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) [Link: http://www.cpi.co.mz/].