A highlight of the main changes to the Exchange Control Regulation in Mozambique - in force since December 11, 2017

1. Legal Alert
Exchange Control Regulation
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New Exchange Control Rules and Procedures were approved by Notice
20/GBM/2017, issued by the Central Bank of Mozambique, in force since 11
December 2017, following repeal of Exchange Control Regulation by
Decree 49/2017, dated 11 September.
We highlight below the main changes:
1. All funds deriving from proceeds of export of goods and services can
be kept in full in foreign currency, being converted to Meticais
according to the specific payment needs to resident entities.
2. A Deed of Undertaking must be issued whenever an import/export of
goods is started. This deed of undertaking is processed via Single
Electronic Window (Janela Única Electrónica - JUE).
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2. Legal Alert
Exchange Control Regulation
3. All proceeds from services of hotels and tourism rendered by
Mozambican resident entities (even through foreign representatives)
must be received in bank accounts opened with banks operating in
country.
4. Mozambican residents can invest overseas up to the annual limit
equivalent to USD 250,000.00.
5. Foreign direct investment in Mozambique is authorised and must be
registered with the commercial bank.
6. Foreign direct investment must, however, be registered with the
Mozambique Central Bank whenever is (i) made through import of
goods and equipment and (ii) realised through the right of use ofgoods and equipment and (ii) realised through the right of use of
trademarks and patents.
7. Non registration of foreign direct investment following three years
counting from the entrance of respective funds in Mozambique implies
non repatriation of (i) profits or dividends and (ii) amounts invested.
8. Shareholders Loans and Credits from related parties are authorised up
to the limit equivalent to USD 5,000,000.00 provided its conditions
regarding interest rate, timing and commissions are in line with the
Notice in analysis.
9. External foreign loans can be contracted up to amount equivalent to
USD 5,000,000.00 provided the interest rate does not exceed the base
lending rate of the loan currency in 4% and has a maturity of 3 or more
years.
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3. Legal Alert
Exchange Control Regulation
10. Commercial Banks are responsible for all process of application,
decision, registration and disbursement of shareholders loans and
external loans.
11. Guarantees related to current transactions no longer require prior
approval from Central Bank
12. Approves the opening of foreign currency bank accounts by resident
entities that have a proven relation with foreign entities (e.g. exporters,
companies or organisations, employees of multinationals, other entities
that generate or receive foreign currency).
13. Introduces special exchange control regimes for -
o Oil & Gas operations;
o Mining activities;
Stock Exchange transactions.
o Mining activities;
o Stock Exchange transactions.
14. Exchange control operations carried in Industrial Free Zones and
Special Economic Zones, as well as remittances from Mozambican
emigrants will be rules by special regulation.
Contacts
In case you need additional information, please contact:
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Malaika Ribeiro
Managing Partner
Tax Lawyer
malaika.ribeiro@tvcabo.co.mz
+258 82 30 93 240