Mozambique UncoveredTHE ROLE OF CPI AND AN OVERVIEW OF BUSINESS

OPPORTUNITIES

Mandate:

• To promote the attraction of national and foreign direct

investment;

• To provide institutional assistance to investors;

• To receive and register investment projects;

• To guarantee the concession of fiscal and customs incentives

to investors;

CPI- Investment Promotion Centre

INVESTMENT PROMOTION, FACILITATION AND AFTERCARE

Mandate:

• To promote business linkages between national and foreign

companies, SME’s and large undertakings;

• To identify potential financial and/or technological partners

for joint ventures;

• To identify and disseminate investment opportunities;

• To promote programmes of assistance to the development of

businesses, in particular national businesses.

CPI - Investment Promotion Centre

Investment Policy (Legal Framework):

– Investment Law;

–Regulation on Investment Law (new);

–Code of Fiscal Benefits (new).

Law on Investments

• Guarantees:– Legal protection of property, goods and industrial

property rights;– Unrestricted import and repayment of loans, equity,

royalties and compensation proceeds;– Free repatriation of dividends (100%);– Equitable compensation in case of expropriation or

nationalization;– Arbitration through ICC or ICSID for dispute

resolution;

Regulation on Investment Law(FDI minimum requirements for eligibility for external remittance of profits and invested

capital)

• Minimum value of Foreign Direct Investment: US$ 100.000; or

• Generates annual sales not less than US$ 300.000; or

• Registers annual exports of goods or services not less than US$ 50.000; or

• Creates and maintains at least 25 direct employment positions for Mozambicans (From 2nd year of operations).

Taxation System

Customs Duties on Imports– Equipment

5.0%– Raw material 2.5%– Semi-processed goods 7.5%– Finished goods 20.0%

VAT 17.0%

Corporate tax - General 32.0%

Personal Tax– Minimum 10.0%– Maximum 32.0%

Withholding tax 20.0%

General Incentives

Exemption from payment of customs duties and VAT on the import of equipment classified as class “K” in the Customs Tariff Schedule including the accompanying spare and accessory parts

Tax Credit– Maputo City 5%– Other Provinces 10%

Accelerated depreciation legal rates + 50%

Professional training deducted from taxable income

Other incentives

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

Specific Benefits

Bilateral Treaties & Agreements

Investment Promotion and Reciprocal Protection Agreements:

South Africa, Germany, Algeria, Belgium, China, Cuba, Denmark, Egypt, USA,

USA (OPIC), Finland, France, Indonesia, Italy, Mauritius, Netherlands,

Portugal, Sweden, United Kingdom, Vietnam, India, Switzerland,

Zimbabwe and Spain.

Agreements to prevent Double Taxation and Fiscal Evasion:

Portugal, Mauritius, United Arab Emirates, the Autonomous and Special

Administrative Region of Macau, Italy and South Africa, .

Rank Country Projects FDI (US$)

1 South Africa 27 64,697,247

2 Portugal 17 33,590,163

3 Mauritius 5 30,322,693

4 United Kingdom 7 28,795,000

5 United Arab Emirates 4 23,292,589

6 China 3 7,250,000

7 Pakistan 1 5,000,000

8 India 4 3,092,500

9 Swaziland 2 1,680,878

10 Brazil 2 1,595,975

TOTAL 199,317,645

Top 10 Investor First Half, 2011

Main Investment Opportunities

MiningMining

Financial Services

Agri-Business Agri-Business

InfrastructureInfrastructure

IndustryIndustry&&

TradeTrade

Agri- Business

Land

Land is a State owned asset and

may not be sold, mortgaged and

pledged

Maximum length of a concession

is 50 years, renewable for

further 50 years

Annual Fee (per hectare):Cattle Farming MT 5.00

Agriculture MT 37.50Other activities MT500.00(Exchange rate: US$ 1 ~ MZM 28.00

Huge untapped potential

36 million hectares of arable land, only about 14% currently cultivated;

3.3 million hectares of irrigable land, with approx. 50.000 ha (0,13%) currently irrigated;

70% of total surface covered by forests of different species (49% having a proved commercial value);

9 million hectares of national parks and reserves;Agro-ecologies suitable for food, feed, fiber and

bioenergy production

Agriculture & Agro-processing

Food Production

Maize, rice, barley; Soybean, sesame, peanuts, beans, sunflower; Sugar; Bananas, citrus Tea, coffee;

Production of bio-fuels

Wood Industry

Paper

Infra-structureInfra-structure

DEVELOPMENT CORRIDORS

Maputo Development Corridor Limpopo Development Corridor

Massangena Development Corridor Dondo Development Corridor

Beira Development Corridor

Mutuali Development Corridor

Cuamba Development CorridorLichinga Development Corridor

Nacala Development Corridor

Mueda Development Corridor

Sena Development Corridor

MAPUTO

RICHARDS BAY

DURBAN

BEIRA

Quelimane

NACALA

HARARE

JOHANNESBURG

PRETORIA

GABARONE

Livingstone

LUSAKA

Ndola

LUMBAMBASHI

Pemba

Mocimboa da Praia

Mtwara

BLANTYRE

LILONGWE

Tete

Mutare

Pietersburg

Nelspruit

MBABANE

MASERUBloemfontein

EAST LONDON

PORT ELIZABETH

Lobatse

Inhambane

Bulawayo

INFRASTRUCTURES FOR INFRASTRUCTURES FOR INTEGRATIONINTEGRATION::

Ports and AirportsPorts and Airports

Maritime, Rail, Roads, Maritime, Rail, Roads, Rivers and air transport Rivers and air transport systemssystems

Energy Energy

Synergies and sustainabilitySynergies and sustainability

Strategic Investments:Strategic Investments: Agriculture, Tourism, Mineral Agriculture, Tourism, Mineral resources, etcresources, etc. .

DEVELOPMENT CORRIDORS

SADC Transport Corridors

Mozambique has a political and social stability that reflects on good governance, quality of institutions, openness and good attitude towards FDI;

The Country protects against property expropriation, and guarantees non-discriminatory treatment between foreign and domestic investors;

Stable Investment Legislation (Predictable, Consistent and Transparent);

100% of investment ownership and control;

Absence of minimum capital requirements;

Market based economy.

Why Investing in Mozambique?

Sound and Efficient Institutions;

Good and Stable Macroeconomic Enviroment: Fast-Growing Economy: 7.5% Average GDP growth in the last decade ;

Infrastructure under massive improvement: Transport infrastructure, Ports and “Development Corridors” serving landlocked neighboring states:

Development and operation of new/rehabilitated port facilities;

Incremental Power Generation and Transmission investments;

Mozambique’s Competitive Advantages