Legalities

How does it all work?

Buying property in a foreign country can be daunting when it comes to the legalities. We all understand what the legalities entail when buying a property in the country we live in, but how does it work in Mozambique?

This is where GoMozam can take you by the hand and guide you in the right direction.

With first hand experience in buying vacant land within a development and building houses in Moz, GoMozam has the know how and step-by-step guidance as to what legal requirements are to be fulfilled, as and when they are needed. Below is a basic structure of how buying property in Mozambique works.

The easiest way to buy property in Mozambique is within a company.

Company types

1. Company Limited by shares (SPA) - shares must be registered at the Mozambican Stock Market; It takes longer and requires more procedures to register the company. The shareholders are not revealed and it is mandatory to have a BOD and Audit Committee.
2. Limited Liability Company (SRL) - This is the most used. it is faster to register the company. No issuance of shares. The shareholders are public and hold quotas/percentage of the share capital.
3. Branch - the slowest procedure of all. All documents must be issued and approved by the holding company. Requires approvals from the Ministry to establish the branch. It is only allowed to have one representative.

Steps & time frames

• Registration of the company – 3 days;
• Publication of the Articles of Association – 30 days
• Tax Registration - 7 days;
• Licensing of the company (note: all licenses have specific requirements as peractivity) – 10 to 22 days;
• Declaration of commencement of activities – 2 to 5 days;

• Social Security Registration – 3 days;
• Notification of starting of activities at the Ministry of Labor - 1 day;
• Obtain Workers' Nominal List – 15 to 30 days;
• Approval of working hours – 7 days;
• Obtain mandatory Insurance – 7 days;
• Registration of the company at Central Bank – 15 days

• Opening of bank account – 10 days;
• Registration of brand (if required) – 15 to 30 days;
• Registration of the Minutes Books – 15 days;
• Payment of TAE (Municipal activity tax) – 3 days;
• Obtain Fire Extinguishers for the office – 7 days;

Government costs

• Registration – USD 150
• Publication – USD 560
• License – USD 300
• Labor Registration – USD 200
• Opening of bank account – USD 150
• Other Registration – USD 300

General taxes

• IRPS – The income paid or placed at the disposal of the company's employees and other individuals by the company is subject to taxation through withholding the tax at source at the rates foreseen in a Ministerial Decree which is normally reviewed on an annual basis (from 0% to 32%).
• IRPC – General tax rate of 32% on the profits from the company's activity starting January 1st and ending on December 31st.
• VAT – Monthly payment of the Value Added Tax referring to the previous month by the tax payers. Tax rate of 17%.

Exchange control rules

• All foreigner investments must be registered at Central Bank;
• All Loans must have prior approval issued by Central Bank in order to be transferred to Mozambique;
• Payment of Services to non-resident entities is done through the Commercial Banks;

Investment incentives

• General Incentives are granted to all projects which apply for the Mozambican incentives as per the Code of Fiscal Benefits. The investment should be above the equivalent to MZM 2,500,000 for a foreign project and must not be of a pure trading nature;
• Exemption from payment of Customs Duties due on the importation of capital goods (Class K of Customs Manual);
• Investors benefit, for a period of 5 tax years, from a tax credit for investment (CFI) of 5% for investments in the Province of Maputo and 10% for investments in the remaining Provinces

Hiring of a foreigner

• Work Permit within the quota – 10%/8%/5% of the Mozambican employees can be hired as foreigners;
• Work Permit out of the quota – the employer must explain the reasons of hiring such foreigner and the foreigner must have skills that are not available in Mozambique;
• Short Term Work Permit – 30 days' permit renewed twice = 90 days (normal regime); 180 days (special regime to the Oil and Gas sector)