Benefits of the Investment Law in Mozambique

Mozambique just like the other countries is a country that is undergoing several changes, especially in the commercial area. In order to face these transformations, the Mozambican State makes available in its normative framework the Investments Law and through its Regulation, measures that aim to simplify the implementation of the implementation of the standards it provides for.
Law 3/93 of June 24, 1993, approves the Investment Law in Mozambique, which applies under the terms of Article 3 of the same law, to investments of an economic nature carried out on Mozambican territory and which intend to benefit from the guarantees and incentives therein, as well as for investments carried out in industrial free zones and special economic zones, with the exception of:

• Area of prospecting, research and production of oil, gas and mineral resources extraction industry;
• Financed by funds from the state budget;
• Of an exclusively social nature.

The areas of investment reserved for the public sector, with or without private sector participation, are the following:

• Electric power production for public consumption;
• Public water supply for domestic and industrial purposes in urban centers;
• Operation of postal services and public telecommunications services;
• Development and operation of national, marine or land-based parks, and other areas protected by law;
• Production, distribution and sale of arms and munitions

Forms of direct national investment

It may take any of the following forms, singly or cumulatively, provided that they are capable of monetary evaluation:

1. Cash;
2. Infrastructures, equipment and their accessories, materials and other goods;
3. Assignment of exploitation rights on concessions, licenses and other rights of an economic, commercial or technological nature;
4. Assignment, in specific cases and on terms agreed and sanctioned by the competent authorities, of rights to use land, patented technologies and trademarks, the remuneration for which is limited to participation in the distribution of the profits of the undertaking, resulting from the activities in which such technologies or trademarks have been or are applied.

Forms of foreign direct investment

It may take any of the following forms, singly or cumulatively, provided that they are capable of monetary evaluation:

1. 1. Freely convertible foreign currency;
   2. Equipment and its accessories, materials and other imported goods;
   3. Assignment, in specific cases and on terms agreed and sanctioned by the competent authorities, of the rights to use patented technologies and trademarks and whose remuneration is limited to participation in the distribution of the profits of the company resulting from the activities in which such technologies or trademarks have been or are applied.

Forms of indirect investment

Article 10 of the law under review states that indirect investment, whether domestic or foreign, includes both separately or cumulatively:

1. 1. • Loans, shareholder loans, supplementary capital payments;
      • Tecnologia patenteada, processos técnicos, segredos e modelos industriais franchising;
      • Patented technology, technical processes, secrets and industrial franchising models;
      • Trademarks, technical assistance and other forms of access to use or transfer of technology;
      • Trademarks whose access to its use is on an exclusive or restricted licensing basis by geographical areas or domains of industrial and/or commercial activity.

REQUIREMENTS TO QUALIFY FOR GUARANTEES AND INCENTIVES PROVIDED FOR IN THE INVESTMENT LAW

In order for a foreign investor, whether an individual or a legal entity, to benefit from the guarantees and incentives provided for in the Investment Law, it is necessary that - the minimum amount of foreign investment, resulting from the contribution of equity capital, which includes shareholder loans or additional capital, as well as the reinvestment of exportable profits, is at least MZM 2.500.000,00 (approximately 56.685,75 euros or 78. 123,98); - if the investment is made through the import of equipment, machinery and other tangible goods, the investment values will be the cost, insurance and charter prices of these goods; - or that the activity meets one of the following requirements: a) from the third year of activity it generates an annual sales volume of not less than 7.500.000,00 MZM (approximately 170057,25 euros, or 234.371,95 USD); b) annual exports of goods or services reach a minimum value of 1.500.000,00 MZM (approximately 34.011,45 euros or 46.874,39 USD); c) create and maintain direct employment for at least 25 national workers, registered in the social security system from the second year of activity.