REPUBLIC OF MOZAMBIQUEInvestment & Export Promotion Agency (APIEX)

MOZAMBIQUE: BUSINESS ENVIRONMENT

Afica Investment ForumSandton, November 2018

MOZAMBIQUE AT A GLANCE

Location: East Coast of Africa

Total Area: 799,380Km2

Coastline: 2,700km (Indian Ocean)

Population: 29 Million

Capital: Maputo

Languages: Portuguese (Official); African Languages; English widely spoken

Religion: Catholic (28%); Muslim (18%), Other beliefs

MOZAMBIQUE AT A GLANCE

Macro-economic Indicators (2017):

• GDP: US$ 13.4 Billion

• GDP Per capita: USD 465

• GDP Growth Rate: 3,7%

• Inflation (2017): 5,7%

• Exports (2016): 4.7 Billion

• Imports (2016): 9.1 Billion

Mozambique has an advantageous strategic geographic position, providing an idealgateway to both regional and international markets

Europa /

Mediterranean

Asia

Middle East

Neighbouring SADC

countries

Privileged access to High Opportunity Markets (Regional & International)

WHY MOZAMBIQUE?

GEOPOLITICAL ADVANTAGE• Boardering Tanzania, Malawi, Zambia,

Zimbabwe, South Africa and Eswatine

• I mport/export hub for landlocked countries:

Malawi, Zambia, Zimbabwe, Botswana and

Swaziland.

• 3 International and 8 domestic airports.

• 3 Main seaports.

• Nacala is the deepest natural seaport in west

coast of Africa, with a railway system reaching

Zimbabwe through Malawi and serves as as

the gateway to the “copper belt” of Africa’s

resourceful region.

• Member of SADC or Southern African

Development Community, 14 members

include: Angola, Botswana, Democratic

Republic of the Congo, Lesotho, Malawi,

Mauritius, Mozambique, Namibia, Seychelles,

South Africa, Swaziland, Tanzania, Zambia and

Zimbabwe.

• SADC total population: 270 million

WHY MOZAMBIQUE (CONT.)

Rich and Diverse Natural Resources Base

Young and educated work force

Access to preferential markets: SADC, USA, EU, China, India

Openness to Investment (welcoming, predictable and transparent investment climate)

WHY MOZAMBIQUE (CONT.)

Provision of tax & non-tax incentives

Protection against property expropriation

Non-discriminatory treatment between foreign and domestic investors

No restriction to loans and payment of interests abroad

Sincerity, Hospitability, Friendliness

TOTAL INVESTMENT INFLOW IN MOZAMBIQUE (2014-2018)

8

Agriculture and Agro-industry

7% Aquaculture and Fisheries

5%

Construction and Public Works

6%

Energy…

Industry20%

Services19%

Transportation and Communications

8%

Tourism and Hospitality

9%

MOZ Total Investment flow (2014-2018)

• Energy has the

largest % of

investment inflow

(2014-2018) : 26%

• It is followed by

Industry (20%) and

Services (19%)

• Agriculture and

Agro-industry

received merely 7% of

the total investment

inflows during the

period

Source：APIEX 2019

LEGAL FRAMEWORK

INVESTMENT

LAW

(Regulations &

Code of Fiscal

Benefits)

TAXATION SYSTEM

IMPORT CUSTOMS

DUTIES

Equipment 5.0%

Raw Material 2.5%

Semi-finished products

7.5%

Finished products

20.0%

VAT

17.0%

IRPC

(Residents & non Residents)

32.0%

IRPS

Minimum 10.0%

Maximum 32.0%

WITHHOLDING TAX

(Dividends)

20.0%

Social Security: 4% (employer) 3% (employee)

TAX INCENTIVESGENERAL BENEFITS

In Respect of Import of Goods:

Exemption from customs duties and VAT on theimport of capital equipment, spare andaccessory parts.

In Respect of Income Tax:

Investment Tax Credit;Accelerated Depreciation ;Tax Deductions (Professional Training; Use of

new Technology)

TAX INCENTIVESSPECIFIC BENEFITS

Creation of Basic Infrastructures;

Trade and Industry in Rural Areas;

Manufacturing & Assembly Industry;

Agriculture and Fisheries;

Hotels and Tourism

Science and Technology Parks

Large Scale Projects

Rapid Development Zones

Industrial Free Zones

Special Economic Zones

Mining Activities

Oil & Gas operations

SPECIAL ECONOMIC ZONES & INDUSTRIAL FREE ZONES

SPECIAL ECONOMIC ZONES (SEZ)– Involves investment in

all sectors

– For both export and local markets

– Business must be located in the zone

INDUSTRIAL FREE ZONES (IFZ)– Manufacturing for

exports;

– Should export at least 70% of the products;

– Can be single factory unit (Stand alone).

o ZFI Revúboe

GEOGRAPHIC LOCALIZATION OF SEZ (ZEE) & IFZ

(ZFI) IN MOZAMBIQUE

Special EconomicZone Developers

IRPC exemption in thefirst 5 tax years

50% reduction in therate of IRPC from the

6th to the 10th taxyear

25% reduction in therate of IRPC for the

remaining life of theproject

Special EconomicZone Enterprises

IRPC exemption inthe first 3 tax years

50% reduction in therate of IRPC from

the 4th to the 10th tax year

25% reduction in therate of IRPC from

the 11th to the 15th tax year

Special EconomicZone ServiceEnterprises

50% reduction inthe rate of IRPC for

a period of 5 taxyears

14

FISCAL BENEFITS FOR SEZ

(IRPC-Corporate Income Tax)

Industrial FreeZone Developers

& Enterprises

IRPC exemption in thefirst 10 tax years

50% reduction in therate of IRPC tax fromthe 11th to the 15th

tax year

25% reduction in therate of IRPC for the

remaining life of theproject

Isolated FreeZone Enterprises

IRPC exemption inthe first 5 tax years

50% reduction inthe rate of IRPC taxfrom the 6th to the

10th tax year

25% reduction inthe rate of IRPC for

the remaining life ofthe project

15

FISCAL BENEFITS FOR IFZ(IRPC-Corporate Income Tax)

PRIORITARY SECTORS

AGRICULTURE TOURISM ENERGY MANUFACTURINGINFRASTRUCTURE OIL & GAS

ROLE OF APIEX

• Banco Nacional de Investimento • 17

ROLE OF APIEX

NATURE

• Public institution

• Endowed with

administrative and

financial autonomy

MANDATE

• Promotion and

facilitation of

investment and

exports

SUBORDINATION • Minister of Industry

and Trade

APIEX

APIEX´s PILLARS

FACILITATION DEVELOPMENT PROMOTION ADVISORY

19

HOW MAY APIEX ASSIST YOU?

OFFERS A PACKAGE OF SERVICES TO ASSIST NATIONAL AND FOREIGN

INVESTORS FACILITATING ACCESS TO INCENTIVES OFFERED BY THE

GOVERNMENT AND THE ESTABLISHMENT OF THEIR BUSINESSES.

Facilitation of

National

&Foreign

Investment

www.apiex.co.mz

Iwww.apiex.gov.mz +258 (21) 31 33 25

Rua da Imprensa 332 R/C

P O Box 4635

Maputo, Mozambique

+258 (21) 31 33 10

THANK YOU!OBRIGADO!