Doing Business in Mozambique - Revision history

Lisafeldmann at 08:23, 3 November 2022

2022-11-03T08:23:45Z

Ranisha: /* Taxation */

2022-09-02T15:25:18Z

Taxation

Lisafeldmann at 07:10, 6 July 2022

2022-07-06T07:10:10Z

Fernanda Wynter at 14:31, 7 March 2022

2022-03-07T14:31:57Z

Fernanda Wynter: Text replacement - "Webinar Series: Statuesque and Market Potential of Off-grid Renewables in Mozambique" to "Webinar Series: Status Quo and Market Potential of Off-grid Renewables in Mozambique"

2022-03-03T13:26:53Z

Text replacement - "Webinar Series: Statuesque and Market Potential of Off-grid Renewables in Mozambique" to "Webinar Series: Status Quo and Market Potential of Off-grid Renewables in Mozambique"

Lisafeldmann at 13:03, 7 February 2022

2022-02-07T13:03:19Z

Lisafeldmann at 13:02, 7 February 2022

2022-02-07T13:02:34Z

Lisafeldmann at 13:02, 7 February 2022

2022-02-07T13:02:08Z

Lisafeldmann at 13:01, 7 February 2022

2022-02-07T13:01:19Z

Lisafeldmann at 13:00, 7 February 2022

2022-02-07T13:00:36Z

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 According to World Bank data from 2019, Mozambique is positioned at 138 in a global ease of doing business ranking, but compared to other sub-Saharan countries, it is overall ranked 20th out of 48. Looking at starting a business only, the country ranks 42 out of 48 countries in the region<ref>[https://www.doingbusiness.org/en/rankings?region=sub-saharan-africa The World Bank: Ease of Doing Business Rankings].  </ref>.
 == Setting up a Business ==
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 Setting up a company includes fees that vary depending on the type of business and the amount of its share capital. Fixed costs include MZN 400 for the name certificate and the notarised signed incorporation contract. Additionally, a registration fee of MZN 1,450 is applied, plus: amounts of the company's capital up to MZN 5 million are taxable at a 0.4% rate, and amounts exceeding MZN 5 million are taxable at a 0.03% rate<ref name=":0" />.
 === Labour Relations ===
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 Every year, the government and the representative of the private sector employers and unions at the Employment Consultative Committee (Comissão  Consultiva do Trabalho) negotiate the minimum wage for nine different sectors, one of it being the production and distribution of electricity, gas and water. In May 2021, the minimum wage in this sector in big companies was MZN 8,300.00 per month (equivalent to 113 Euros in May 2021); in small businesses the minimum wage to be paid was MZN 6,760.00 (equivalent to 92 Euros in May 2021)<ref>[https://alrei.org/research/data-bases/minimum-wages/mocambique Africa Labour Research and Education Institute]; retrieved 26 May, 2021</ref>.
 === Work Permits ===
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 A short-term work permit, which does not fall under the work permit quota system, can be obtained for a period of up to 90 days.  It aims at the execution of punctual, unpredictable work that requires high scientific knowledge or specialised professional technicians. For this type of work permit the payment of a fee is required.
 === Foreign-exchange Transactions ===
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 For more details on foreign exchange legislation, see: https://www.mlgts.pt/xms/files/site_2018/publicacoes/2020/Doing_Business_MZ_EN.pdf
 === Taxation ===
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 |92,8746
 |}
 === Cross-border Trade ===
 In 2020, Mozambique, scored 73.8 with regard to trading across borders in World Bank‘s ease of doing business score on a scale from 0 (lowest performance) to 100 (top performance). However, scores for export related issues such as costs and time for border compliances are much lower than for time and costs for import, where Mozambique’s score is above 90 (but for cost of border compliance)<ref name=":0" />.
 === Import Duties for Energy Products ===
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 These import duties and VAT are considered a key barrier for the development of a renewable energy market, as prices for end-users are relatively high. Compared to other African countries that provide tax incentives for renewable energy technologies, Mozambique is not an attractive market to invest and engage in<ref name=":4" /><ref name=":5">[https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf Economic Consulting Associates / Green Light (2018): Off-Grid Solar Market Assessment in Mozambique. Final report.] </ref>.
 === Import Procedure ===
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 There, you will also find a calculation of time needed to complete border compliance and associated costs.
 === Quality Standards in Mozambique ===
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 For international standards for energy technologies, see this article (upcoming).
 == Further Information ==
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 * US International Trade Administration (2021): Mozambique - Country Commercial Guide – Market Challenges <nowiki>https://www.trade.gov/country-commercial-guides/mozambique-market-challenges</nowiki>
 == References ==

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 === Taxation ===
 The Value added tax (VAT) in Mozambique amounts to 17%. This applies also for solar panels or other energy equipment<ref>[https://cdn.odi.org/media/documents/10251.pdf ODI et al (2016). Accelerating Access to Electricity in Africa with Off-grid Solar.] </ref>.
@@ Line 101: / Line 103: @@
 Mozambique has tax treaties with countries such as Botswana, Ethiopia, India, Italy, Macau, Mauritius, Portugal, South Africa, United Arab Emirates, and Vietnam<ref name=":1" />.
 For example, a SHS which costs USD 50 while importing from the supplier can cost more than USD 90 for the end consumers with all the different taxes<ref>This calculation is based on the calculation presented by Jose Eduardo Catruza during the [[Webinar Series: Status Quo and Market Potential of Off-grid Renewables in Mozambique|Webinar on State of Play: Solar Home System (SHS) Market in Mozambique.]]</ref>.

← Older revision		Revision as of 07:10, 6 July 2022
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	== References ==		== References ==
	<references />		<references />
		+	[[Category:Financing and Funding]]
		+	[[Category:Mozambique]]

← Older revision		Revision as of 14:31, 7 March 2022
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	{{Back to Mozambique Portal}}		{{Back to Mozambique Portal}}
		+	{{Portuguese Version\|Fazendo_Negócios_em_Moçambique}}
		+
	== Introduction ==		== Introduction ==

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-For example, a SHS which costs USD 50 while importing from the supplier can cost more than USD 90 for the end consumers with all the different taxes<ref>This calculation is based on the calculation presented by Jose Eduardo Catruza during the [[Webinar Series: Statuesque and Market Potential of Off-grid Renewables in Mozambique|Webinar on State of Play: Solar Home System (SHS) Market in Mozambique.]]</ref>.
+For example, a SHS which costs USD 50 while importing from the supplier can cost more than USD 90 for the end consumers with all the different taxes<ref>This calculation is based on the calculation presented by Jose Eduardo Catruza during the [[Webinar Series: Status Quo and Market Potential of Off-grid Renewables in Mozambique|Webinar on State of Play: Solar Home System (SHS) Market in Mozambique.]]</ref>.
 {| class="wikitable"
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 == Introduction ==
+Mozambique takes a middle position when it comes to doing business, compared to other countries worldwide.
 In 2020, it scored 55 in World Bank‘s ease of doing business score on a scale from 0 (lowest performance) to 100 (top performance)<ref>[https://www.doingbusiness.org/en/data/doing-business-score The World Bank: Ease of Doing Business Scores]. </ref>.
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 A short-term work permit, which does not fall under the work permit quota system, can be obtained for a period of up to 90 days.  It aims at the execution of punctual, unpredictable work that requires high scientific knowledge or specialised professional technicians. For this type of work permit the payment of a fee is required.
-=== Foreign-exchange transactions ===
+=== Foreign-exchange Transactions ===
 The importation and exportation of MZNs is prohibited.
@@ Line 197: / Line 197: @@
 For international standards for energy technologies, see this article (upcoming).
-== '''Further Information''' ==
+== Further Information ==
 * Agency for Promotion of Investment and Exports / Agência Para a Promoção de Investimento e Exportações (APIEX) http://www.apiex.gov.mz/

@@ Line 155: / Line 155: @@
 * cooperating with regional and international organisations working in the fields of standardisation and quality.
-With regard to solar energy, there are a couple of standards that can be found in the Catalogue of Mozambican Standards from 2017 (Catálogo de Normas moçambicanas)<ref name=":6">[[Www.innoq.gov.mz/por/content/download/753/5265/version/4/file/catalogo+de+Normas.pdf|Catálogo de Normas moçambicanas]]; retrieved from the Internet on 18  May, 2021</ref>:
+With regard to solar energy, there are a couple of standards that can be found in the Catalogue of Mozambican Standards from 2017 (Catálogo de Normas moçambicanas)<ref name=":6">[http://www.innoq.gov.mz/por/content/download/753/5265/version/4/file/catalogo+de+Normas.pdf Catálogo de Normas moçambicanas]; retrieved from the Internet on 18  May, 2021</ref>:
 * NM 311: 2011 Ed. 1 16p. Sistemas fotovoltaicos – Especificação

@@ Line 10: / Line 10: @@
 === Business registration ===
-Setting up a business in Mozambique takes about 15-17 days and consists of the following steps<ref name=":0">The World Bank: Doing Business 2020 - Mozambique. [https://www.doingbusiness.org/en/data/exploreeconomies/mozambique#]</ref><ref name=":1">Morais Leião Legal Circle (2020): Guide To Doing Business in Mozambique <nowiki>https://www.mlgts.pt/xms/files/site_2018/publicacoes/2020/Doing_Business_MZ_EN.pdf</nowiki></ref>:
+Setting up a business in Mozambique takes about 15-17 days and consists of the following steps<ref name=":0">[https://www.doingbusiness.org/en/data/exploreeconomies/mozambique# he World Bank: Doing Business 2020 - Mozambique]. </ref><ref name=":1">[https://www.mlgts.pt/xms/files/site_2018/publicacoes/2020/Doing_Business_MZ_EN.pdf Morais Leião Legal Circle (2020): Guide To Doing Business in Mozambique] </ref>:
 ''1.    '''''Reserve a name for the company and obtain a certificate''' at the ''One-Stop Shop (Balcão de Atendimento Único - BAÚ) and Legal Entities Registrar (Conservatória de Registo das Entidades Legais)''
@@ Line 49: / Line 49: @@
 The Labour Act ([http://www.drh.uem.mz/images/Lei__23_2007_de_1_de_Agosto_-_Lei_do_Trabalho_1.pdf Lei do Trabalho/LT 23/2007]) concerns legal labour relations between employers and employees in the country, domestic and foreign, of every branch of activity.
-Whereas permanent contracts are the rule, fixed-term contracts are allowed only for specific temporary situations. They can be concluded for a period not exceeding two years and may be renewed twice. Exemptions are made for small and medium enterprises with up to 100 employees, which are allowed to contract employees on a fixed-term basis for the first 10 years of their existence, without limitation regarding duration or renewals<ref>Morais Leião Legal Circle (2020): Guide To Doing Business in Mozambique <nowiki>https://www.mlgts.pt/xms/files/site_2018/publicacoes/2020/Doing_Business_MZ_EN.pdf</nowiki></ref>.
+Whereas permanent contracts are the rule, fixed-term contracts are allowed only for specific temporary situations. They can be concluded for a period not exceeding two years and may be renewed twice. Exemptions are made for small and medium enterprises with up to 100 employees, which are allowed to contract employees on a fixed-term basis for the first 10 years of their existence, without limitation regarding duration or renewals<ref>[https://www.mlgts.pt/xms/files/site_2018/publicacoes/2020/Doing_Business_MZ_EN.pdf Morais Leião Legal Circle (2020): Guide To Doing Business in Mozambique] </ref>.
-According to the Labour Law, normal hours of work are 8 hours a day and shall not exceed 48 hours a week<ref>Africa Labour Research and Education Institute <nowiki>https://alrei.org/research/data-bases/minimum-wages/mocambique</nowiki> retrieved 26 May, 2021</ref>.
+According to the Labour Law, normal hours of work are 8 hours a day and shall not exceed 48 hours a week<ref>[https://alrei.org/research/data-bases/minimum-wages/mocambique Africa Labour Research and Education Institute]  retrieved 26 May, 2021</ref>.
-For each month worked, employees receive one paid day off in the first year and 2 days in the second year. From the third year they are entitled to 30 paid days off<ref>Globalpedia: Mozambique. <nowiki>https://www.globalization-partners.com/globalpedia/mozambique-employer-of-record/#Mozambique-Holidays</nowiki></ref>.
+For each month worked, employees receive one paid day off in the first year and 2 days in the second year. From the third year they are entitled to 30 paid days off<ref>[https://www.globalization-partners.com/globalpedia/mozambique-employer-of-record/#Mozambique-Holidays Globalpedia: Mozambique]. </ref>.
-Every year, the government and the representative of the private sector employers and unions at the Employment Consultative Committee (Comissão  Consultiva do Trabalho) negotiate the minimum wage for nine different sectors, one of it being the production and distribution of electricity, gas and water. In May 2021, the minimum wage in this sector in big companies was MZN 8,300.00 per month (equivalent to 113 Euros in May 2021); in small businesses the minimum wage to be paid was MZN 6,760.00 (equivalent to 92 Euros in May 2021)<ref>Africa Labour Research and Education Institute <nowiki>https://alrei.org/research/data-bases/minimum-wages/mocambique</nowiki> retrieved 26 May, 2021</ref>.
+Every year, the government and the representative of the private sector employers and unions at the Employment Consultative Committee (Comissão  Consultiva do Trabalho) negotiate the minimum wage for nine different sectors, one of it being the production and distribution of electricity, gas and water. In May 2021, the minimum wage in this sector in big companies was MZN 8,300.00 per month (equivalent to 113 Euros in May 2021); in small businesses the minimum wage to be paid was MZN 6,760.00 (equivalent to 92 Euros in May 2021)<ref>[https://alrei.org/research/data-bases/minimum-wages/mocambique Africa Labour Research and Education Institute]; retrieved 26 May, 2021</ref>.
 === Work Permits ===
@@ Line 92: / Line 92: @@
 === Taxation ===
-The Value added tax (VAT) in Mozambique amounts to 17%. This applies also for solar panels or other energy equipment<ref>ODI et al (2016). Accelerating Access to Electricity in Africa with Off-grid Solar. <nowiki>https://cdn.odi.org/media/documents/10251.pdf</nowiki></ref>.
+The Value added tax (VAT) in Mozambique amounts to 17%. This applies also for solar panels or other energy equipment<ref>[https://cdn.odi.org/media/documents/10251.pdf ODI et al (2016). Accelerating Access to Electricity in Africa with Off-grid Solar.] </ref>.
 Company taxes in Mozambique include corporate income taxes, municipal taxes, social contribution taxes, and others<ref name=":0" />.
@@ Line 138: / Line 138: @@
 Customs duties on imported goods range from 0 to 25%. The value-added tax of 17% is also assessed at the time of importation<ref>https://www.trade.gov/country-commercial-guides/mozambique-import-tariffs</ref>. Imports from Southern African Development Community (SADC) and EU are tax exempted.
-An import duty of 7.5% per kg<ref name=":3">Pauta Aduaneira, Capitulo 85 <nowiki>http://www.at.gov.mz/eng/Media/Pauta-Aduaneira/Capitulo-85</nowiki> retrieved from the Internet on 18 May, 2021</ref> is charged on photovoltaic cells whether or not assembled in modules or made up into panels, and regardless of their application. For example, even though agricultural equipment is exempt from import duties, for solar panels used for water pumping, the import duty has to be paid<ref name=":4">The Global Green Growth Institute (2019): Country Brief: Mozambique. Off-grid solar power in Mozambique: opportunities for universal energy access and barriers to private sector participation <nowiki>https://www.greengrowthknowledge.org/sites/default/files/downloads/resource/20190218_-Country-Brief_Mozambique.pdf</nowiki></ref>.
+An import duty of 7.5% per kg<ref name=":3">[http://www.at.gov.mz/eng/Media/Pauta-Aduaneira/Capitulo-85 Pauta Aduaneira, Capitulo 85]; retrieved from the Internet on 18 May, 2021</ref> is charged on photovoltaic cells whether or not assembled in modules or made up into panels, and regardless of their application. For example, even though agricultural equipment is exempt from import duties, for solar panels used for water pumping, the import duty has to be paid<ref name=":4">[https://www.greengrowthknowledge.org/sites/default/files/downloads/resource/20190218_-Country-Brief_Mozambique.pdf The Global Green Growth Institute (2019): Country Brief: Mozambique. Off-grid solar power in Mozambique: opportunities for universal energy access and barriers to private sector participation] </ref>.
-Hydro turbines are subject to a 5% import duty per piece, the same holds true for ovens and cookers burning gas or liquid fuels<ref>Pauta Aduaneira, Capitulo 84 <nowiki>http://www.at.gov.mz/eng/Media/Pauta-Aduaneira/Capitulo-84</nowiki> retrieved from the Internet on 18 May, 2021</ref>. An import duty of 20% per piece is charged on portable electric lamps designed to operate by their own source of energy. Similarly, parts of electrical systems are subject to 5% (converters) or 7.5% (transformers, batteries and accumulators) import duty per piece<ref name=":3" />.
+Hydro turbines are subject to a 5% import duty per piece, the same holds true for ovens and cookers burning gas or liquid fuels<ref>[http://www.at.gov.mz/eng/Media/Pauta-Aduaneira/Capitulo-84 Pauta Aduaneira, Capitulo 84]; retrieved from the Internet on 18 May, 2021</ref>. An import duty of 20% per piece is charged on portable electric lamps designed to operate by their own source of energy. Similarly, parts of electrical systems are subject to 5% (converters) or 7.5% (transformers, batteries and accumulators) import duty per piece<ref name=":3" />.
-These import duties and VAT are considered a key barrier for the development of a renewable energy market, as prices for end-users are relatively high. Compared to other African countries that provide tax incentives for renewable energy technologies, Mozambique is not an attractive market to invest and engage in<ref name=":4" /><ref name=":5">Economic Consulting Associates / Green Light (2018): Off-Grid Solar Market Assessment in Mozambique. Final report. <nowiki>https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf</nowiki></ref>.
+These import duties and VAT are considered a key barrier for the development of a renewable energy market, as prices for end-users are relatively high. Compared to other African countries that provide tax incentives for renewable energy technologies, Mozambique is not an attractive market to invest and engage in<ref name=":4" /><ref name=":5">[https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf Economic Consulting Associates / Green Light (2018): Off-Grid Solar Market Assessment in Mozambique. Final report.] </ref>.
 === Import Procedure ===
@@ Line 155: / Line 155: @@
 * cooperating with regional and international organisations working in the fields of standardisation and quality.
-With regard to solar energy, there are a couple of standards that can be found in the Catalogue of Mozambican Standards from 2017 (Catálogo de Normas moçambicanas)<ref name=":6">Catálogo de Normas moçambicanas  www.innoq.gov.mz/por/content/download/753/5265/version/4/file/catalogo+de+Normas.pdf retrieved from the Internet on 18  May, 2021</ref>:
+With regard to solar energy, there are a couple of standards that can be found in the Catalogue of Mozambican Standards from 2017 (Catálogo de Normas moçambicanas)<ref name=":6">[[Www.innoq.gov.mz/por/content/download/753/5265/version/4/file/catalogo+de+Normas.pdf|Catálogo de Normas moçambicanas]]; retrieved from the Internet on 18  May, 2021</ref>:
 * NM 311: 2011 Ed. 1 16p. Sistemas fotovoltaicos – Especificação
@@ Line 176: / Line 176: @@
 * PrNM915  - Módulos fotovoltaicos–Especificações técnicas (Photovoltaic modules-Technical specifications
-This standard from 2018 establishes the minimum technical requirements to be met for the manufacture, marketing and use of solar panels in the Republic of Mozambique<ref>Norma Moçambicana PrNM915 2018: Módulos fotovoltaicos–Especificações técnicas. Retrieved from the Internet on 18 May, 2021 www.innoq.gov.mz/por/content/download/762/5352/version/1/file/MO%CC%81DULOS+FOTOVOLTA%CC%81ICOS++-+Especificac%CC%A7o%CC%83es.pdf </ref>.
+This standard from 2018 establishes the minimum technical requirements to be met for the manufacture, marketing and use of solar panels in the Republic of Mozambique<ref>[http://www.innoq.gov.mz/por/content/download/762/5352/version/1/file/MO%CC%81DULOS+FOTOVOLTA%CC%81ICOS++-+Especificac%CC%A7o%CC%83es.pdf Norma Moçambicana PrNM915 2018: Módulos fotovoltaicos–Especificações técnicas.] Retrieved from the Internet on 18 May, 2021  </ref>.
 The standard has to be followed by: