Decree no. 8/2024 of March 7 was recently approved, regulating the Investment Law (Law no. 8/2023 of June 9) and establishing the procedures applicable to the approval and implementation of private investments in Mozambique and eligible for tax and non-fiscal guarantees and incentives. Below is a summary of the main aspects to consider:
Foreign Direct Investment
The minimum amount of Foreign Direct Investment (“FDI”), for the purposes of transferring profits and exporting the invested capital abroad, is 6,500,000.00MT (approximately USD 100,743.95).
FDI must be duly registered under the terms of foreign exchange legislation and the export of profits and invested capital requires proof of registration. FDI made by capital transfer can only be registered if it is made through the national banking system. FDI in the form of equipment or materials must be registered at CIF value, according to documents issued by the customs authorities.
It is possible to convert debt contracted abroad into FDI, provided that the requirements of foreign exchange legislation are met.
Investment Proposals – Mere Registration Regime
Applicable to investment projects up to the value of 32,000,000,000.00MT (approximately USD 495,970,241.24). The decision on requests for mere registration is taken by the following entities:
(i) Provincial Governor: for projects up to 3,500,000,000.00MT (approximately USD 54,246,745.19);
(ii) Director General of APIEX: for projects up to 6,500,000,000.00MT (approximately USD 100,743,955.36);
(iii) Minister of Economy and Finance: for projects up to 32,000,000,000.00MT (approximately USD 495,970,241.78). The investment certificate is proof of the project’s registration and must be presented for the purposes of enjoying tax benefits and other investment guarantees.
Authorization Regime
Applicable to investment projects worth more than 32,000,000,000.00MT (approximately USD 495,970,241.78). It requires the presentation of a technical, economic and financial feasibility study in a specific model, which demonstrates the sustainability of the project and the respective investment and financing plans. The Investment Authorization is approved by Resolution of the Council of Ministers or Order of the Minister of Economy and Finance, under the following terms:
(i) Minister for the Economy and Finance: for projects involving the industrial processing of mining and/or oil products, and projects with foreseeable economic, social, safety and/or public health implications;
(ii) Council of Ministers: for (i) projects with a value of more than 32,000,000,000.00MT (approximately USD 495,970,241.78), (ii) public-private partnership ventures and business concessions, (iii) projects requiring an extension of land of an area equal to or greater than 10,000 ha, and (iv) projects requiring a forestry concession of an area greater than 100,000 ha.
Revocation of the Investment Certificate and Authorization
Revocation may occur in the following cases:
(i) At the reasoned request of the investors;
(ii) The deadline set for the start of project implementation has expired, without there having been a start or prior communication to the investors about the reason for the delay;
(iii) Paralysis of the implementation or operation of the project for a continuous period of more than 3 months, without prior communication from the investor; and
(iv) Verification of non-compliance with the Investment Law and Regulations, other applicable legal provisions, as well as the conditions set out in the respective investment certificate or authorization.
Transfer of Investor Position
The transfer of shareholdings held by investors in investment projects is free, as long as it takes place in national territory and is duly notified to the entity that issued the investment certificate or authorization. The formalization of the new investor’s registration depends on the above notification and the presentation of proof of compliance with the tax obligations inherent in the transaction.
The investors and promoters of the project must submit information every six months on the progress of the project’s activities, by filling in the appropriate form.
Responsibility of Investors under the Authorization Regime
(i) Develop resettlement programs for the population affected by the project;
(ii) Create or develop infrastructures in the areas of education, health, transport, communication routes, electricity, water and sanitation, preferably in the geographical area where the project will be implemented;
(iii) Collaborate with local educational institutions;
(iv) Hire local labor, goods and services; and
(v) Contribute to the business development of Mozambican SMEs.
In order to ensure that the above responsibilities are met in a harmonized manner, investors should liaise in advance with local entities and sectoral bodies.
