises

IRPC exempIon in theﬁrst 5 tax years

IRPC exempIon inthe ﬁrst 3 tax years

50% reducIon in therate of IRPC from the
6th to the 10th taxyear

50% reducIon in therate of IRPC fromthe 4th to the 10thtax year

25% reducIon in therate of IRPC for theremaining life of theproject

25% reducIon in therate of IRPC fromthe 11th to the 15thtax year

Special Economic
Zone ServiceEnterprises
50% reducIon in
the rate of IRPC fora period of 5 taxyears

27

FISCAL BENEFITS FOR IFZ(IRPC-Corporate Income Tax)

Industrial Free
Zone Developers& Enterprises

Isolated Free
Zone Enterprises

IRPC exempIon in
the ﬁrst 10 tax years

IRPC exempIon in
the ﬁrst 5 tax years

50% reducIon in therate of IRPC tax fromthe 11th to the 15thtax year

50% reducIon in
the rate of IRPC tax
from the 6th to the10th tax year

25% reducIon in therate of IRPC for theremaining life of theproject

25% reducIon inthe rate of IRPC forthe remaining life ofthe project28

ROLE OF APIEX
By Danubio Lado

• Banco Nacional de Investimento • 29

APIEX´s PILLARSFACILITATIONDEVELOPMENTPROMOTIONADVISORY30

HOW MAY APIEX ASSIST YOU?

Facilitation ofNational&Foreign
Investment

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

FOR A GREATER &BETTER MOZAMBIQUETO EVERYONETomas Matola • Banco Nacional de Investimento • 32

THANK YOU!
OBRIGADO!
ARIGATOU GOZAIMASU !
www.apiex.co.mz
Iwww.apiex.gov.mz+258 (21) 31 33 10+258 (21) 31 33 25

Rua da Imprensa 332 R/CP O Box 4635
Maputo, Mozambique