Doing business in Mozambique: Mozambique trade and export guide
Published 3 March 2015
© Crown copyright 2015
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This publication is available at https://www.gov.uk/government/publications/exporting-to-mozambique/doing-business-in-mozambique-mozambique-trade-and-export-guide
Brexit
Learn about changes for UK exporters to Mozambique if the UK leaves the EU without a deal.
Managing risk
Find out how UK companies can control risks when doing business in Mozambique.
Export opportunities and advice
Find more export advice and explore opportunities overseas on great.gov.uk.
1. Mozambique export overview
Mozambique is a member of the Southern Africa Development Community (SADC) and has a population of approximately 24 million.
Contact a Department for International Trade (DIT) Mozambique export adviser for a free consultation if you are interested in exporting to Mozambique.
Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Mozambique.
Several UK companies operate in Mozambique including Barclays, AON, Deloitte, PwC, ERM, Diageo, Associated British Foods, Gemfields, Baobab, and Aggreko.
Strengths of the Mozambique market include:
- high Gross Domestic Product (GDP) growth rate, low inflation and a relatively stable currency
- vast mineral and hydrocarbon deposits attracting large amounts of Foreign Direct Investment (FDI)
- geographically well positioned to export to Asian markets
- UK-Mozambique High-Level Prosperity Partnership
2. Challenges doing business in Mozambique
The most significant challenges UK businesses face in Mozambique are:
- bureaucracy, pervasive influence of the political elites and widespread corruption
- poor infrastructure, resulting in higher logistical costs
- skills and education shortage coupled with tightening work permit regime
- Portuguese as the official language
- legal system is based on Portuguese civil law
You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.
3. Growth Potential
FDI and government spending in major infrastructure projects are the main causes of growth. According to the World Bank, in 2013 Mozambique was the second biggest recipient of FDI in Africa with almost USD 6.7 billion. The most dynamic economic sectors are:
- extractives
- financial services
- construction
- transport and communication
4. UK and Mozambique trade
UK bilateral trade with Mozambique is growing rapidly. Bilateral trade in visible goods increased by 14% in 2013 to over £150 million.
UK export of goods to Mozambique was worth £45 million. UK FDI in Mozambique at the end of 2013 totalled USD 1.2 billion.
5. Opportunities for UK businesses in Mozambique
Department for International Trade (DIT) publish over 1,000 export opportunities per month across all sectors and over 100 markets. Search for export opportunities.
Identify opportunities to supply products and services to the international aid agencies. Contact the Department for International Trade (DIT) Aid Funded Business Service for more information.
5.1 Oil and gas
There are many opportunities for UK companies in the oil and gas sector in Mozambique, including:
- subsea Engineering, Procurement, Installation and Commissioning (EPIC)
- Original Equipment Manufacturers (OEM) of drilling and subsea systems
- Offshore Support
- manpower services
Contact the Department for International Trade (DIT) team in Mozambique for more information on the oil and gas sector.
5.2 Mining and infrastructure
There are opportunities for UK companies that specialize in:
- engineering
- procurement
- construction
Contact the Department for International Trade (DIT) team in Mozambique for more information on the mining and infrastructure sector.
5.3 Education and training
There are opportunities for Technical and Vocational Education and Training (TVET) and higher education institutions to provide specialized training services. Training is in particularly high demand for the oil and gas sector.
Contact the Department for International Trade (DIT) team in Mozambique for more information on the education and training sector.
5.4 Power generation and transmission
There are opportunities for UK companies to provide diesel, coal and gas fired generation equipment and services.
Mozambique recently approved ‘feed in tariffs’ designed to promote the uptake of a range of small-scale renewable and low-carbon electricity generation technologies. These could open up further opportunities for wind, solar, mini-hydro and biomass power generation.
Contact the Department for International Trade (DIT) team in Mozambique for more information on the power sector.
5.5 Start-up considerations
Incorporating a local subsidiary in Mozambique is a relatively easy and straight forward process.
There is generally no legal obligation to have a local partner so it is possible to incorporate a fully-owned foreign subsidiary.
The majority of commercial enterprises are incorporated as:
- limited liability
- joint stock companies
- a registered branch of a foreign legal entity (this requires permission from the appropriate sector ministry)
Both locally registered entities and branches of foreign registered entities must obtain a business license or a simplified business license. These can be issued from the appropriate sector ministry. Businesses must also register with the revenue authorities before they start trading.
Contact the Department for International Trade (DIT) team in Mozambique for help with the various ministries and authorities.
6. Legal considerations
Contact the Department for International Trade (DIT) team in Mozambique to help find tax and legal advisers before entering into agreements.
6.1 Labour law
Mozambique labour law is relatively rigid and generally focused on protecting the employees’ rights versus the rights of the employers.
Hiring foreign personnel is only permitted as a small percentage of the total workforce, varying from 5 to 10% depending on the size of the company. Additional expats may be employed for short term assignments or with permission from the Ministry of Labour. Exemptions can also apply for government approved investment projects.
We advise new investors to include in your business plan a clear intention to reduce numbers of foreign staff over time.
6.2 Land regulations
The land in Mozambique is the property of the state and cannot be sold. Private use of the land is allowed for 50 years and renewable for a further 50 years. Securing a new ‘land concession’ for investment is a lengthy and complicated process.
6.3 Foreign currency regulations
Opening a bank account in a foreign currency and the transfer of funds from overseas is subject to the prior approval of the central bank (Banco de Moçambique). There are many restrictions enforced by the central bank for the use foreign currency accounts.
6.4 Intellectual Property (IP)
Trademarks, designs, patents and copyright are the principal forms of IP protection available to companies and individuals.
7. Tax and customs considerations
7.1 Tax
The following taxes apply in Mozambique:
- standard corporate income tax (32%) – applies to all corporate legal entities, including branches of foreign corporate entities
- Value Added Tax (17%) – applicable to both transactions within Mozambique and for imports
- withholding tax (20%) – applicable on dividends, interests and royalties paid to foreign shareholders
7.2 Double Taxation Agreements (DTA)
Mozambique has signed DTAs with several countries, including South Africa, Mauritius, UAE and Portugal, which allow for reduced withholding tax rates. There is no DTA in place between the UK and Mozambique.
7.3 Customs
Custom duties vary from 2.5% for raw materials to 20% for finished goods.
You can find more about import tariffs in the Market Access Database.
7.4 Documentation
Documentation for clearance of imported goods is managed through the Single Electronic Window. Regulated goods are subject to pre-shipment inspection in the country of export before they allowed into Mozambique. Intertek is the appointed sole provider for this service.
8. Entry requirements
You will need a visa to enter Mozambique. Those travelling for work or business purposes must obtain a work or business visa before travelling. You can apply for a visa at the High Commission of the Republic of Mozambique.
8.1 Travel advice
If you’re travelling to Mozambique for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.
9. Contacts
Contact the Department for International Trade (DIT) team in Mozambique for more information and advice on opportunities for doing business in Mozambique.