Investments Incentives and Benefits
Are you planning on investing in Mozambique? Most of the investments are being made throughout the five Investment Corridors (Maputo, Beira, Nacala, Zambezi Valley and Tazara/Mtwara), in which rehabilitation and improvement of the infrastructure is planned.
Investment Incentives
The minimum amount of an investment is fixed at USD 50 000 for a foreign investment and USD 5 000 for a national investment, in order to get all benefits. New investments and extensions of current investments can get up to 50 % off the taxes for 10 years. When investing in Niassa, Cabo Delgado and Tete provinces the investor can get even 80 % tax reduction for the first year, and 50 % for the following six years.
Investors in the provinces of Zambezi Valley, Manica, Sofala and Niassa can get “SEZ status”, which means no taxes (Corporate Tax, Import Fees and VAT) for five years. Investments of more than USD 500 millions can also get further fiscal incentives.
Investment Guarantees
The Investment Guarantees includes,
* The security and legal protection of property, rights and other assets is guaranteed.
* Unrestricted import and repayment of loan and equity investment capital
* Repatriation of dividends, profits and capital
* Liberalised banking and foreign exchange
* Investment dispute resolution under ICC or ICSID arbitration
* Investment risk insurance under MIGA and OPIC facilities
Investment Protection Conventions and Double Taxation Treaties
Mozambique has signed investment protection conventions with Algeria, Egypt, Indonesia, Italy, Mauritius, Portugal, South Africa, Sweden, US and Zimbabwe. Mozambique has agreed on double taxation treaties with Portugal, Mauritius and Italy.
Investment Opportunities
For more information on Investments in Niassa Province or Mozambique, please contact the Provincial Government or visit the Investment Promotion Centre of Mozambique, which gives more information on the investment opportunities within the areas of agriculture, forestry, tourism, etc.
Industrial Free Zones
Industrial Free Zones (IFZs) enable certain investment projects to benefit from generous tax and customs incentives. The projectr must have a minimum investment of US$5million. The goods produced or processed in an IFZ must be destined for export: only 15 per cent of the goods may be sold on the domestic market. Moreover, the folowing activities are excluded from IFZs:
* the exploration and extraction of natural resources
* the processing of cashew nuts, prawns and fish of national origin; and
* any activity which is reserved by law for the State.
The authorisation for the establishment of an IFZ is subject to the creation of at least 500 permanent jobs for Mozambican nationals and at least 20 jobs in each enterprise established within the IFZ.
Investors can participate in an IFZ in one of two ways:
* as a developer, i.e. in the development and operation of the IFZ infrastructure or estate; or
* as an enterprise, i.e. in the operation of a manufacturing, processing or services enterprise within an IFZ.
1. Customs incentives
IFZ developers are exempt from customs duties, VAT and Specific Consumption Tax on the importation of construction materials, machinery, equipment, accessories, accompanying spare parts and other goods necessary for the establishment and operation of the IFZ.
IFZ enterprises are exempt from customs duties, VAT and Specific Consumption Tax on the importation of goods and merchandise destined for the implemtation of an approved project.
2. Tax incentives
Neither IFZ enterprises nor developers pay Corporate Tax on profits derived from the approved activity. They are also exempt from Real Property Tax and Real Property Transfer Tax ("Sisa") payments.
From the seventh year onwards, developers pay an annual royalty fee in lieu of Corporate Tax. This fee is based on one per cent of invoiced gross quarterly revenue.
Special Economic Zones: the Zambezi River Valley
Special Economic Zones enjoy certain tax reductions and exemptions. The only Special Economic Zone approved to date is the one for the Zambezi River Valley, which covers all the districts in Tete Province, the northern districts of Sofala and Manica Provinces and the central and southern districts of Zambezi Province. Activities eligible for the customs and tax benefits are agriculture, forestry, hydroponics, wildlife management, water supply, electricity generation, transmission and distribution, telecommunications, civil constuction and public works, manufacturing and industry, banking and insurance.
1. Customs incentives
Goods in Classes K, I and M (equipment, intermediary goods and raw materials) are exempt from import duties when destined for new undertakings or the rehabilitation or expansion of existing undertakings.
2. Tax incentives
* Undertakings in agriculture, livestock, forestry and hydroponics are exempt from Corporate Tax until 2025;
* All other undertakings are exempt from Corporate Tax for five years from the start of operations and benefit from an 80 per cent reduction from the sixth year onwards;
* Income generated from undertakings in the Zambezi Valley is exempt from Complementary Tax;
* All undertakings are exempt from Real Property Transfer Tax ("Sisa")
Procedure for obtaining CPI approval
In order to qualify for CPI approval, an investor must provide the following to the CPI:
1. A completed application form. The application form requires investors to give details of the investment value, the proposed sources of funding and technical details, including raw material inputs and sources, the destination of the final goods, the anticipated environmental impact of the project and labour requirements. These forms can be found on the CPI website (www.cpi.co.mz) or at the CPI offices, Rua da Imprensa, No. 332, Maputo:
2. A copy of the passport or identification card of each investor or, if it is a company that will be providing the investment capital, a copy of the company's Articles of Association and Certificate of Registration:
3. A list of the equipment that will be imported into the country in order to realise the project:
4. Bank references and evidence that the investor has the necessary financial capacity to undertake the project. If the investor is a company or group of companies, this will take the form of financial accounts and the most recent annual report for each investing company; and
5. Details of the land concession where the project will be implemented.
If the investor is foreign, the following must be provided to the Banco de Moçambique in order to register the investment:
In cases where the investment will take the form of freely transferable currency:
1. Copy of the investment authorisation from CPI; and
2. Proof of the deposit of the capital from the Commercial Bank.
In cases where the investment will take the form of equipment, machinery and other imported materials:
1. Copy of the Bulletin of Import Registration (BRI);
2. Three copies of a list of equipment exempted from customs duties;
3. Invoices for the equipment; and
4. Certificate of inspection of the embarkation of the equipment.
Please note that the value of the investment shall be taken to be the FOB value of the equipment and other materials unless the transport and insurance have been carried out by Mozambican companies and the payments have been made in foreign currencies.