As a way of providing an incentive to the economic development of the country and to favour activities with a recognised public interest, the Mozambican State has introduced a system of tax and customs incentives. Under these terms, all individuals and companies that make investments under the Investments Law and are duly registered for tax purposes, benefit from tax exemptions or reductions. Such incentives include deductions from taxable income and from the tax due, accelerated amortisation and depreciation, tax credit for investment and exemption from and reduction in tax rates or their deferral. All investments made under the Investments Law enjoy the right to the tax and customs benefits provided for under the Tax Benefit Code ( TBC ), as do those that fall within commercial and industrial activities carried out in rural areas, wholesale and retail trade, new infrastructures built for the purpose and in manufacturing and assembly industries. Furthermore, several Special Economic Zones ( SEZs ) including Industrial Free Zones ( IFZs ), have been created including the Nacala Special Economic Zone, an Industrial Free Zone called Beluluane Industrial Park, located in Maputo province and, more recently, the Locone and Minheuene Free Zones, both located in the district of Nacala, in the Nacala Special Economic Zone. The SEZs and IFZs benefit from certain tax and other incentives, including an exemption from payment of import taxes (including VAT) on construction materials, equipment, accessories, parts and other goods for the continuation of the activity licensed in the SEZs, as well as exemption from VAT on domestic purchases, such as an exemption from corporate income tax (between 5 to 10 years) and a reduction in corporate income tax rates (which varies). There are also non-tax incentives, such as: • Land concessions and environmental impact analysis; • More flexible employment regime, particularly with regard to the hiring of skilled foreign workers and licensing procedures; • Special and extensive immigration regime; • Free foreign exchange regime which also allows free off- shore transactions; • Analysis and approval procedures for investment projects are accelerated and decentralised; and • Administrative and technical assistance available to an investor.
11 Registration of the company and workers with Social Security 12 Statement of commencement of activity
After the commencement of activity After the commencement of activity
Investment Promotion and Incentives On November 1st 2016, the Council of Ministers approved a decree that creates the Investment and Business Agency (“Agência de Investimento e Comércio”) , a public institution under the supervision of the Ministry of Industry and Commerce, resulting from the merger of the Centre for the Promotion of Investments ( CPI ), Office for Accelerated Economic Development Zones ( GAZEDA ) and Institute for the Promotion of Exports ( IPEX ). With the creation of this public institution, the above referred three (3) entities will be extinguished. The agency aims to bring together in a single entity matters relating to the promotion of investments and exports, thereby ensuring greater alignment with the objectives and goals of the government regarding the above-mentioned matters, rationalization of resources and improving the business environment, creating a single focal point for communication with the investors. Tax and customs incentives as well as other benefits, such as the right to import capital, export profits and re-export invested capital, are given to domestic and foreign private investment, whether by individuals or by legal entities. Public investments are financed by funds from the General State Budget, while investments that are exclusively social in character and investments made in the areas of oil, gas and the mineral resources extractive industry have specific requirements. The guarantees and incentives which can be granted to investors by Mozambique include protection by the State of property rights, tax and customs incentives, and repatriation of invested capital and profits generated. Eligibility for incentives requires a minimum equity investment of 2,500,000.00 MT (approximately USD 50,000.00) in the case of foreign investment. In order to avail of these incentives, a foreign investor must file with the CPI an application (the CPI Application ), in the form of an investment project, which will be subject to the approval of the CPI. The application for an Investment Authorization at the CPI requires the establishment of a legal entity in Mozambique (or subsidiary or Representative Office of a foreign entity), which is referred to as the “Project Implementing Company”.
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