Doing business in Mozambique

How quickly can I set up a business?

30 – 40 days

What is the minimum investment needed?

Investment depends on the scale of project, but a company can start a zero-share capital since there is no minimum share capital.

How can I raise finance?

Investor must contribute the entire capital.

What are the legal requirements for setting up my business?

Setting up in Mozambique proper – Limited Liability Company (LDA) with minimum two equity participation. It can be 100% foreign and no requirement for local participation. For a public Limited Company (SA), there is a required minimum of three shareholders.

What structure should I consider?

Setting up in mainland is the preferred option for local trading and retail activities.

Setting up in the free trade zone is preferred for companies who are entitled to operate under free trade zones such as mining, textile and many others.

Establishment (a branch of your overseas business):

• Not a separate legal entity but an extension of the overseas parent company.
• No limited liability or ring-fencing of the (country) operations.
• Must file branch office accounts, prepared under Mozambique company law at the tax authority.
• Must file periodical VAT returns.

Limited Liability Company:

• Members (partners) have limited liability.
• Profits are allocated to members.
• Must adhere to the commercial law on commercial companies.
• Must file periodical VAT return.

Public Limited Liability Company:

• Members (partners) have limited liability.
• Profits are allocated to members.
• Must adhere to the commercial law on commercial companies.
• Must file periodical VAT return.

What advice can you give me in regards to payroll and taxation requirements?

There are dedicated Industrial Zones/Parks for manufacturing activities.

• Most of the free zones are meant for industrial, trading and service activities
• There is corporate taxation in Mozambique at the rate of 32%, VAT at 16% and withholding tax at 20%. Withholding tax is paid on dividend, interest, management fees and any services rendered from abroad.
• There are personal taxes in Mozambique, which vary from 0 to 35% on gross salary, social security tax is mandatory 3% paid by employee and 4% paid by employer. Foreign employees who can prove that they are contributing to social security in their home country are not subject to social security in Mozambique.

Is there anything else that I should know?

Mozambique’s official language is Portuguese and all formalities are done in Portuguese. All documents from investors are obliged to be translated by an official translator before submission to any relevant authorities in Mozambique.

The chart of accounts should be produced in Portuguese and according to the Mozambican law.

If investors would like to register their business with CPI – Centre for Promotion of Investment, they can do so where they can benefit from tax reduction, exemption on custom duties and VAT on registered equipment with CPI. They can also benefit from the accelerated depreciation rate for tax deduction.