Mozambique

General Information Entry and Exit Requirements
Banking Intellectual Property
Business Etiquette Tips Legal and Registration of a Business Entity
Embassy Locations and Registration Safety and Crime
Employment-Legal Requirements Taxes

General Information

MozambiqueMozambique is a developing country in southern Africa that has steadily rebuilt its economy and civic institutions since ending a 16-year civil war in 1992.  The country stabilized following Mozambique's first multiparty elections in October 1994, and a new president was elected in December 2004. Despite high economic growth rates in recent years, Mozambique remains among the world's poorest countries. Facilities for tourism in Maputo, the capital city, are steadily improving but remain limited in other areas as many of the goods and services taken for granted in other countries are not yet available. The official language is Portuguese, though English is spoken in many tourist areas, and in some rural areas only local languages are widely spoken.

There may be political unrest and/or targeted crime against visitors to the country.  Travelers should check with the U.S. State Department Web site for current travel safety information.

Major Cities Capital:  Maputo
Major cities: Beira, Matola, Nampula, Quelimane, Tete, Nacala
Official Currency metical (MZM)
Time Zone UTC+2 (7 hours ahead of Washington, D.C. during Standard Time)
Language Portuguese (official language, spoken by 27 percent of population as a second language), Emakhuwa, Xichangana, Elomwe, Cisena, Echuwabo, and other Mozambican languages

 

Legal System and Government

Type of Legal System

The Mozambican legal system is based on the Portuguese civil law system and customary law. It has not accepted compulsory International Court of Justice (ICJ) jurisdiction.

Form of Government

Republic

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Banking

Available Banking Services

ATMs
Online banking
Banking in English

Bank Holidays

New Year's Day  
Heroes Day 
Women's Day
Independence Day
Victory Day
Armed Forces Day 
Bank Holiday 
Maputo's Day (Maputo only) 
Christmas Day

U.S. and Other Major Banks in Country

The banks below represent the commercial banks within Mozambique that have a correspondent U.S. banking relationship and are familiar in handling the needs of expatriates.

(Note: Addresses and contact information subject to change.)

Banco Austral ABSA
Avenida 25 de Setembro, 1184
Caixa Postal 757, Maputo
Phone: (258) (21) 32-10-11
Fax: (258) (21) 32-34-70

Banco Comercial e de Investimentos (BCI)-Fomento
Avenida 25 de Setembro, 1230 (4th Floor)
Caixa Postal 75, Maputo
Phone: (258) (21) 30-77-77
Fax: (258) (21) 30-71-52

Standard Bank
Praça 25 De Junho
Caixa Postal 1119
Maputo, Mozambique
Phone: (258) (21) 32-45-97
Fax: (258) (21) 30-81-04

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Business Etiquette Tips

Business Attire

Lightweight suits are advised.

Business Negotiations

Knowledge of Portuguese is advantageous for business dealings, though there are translation facilities available in Maputo. January is the main holiday month, so this should be avoided for business trips.

Scheduling Appointments

Prior appointments are recommended.

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Embassy Locations and Registration

(Note: Addresses and contact information subject to change.)

Embassy of Mozambique in the U.S.
1525 New Hampshire Avenue NW
Washington, D.C. 20036
Phone: (202) 293-7146
Fax: (202) 835 0245
Web: http://www.embamoc-usa.org

U.S. Embassy in Mozambique
193 Avenida Kenneth Kaunda
Phone: (258-21) 49-27-97   After hours: (258-21) 49-07-23
Fax: (258-21) 49-01-14
Web:  http://maputo.usembassy.gov/

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Employment-Legal Requirements

All promises of employment for 90 days or longer are required to be in writing regardless of the nature of the work and whether or not it is for part-time or full-time employment. Permanent employment contracts are made upon completion of probationary periods.  Intermediate and higher-level technicians and employees who hold leadership and management positions are subject to an 180-day probation, and all other positions must first satisfy a 90-day probationary period.  A normal work week consists of 45 to 48 hours, five days per week for full-time employment. Overtime up to 56 hours per week is permitted. By law, employees must be given at least one rest day per week.

Mozambique also has strict regulations regarding the employment of foreigners, particularly when there are qualified citizens who can perform the same or similar tasks and possess equal training. A work permit, valid for up to two years and renewable for an additional two years, is a requirement when hiring foreign employees.

More details regarding employment laws in Mozambique can be found at:

Centro de Arbitragem Laboral/Labour Arbitration Center
Rua General Pereira D' Eça, nº 90
P.O.Box 1839 * Maputo - Mozambique
Phone: 258 21 496900
Fax: 258 21 496802
Web: http://www.arbitrationmz.com

Terminating Employees

If an employee is suspended due to a work slowdown or temporary stoppage, the employer shall pay 75, 50, and 25 percent of their salary for the first, second, and third months, respectively. If work does not resume beyond the three-month period, then the employment contract will be considered terminated and additional compensation may be due at this time. For terminations where work is not expected to resume, a severance equal to 3 to 30 days per each year of service shall be paid to the employee in accordance with the employee's hourly wages. (Refer to the Labor Law of 2010 for exact details.)  Employment contracts may also be terminated by the employer for just cause including reasons such as breach of employment duties or general inaptitude that do not require payment of severance. 

An employee may terminate an employment contract by providing written notice seven days prior to their last day of employment. If an employee terminates employment and can provide grounds showing the employer was at fault, he/she is entitled to receive severance equal to 45 days of pay for each year of service. If an employee does not have grounds for requesting a termination, then he/she must provide a 15- to 30-day minimum notice period determined by the length of employment already completed.

Legally Mandated Benefits and Leave

Maternity Leave 60 days at 100 percent pay*
Unpaid Family Leave 30 days (maximum) to care for minor children in case of illness or accident (unpaid)
Bereavement Leave 5 days (Death of an immediate family member such as spouse, father, mother, children, stepchildren, siblings, grandparents, stepfather, or stepmother).  2 days bereavement leave for the death of in-laws, uncles, aunts, cousins, nieces, nephews, or grandchildren

*When there is a clinical risk to the female employee or the child that prevents the employee from working, she is entitled to leave of absence before the birth, for such period as is necessary to avert the risk and which has been medically prescribed, without prejudice to the maternity leave established. Also permitted are periods of convalescence for female employees in cases of abortions or miscarriages occurring more than seven months before the expected birth.

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Entry and Exit Requirements

All nonresident foreigners require a visa to enter Mozambique. It is recommended that travelers acquire the appropriate visa prior to departing for Mozambique, though a one-entry visa can be obtained at country points of entry, including airports. Foreigners in Mozambique without a valid visa can expect to pay a substantial fine for each day they are in Mozambique illegally. The passports of all travelers who wish to enter Mozambique must be valid for six months upon arrival, and they must contain at least three clean (unstamped) visa pages each time entry is sought. Although applications may be made personally at any Mozambican embassy or consulate in South Africa, the fee is up to five times the amount charged in the United States or at border-crossing points for a tourist visa to Mozambique. 

Normal visas are issued to tourists and private visitors, including those traveling on business. People visiting the country on official business are given official visas. The visa will normally be issued within 10 days or within three to five days upon payment of an "urgency" fee. Entry visas are normally valid for 30 days and renewable for two further periods of 30 days each. Multiple entry visas may be obtained for a period of up to 180 days but only after arrival and having had a business venture approved in the country.

All travelers should be vaccinated against yellow fever and carry their yellow fever vaccination book to avoid complications at the border.

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Intellectual Property

The Industrial Property Institute (IPI) is under the governance of the Ministry of Industry and Trade. The registration of marks is done at the IPI headquarters in Maputo. The register can be done by the owner of the right, its representative, or by a proxy such as an official patent and trademark agent (recognized by the IPI). According to the Mozambican industrial property law, all procedures related to the industrial property rights undertaken before IPI must be done personally by the applicant or by a proxy with qualification as a patent and trademark agent.

Nature of Rights and Available Protection

The National Assembly passed a copyright and related rights bill in 2000. This bill, combined with the 1999 Industrial Property Act, brought Mozambique into compliance with the World Trade Organization (WTO) agreement on the Trade Related Aspects of Intellectual Property Rights. The law guarantees the security and legal protection of industrial property rights, copyrights, and other related rights. General patent protection is available by submitting a national filing. Mozambique is a member of the International Convention, Patent Cooperation Treaty (PCT), WTO, and African Regional Intellectual Property Organization (ARIPO).

Patents

The maximum term of protection for a standard patent is 20 years from the date of filing. To maintain the validity of a patent application, maintenance fees are due on an annual basis based upon the initial date of filing. Additionally, a patent must be utilized within three years of the date on which it was granted (or four years following the date of application) in order to enforce your rights.

Trademarks

The initial registration of a trademark lasts for a period of 10 years. But it can be renewed for successive periods of 10 years upon payment of the appropriate fees. 

Enforcement

Recently private-sector organizations have been working together with various government entities on an intellectual property taskforce team in an effort to combat intellectual property right infringement and related public safety issues.

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Legal and Registration of a Business Entity

Most companies find it advantageous to establish a local branch office in Mozambique to assist in dealing with local officials and clients. Doing so typically involves registration with three separate ministries: the Ministry of Industry and Commerce, the Ministry of Planning and Development, and the Ministry of Finance. Red tape, though reduced, remains a problem, and due diligence and care should be taken in securing local licenses and permits.

On its Web site the World Bank lists 9 steps for starting a business in Mozambique and estimates the length of time as two to three weeks to complete the process. 

Local Representation (branch)

The granting of licenses for agencies or commercial representations is under the Ministry of Industry, Trade and Tourism. In Mozambique business activities can be carried out by individual(s) or commercial companies. Persons who wish to set up a company typically choose between either an LDA, or "Sociedade por quotas," or an SARL, or "Sociedade Anonima."

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Safety and Crime

Overland travel after dark can be extremely dangerous due to poor road conditions, lack of emergency services, and the increased potential for vehicle hijacking. Visitors should be particularly vigilant when driving on the main thoroughfares connecting Mozambique and South Africa as incidents of vehicle theft, including assault and robbery, have been reported. Official Americans serving in Mozambique are prohibited from overland travel outside Maputo city limits after dark, and they are encouraged to travel in convoys of two or more vehicles when outside of the city during daylight hours.

Accidents involving pedestrians are increasingly common, and some reports suggest pedestrians purposely throw themselves in front of vehicles driven by foreigners in order to extort reparation payment. Due to residual landmines, overland travelers are advised to remain on well-traveled roads or seek local information before going off-road outside of Maputo and other provincial capitals.

Drivers should obey police signals to stop at checkpoints, which are common throughout Mozambique. Foreigners in Mozambique for more than 90 days are required to have an international driver's license or to obtain a Mozambican driver's license.

Although the vast majority of visitors complete their travels in Mozambique without incident, the most serious threat facing travelers is crime. Carjacking and street crimes, including mugging, purse-snatching, and pick-pocketing are common, both in Maputo and in secondary cities. Visitors must be vigilant when out in public areas and should not display jewelry or other expensive items and avoid isolated areas.

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Taxes

Mandatarians and representatives of corporate persons are required to have work permits issued at least 30 days before the commencement of activity. An application form must be submitted together with documentary evidence of the mandate conferred in terms of the company's articles of association and the applicable law, and an authorization to conduct the activity in Mozambique issued by the competent authority (operating license). Foreign employees are allowed to perform work in Mozambique without authorization from the Ministry of Labor for a period of up to 90 days. The company must inform the Ministry of Labor of this situation. Where this period of time is exceeded, foreign employees are subject to authorization from the Ministry of Labor. 

No tax treaty currently exists between the United States and Mozambique, though one is purported to be in the negotiation stages. The tax year in Mozambique is defined as the calendar year ending on December 31st.

Individual and Employee Taxation

Determining Tax Residence

Residents are defined as persons who reside permanently in Mozambique, have resided in Mozambique for more than 180 days in a tax year, or have resided in Mozambique for 180 days or less but as of December 31st occupy a residence under circumstances indicating intent to continue occupancy on a regular basis.  Additionally, persons who form part of a household are deemed to be resident, provided that the person in charge of managing the household is resident in Mozambique. A resident is also defined as any person with Mozambican identity papers or a foreign passport that has been issued "resident" status by the Mozambique authorities.

NonTax Resident Employees

A nonresident is a person with a foreign passport who is in Mozambique on a visa that is valid for a specific period. Nonresidents (those who have been in Mozambique for less than 180 days) are subject to a withholding flat rate tax on any and all income earned from a Mozambique source. The transfer of income abroad to nonresidents is not allowed unless the tax due has been paid or guaranteed.

Taxable Income

In general, professional income tax is levied on employment income paid in cash or in kind. But subsidies for meals and entertainment, and traveling allowances up to certain amounts, are not taxable. Tax on all forms of remuneration is called professional income tax. Residents are subject to professional tax only on employment income earned in Mozambique and on work performed abroad paid for by a Mozambique company.  The income tax rates applicable to resident individual employees, whether national or foreign are can be found on the Mozambique chamber of commerce Web site.

Corporate and Employer Tax Obligations

Tax Residency for a Business

A resident company is a company or entity registered in Mozambique. The withholding tax rate for a resident company varies.

Social Security Rates

Social security contributions are payable monthly on all salaries, wages, regular bonuses, or other regular income, excluding meal subsidies. The employer and employee contribute differing amounts of the employee's monthly salary. The employer withholds the employee's contributions.

Foreign Tax Relief

The only form of foreign tax relief provided to resident companies is the provision that only one-third of foreign-source profits (before taxes) are subjected to Corporate Tax.

Value-Added Tax

VAT was implemented in Mozambique on June 1, 1999. VAT is applicable on the transaction of goods and services within the national territory, as well as on imports of goods to the country.

In addition to the above, there is a specific goods consumption tax, which is over and above the payment of VAT and payable on the importation and production of specific luxury goods. These include, for example, luxury vehicles, tobacco, and alcoholic beverages. The tax rates can vary widely depending on the good in question.

For more information on corporate income tax, social security contributions, and specific VAT rates, please visit The World Bank/Doing Business section of their Web site. 

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Online Resources Use for This Template

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