DOING BUSINESS IN MOZAMBIQUE 2011

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Mozambique's economy grew 6.5% last year, making it one of the best performers in sub-Saharan Africa and growth is expected to continue to accelerate. This presentation is about opportunities and challenges of doing business in Mozambique.

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  • Serving the region and beyond overland and by sea!
  • DOING BUSINESS IN MOZAMBIQUE 2011

    1. 1. Mozambique Uncovered THE ROLE OF CPI AND AN OVERVIEW OF BUSINESS OPPORTUNITIES
    2. 2. <ul><ul><li>Mandate: </li></ul></ul><ul><li>To promote the attraction of national and foreign direct investment; </li></ul><ul><li>To provide institutional assistance to investors; </li></ul><ul><li>To receive and register investment projects; </li></ul><ul><li>To guarantee the concession of fiscal and customs incentives to investors ; </li></ul>CPI- Investment Promotion Centre INVESTMENT PROMOTION, FACILITATION AND AFTERCARE
    3. 3. <ul><ul><li>Mandate: </li></ul></ul><ul><li>T o promote business linkages between national and foreign companies, SME’s and large undertakings; </li></ul><ul><li>To identify potential financial and/or technological partners for joint ventures; </li></ul><ul><li>To identify and disseminate investment opportunities; </li></ul><ul><li>To promote programmes of assistance to the development of businesses, in particular national businesses. </li></ul>CPI - Investment Promotion Centre
    4. 4. <ul><li>Investment Policy (Legal Framework): </li></ul><ul><ul><li>Investment Law; </li></ul></ul><ul><ul><li>Regulation on Investment Law (new); </li></ul></ul><ul><ul><li>Code of Fiscal Benefits (new). </li></ul></ul>
    5. 5. Law on Investments <ul><li>Guarantees: </li></ul><ul><ul><li>Legal protection of property, goods and industrial property rights; </li></ul></ul><ul><ul><li>Unrestricted import and repayment of loans, equity, royalties and compensation proceeds; </li></ul></ul><ul><ul><li>Free repatriation of dividends (100%); </li></ul></ul><ul><ul><li>Equitable compensation in case of expropriation or nationalization; </li></ul></ul><ul><ul><li>Arbitration through ICC or ICSID for dispute resolution; </li></ul></ul>
    6. 6. Regulation on Investment Law ( FDI minimum requirements for eligibility for external remittance of profits and invested capital ) <ul><li>Minimum value of Foreign Direct Investment: US$ 100.000; or </li></ul><ul><li>Generates annual sales not less than US$ 300.000; or </li></ul><ul><li>Registers annual exports of goods or services not less than US$ 50.000; or </li></ul><ul><li>Creates and maintains at least 25 direct employment positions for Mozambicans (From 2 nd year of operations). </li></ul>
    7. 7. Taxation System <ul><li>Customs Duties on Imports </li></ul><ul><ul><li>Equipment 5.0% </li></ul></ul><ul><ul><li>Raw material 2.5% </li></ul></ul><ul><ul><li>Semi-processed goods 7.5% </li></ul></ul><ul><ul><li>Finished goods 20.0% </li></ul></ul><ul><li>VAT 17.0% </li></ul><ul><li>Corporate tax - General 32.0% </li></ul><ul><li>Personal Tax </li></ul><ul><ul><li>Minimum 10.0% </li></ul></ul><ul><ul><li>Maximum 32.0% </li></ul></ul><ul><li>Withholding tax 20.0% </li></ul>
    8. 8. General Incentives <ul><li>Exemption from payment of customs duties and VAT on the import of equipment classified as class “K” in the Customs Tariff Schedule including the accompanying spare and accessory parts </li></ul><ul><li>Tax Credit </li></ul><ul><ul><li>Maputo City 5% </li></ul></ul><ul><ul><li>Other Provinces 10% </li></ul></ul><ul><li>Accelerated depreciation legal rates + 50% </li></ul><ul><li>Professional training deducted from taxable income </li></ul><ul><li>Other incentives </li></ul>
    9. 9. <ul><li>Creation of Basic Infrastructures </li></ul><ul><li>Trade and Industry in Rural Areas </li></ul><ul><li>Manufacturing & Assembly Industry </li></ul><ul><li>Agriculture and Fisheries </li></ul><ul><li>Hotels and Tourism </li></ul><ul><li>Science and Technology Parks </li></ul><ul><li>Large Scale Projects </li></ul><ul><li>Rapid Development Zones </li></ul><ul><li>Industrial Free Zones </li></ul><ul><li>Special Economic Zones </li></ul>Specific Benefits
    10. 10. Bilateral Treaties & Agreements <ul><li>Investment Promotion and Reciprocal Protection Agreements: </li></ul><ul><li>South Africa , Germany, Algeria, Belgium, China, Cuba, Denmark, Egypt, USA, USA (OPIC), Finland, France, Indonesia, Italy, Mauritius, Netherlands, Portugal, Sweden, United Kingdom , Vietnam, India, Switzerland, Zimbabwe and Spain. </li></ul><ul><li>Agreements to prevent Double Taxation and Fiscal Evasion: </li></ul><ul><li>Portugal, Mauritius, United Arab Emirates, the Autonomous and Special Administrative Region of Macau, Italy and South Africa , . </li></ul>
    11. 11. Top 10 Investor First Half, 2011 Rank Country Projects FDI (US$) 1 South Africa 27 64,697,247 2 Portugal 17 33,590,163 3 Mauritius 5 30,322,693 4 United Kingdom 7 28,795,000 5 United Arab Emirates 4 23,292,589 6 China 3 7,250,000 7 Pakistan 1 5,000,000 8 India 4 3,092,500 9 Swaziland 2 1,680,878 10 Brazil 2 1,595,975 TOTAL 199,317,645
    12. 12. Main Investment Opportunities Mining Financial Services Agri-Business Infrastructure Industry & Trade
    13. 13. Agri- Business
    14. 14. Land <ul><li>Land is a State owned asset and may not be sold, mortgaged and pledged </li></ul><ul><li>Maximum length of a concession is 50 years, renewable for further 50 years </li></ul><ul><li>Annual Fee (per hectare): </li></ul><ul><ul><li>Cattle Farming MT 5.00 </li></ul></ul><ul><ul><li>Agriculture M T 37.50 </li></ul></ul><ul><ul><li>Other activities MT500.00 </li></ul></ul><ul><ul><li>(Exchange rate: US$ 1 ~ MZM 28.00 </li></ul></ul>
    15. 15. Huge untapped potential <ul><li>36 million hectares of arable land, only about 1 4 % currently cultivated; </li></ul><ul><li>3.3 million hectares of irrigable land, with approx. 50.000 ha (0,13%) currently irrigated; </li></ul><ul><li>70% of total surface covered by forests of different species (49% having a proved commercial value); </li></ul><ul><li>9 million hectares of national parks and reserves; </li></ul><ul><li>Agro-ecologies suitable for food, feed, fiber and bioenergy production </li></ul>
    16. 16. Agriculture & Agro-processing <ul><li>Food Production </li></ul><ul><li>Maize, rice, barley; </li></ul><ul><li>Soybean, sesame, peanuts, beans, sunflower; </li></ul><ul><li>Sugar; </li></ul><ul><li>Bananas, citrus </li></ul><ul><li>Tea, coffee; </li></ul><ul><li>Production of bio-fuels </li></ul><ul><li>Wood Industry </li></ul><ul><li>Paper </li></ul>
    17. 18. Infra-structure
    18. 19. DEVELOPMENT CORRIDORS Maputo Development Corridor Limpopo Development Corridor Massangena Development Corridor Dondo Development Corridor Beira Development Corridor Mutuali Development Corridor Cuamba Development Corridor Lichinga Development Corridor Nacala Development Corridor Mueda Development Corridor Sena Development Corridor
    19. 20. INFRASTRUCTURES FOR INTEGRATION : DEVELOPMENT CORRIDORS MAPUTO RICHARDS BAY DURBAN BEIRA Quelimane NACALA HARARE JOHANNESBURG PRETORIA GABARONE Livingstone LUSAKA Ndola LUMBAMBASHI Pemba Mocimboa da Praia Mtwara BLANTYRE LILONGWE Tete Mutare Pietersburg Nelspruit MBABANE MASERU Bloemfontein EAST LONDON PORT ELIZABETH Lobatse Inhambane Bulawayo Ports and Airports Maritime, Rail, Roads, Rivers and air transport systems Energy Synergies and sustainability Strategic Investments: Agriculture, Tourism, Mineral resources, etc .
    20. 21. SADC Transport Corridors
    21. 22. <ul><li>Mozambique has a political and social stability that reflects on good governance, quality of institutions, openness and good attitude towards FDI; </li></ul><ul><li>The Country protects against property expropriation, and guarantees non-discriminatory treatment between foreign and domestic investors; </li></ul><ul><li>Stable Investment Legislation (Predictable, Consistent and Transparent); </li></ul><ul><li>100% of investment ownership and control; </li></ul><ul><li>Absence of minimum capital requirements; </li></ul><ul><li>Market based economy. </li></ul>Why Investing in Mozambique?
    22. 23. <ul><li>Sound and Efficient Institutions; </li></ul><ul><li>Good and Stable Macroeconomic Enviroment: </li></ul><ul><ul><li>Fast-Growing Economy: 7.5% Average GDP growth in the last decade ; </li></ul></ul><ul><li>Infrastructure under massive improvement: Transport infrastructure, Ports and “Development Corridors” serving landlocked neighboring states: </li></ul><ul><ul><li>Development and operation of new/rehabilitated port facilities; </li></ul></ul><ul><ul><li>Incremental Power Generation and Transmission investments; </li></ul></ul>Mozambique’s Competitive Advantages
    23. 24. Thank You !

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