Investment Outlook The discovery of natural resource reserves, such as natural gas and coal, combined with ongoing reforms of the business climate in Mozambique, provide good opportunities for the transformation of the country into a middle income economy. GDP annual growth rate in Mozambique has slowed to 4.5% in 2016-17. It is expected that during the 2020s, the gradual increase in production of liquefied natural gas will significantly increase GDP growth rates. According to the International Monetary Fund, Mozambique’s economy may expand by 24 percent from 2021 to 2025 annually once natural gas production begins. However, despite the above predictions, Mozambique’s economy is currently in difficulty mostly due to the discovery of an undeclared sovereign debt. Moreover, (i) the ongoing conflict between the Governing Frelimo party and the opposition Renamo party (ii) the regaining international trust and (iii) the stabilization of the national economy will be the themes that mark Mozambique politics and economic life in months and years to come. Although the political situation remains unstable, this did not constrain Exxon Mobil Corp. from buying a 25% stake in the LNG area 4 project which represents an investment of USD 2.8 billion. Growth Industries • Oil & Gas; • Hydro-electric energy; • Coal; and • Infrastructures (roads and ports). Forms of Corporate Structure • Limited Liability Companies: there are two types of commercial private companies most commonly used for business purpose: • “Sociedade Anónima” ( SA ): with registered capital represented by certificated shares, which may be compared to public limited liability companies or joint stock corporations; and • “Sociedade por Quotas” ( LDA ): with registered capital represented by un-certificated quotas, closer to private limited liability companies.
• Branches (Representative Offices) of foreign entities: A Representative Office is understood as the exercise of an economic activity within the Republic of Mozambique through a branch, commissionership, agency, business office or any other form of representation of a foreign domiciled entity, and is subject to licensing by the Ministry of Industry and Commerce. Branches or Representative Offices are not acknowledged as legal entities, but rather as extensions of the parent company. • Consortiums/Joint ventures partnerships, Unincorporated Joint Ventures: Consortium contract is governed by the Commercial Code, being defined as a contract by which two or more individuals or companies that exercise an economic activity, engage to carry out, jointly and temporarily, a certain activity or to make a certain contribution for the pursue of an undertaking. Under Mozambican law the concepts of joint venture and partnerships are not formally established, both exist as atypical agreements. Incorporation Procedure 1
Item
Time
1 Certificate of the Name of the Legal Entities Registered Office Approval 2 Certificate of the Name of the Legal Entities Registered Office Approval
1 day
USD 2
1 day
Dependant on share capital
3 Commercial Registration
2 days
USD 28
4 Publication in Official Gazette
30 days
USD 30
5 Tax Registration
5 working days
6 Opening the shareholders general meeting resolution minute book and the board of Directors resolution minutes book (only for companies S.A)
5 working days USD 60
7 Issuance of the shares certificates (only for companies S.A).
5 days
8 Commercial Licensing
3 days for the General Business trading Licence
USD 32 - USD 63
9 Declaration of
5 days
commencement of activity
10 Registration of the company and workers for purposes of labour effects
After the commencement of activity
Both SA and LDA companies are limited liability companies and are acknowledged as legal entities.
1 Cost and timeframe are based on typical experiences for the incorporation of limited liability companies. These will vary depending on the specifics of each incorporation and may not be relevant for highly regulated sectors.
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