Banking, Finance and Exchange Control Specific transactions, banking or non-banking, carried out within Mozambique or between resident and non-resident entities are governed by the Exchange Control Law and respective regulations. The Exchange Control regulations specifically govern foreign exchange operations between non-resident individuals, corporate entities or residents involving rights or transactions over goods or values located in the country, activities carried out in the territory and activities carried out by residents abroad. Prior to performing any foreign exchange operation, the project implementing company and its foreign shareholders or investors are required to be registered at the Bank of Mozambique ( BoM ), which will issue a reference number for each party (such reference number is to be used on all foreign exchange operations). Although not all foreign exchange operations are subject to (prior) approval / authorisation, all such operations are subject to registration, meaning that, each time a foreign exchange operation is concluded, registration thereof is required to be made at the BoM. Tax The Mozambican tax system features both national and local government taxes as outlined below.
this reason, cannot be sold, mortgaged or charged. Besides occupation, the only vehicles the law provides for access to land are the right to use and benefit from land - Direito de Uso and Aproveitamento da Terra ( DUAT ) or Special Licenses. The DUAT is granted outside areas in the public domain to domestic and foreign individuals and legal entities, taking into account the social or economic objective of the land use. The law defines foreign companies as any company or other institution incorporated under Mozambican or foreign legislation in which more than 50% of the share capital is held by foreign citizens, companies or institutions. Foreign individuals or companies may hold DUAT rights as long as they have a duly approved investment and comply with the following conditions: if they are individuals, they must have been resident in Mozambique for at least five years; if they are companies, as long as they were incorporated or are registered in Mozambique. The establishment, modification, transfer or extinction of DUAT rights are subject to registration at the local and national land registries. Definitive authorisation is granted for a period of 50 years renewable for equal periods once the provisional authorisation period has been observed or the plan for operation of the land or the application of any interested party has been complied with. Land Law establishes that, upon submission of a request for use and benefit of the land, a provisional authorization is issued for a period of 5 years for Mozambican entities and of 2 years to foreign entities. The right of use and benefit of land may be transferred by inheritance and the infrastructures, structures and improvements existing on said land may be transferred by means of a public notarial deed, preceded by authorization from the competent state entity. A Transfer Tax ( SISA ) is charged on transfer for consideration of real estate, options to purchase and long- term leases and subleases. The rate is 2% for residents and non-resident individuals or legal entities (10% for non- residents of a country with significantly more favourable taxation, according to the Mozambican legislation). Stamp duty, corresponding to 0.2% of the value of the transaction, it is also payable by the buyer in a transfer for value or gift of a property right or figures similar to rights over property. Additionally, local municipal taxes may apply, depending on the location of the property and its intended use.
Tax
Rate
Corporate Income Tax
Depending on the type of entity, 16%-32% Charged progressively between 10% and 32%
Personal Income Tax
Withholding Tax (entities that do not have registered office or effective management and non-resident income earners in Mozambique)
20%
Value Added Tax
17% (60% of this deducted for public works projects)
Inheritance and Gift Tax (transfers of movable and real property which are made free of charge) Property Transfer Tax (transfers against payment, of property or similar rights over real property)
Varies between 2% - 6%
Usually 2%, but if the purchaser is resident in a country with a more favourable tax regime than Mozambique it will be 10%
Africa Investment Guide | 51
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