Joel Almeida • Partner and Head of Tax, Outsourcing and Consulting Services
Joel.Almeida@mazars.co.mz
Mozambique offers a promising environment for investment, driven by consistent economic growth and abundant natural resources. This article aims to provide information on the investment climate in the country, highlighting opportunities, challenges and future prospects.
Political and economic stability
In recent years, Mozambique has experienced a period of positive political and economic stability due to structural reforms implemented and sustainable growth successfully achieved so far. The government has directed its policies towards diversifying the economy and developing infrastructure with the aim of creating a favourable environment for commercial activities:
– Stable Government
The Mozambican government has shown itself to be committed to political and economic stability, creating a favourable climate for investment.
– Economic Growth
Mozambique has seen consistent economic growth, driven by sectors such as energy, mining and agriculture.
– Structural Reforms
The government has implemented structural reforms to improve the business environment and attract foreign investment.
Mozambique has several investment opportunities in a variety of strategic sectors and is rich in natural resources such as gas and minerals
Mozambique has a number of investment opportunities in a variety of strategic sectors in which the country has a wealth of natural resources such as natural gas and minerals and fertile land available for agriculture, as well as ample potential for growth in the energy, tourism, agriculture and infrastructure segments.
Lifeblood
Mozambique holds large reserves of natural gas that have aroused significant interest for the progress of the country’s energy and gas infrastructure.
Key sector opportunities:
Mozambique offers a number of investment opportunities in strategic sectors. The country is rich in natural resources, such as natural gas, minerals and arable land, and has significant potential for growth in the energy, tourism, agriculture and infrastructure sectors:
– Energy
Mozambique has vast reserves of natural gas, which are attracting significant investment for the development of gas and energy infrastructure.
– Tourism
With beautiful beaches, stunning landscapes and a rich culture, Mozambique offers significant potential for tourism development.
– Agriculture
The agricultural sector is one of the main drivers of the Mozambican economy, with opportunities for investment in food production, processing and agro-industry.
Tax and regulatory incentives:
The Mozambican government offers a series of tax and regulatory incentives to attract foreign investment. The new Investment Law (Law no. 8/2023, of 9 June) came into force on 8 September 2023. This law replaces the previous one, which had been in force for around 30 years, and brings several innovations. These incentives aim to stimulate the development of strategic sectors by trying to create a more competitive business environment:
1. tax exemptions
There are tax exemptions for certain activities such as exports and investments in strategic sectors.
2. Investment Incentives
The new law provides for the granting of tax and non-fiscal incentives for investment projects. These incentives may include tax benefits, the creation of special economic zones and industrial free zones.
3. Simplification of Processes
The government has been working to simplify company licensing and registration processes, making the business environment more friendly.
Infrastructure and logistics
Mozambique is investing in expanding and improving its infrastructure, including ports, railways, roads and airports. These improvements are aimed at improving connectivity, reducing logistics costs and facilitating trade:
1. port expansion
The country is investing in new ports and expanding existing ones to increase cargo handling capacity and improve logistical efficiency.
2. Modernisation of railways
The government is modernising and expanding the rail network to improve freight and passenger transport.
The oil & gas sector has attracted the most attention from investors in recent years
3. Road construction
Mozambique is building and improving roads to connect the different regions and facilitate the transport of goods and people.
Challenges vs risks:
Despite significant progress, Mozambique faces a number of challenges and risks that could impact the investment climate. It is important to be aware of these challenges and take steps to mitigate them.
Challenges
- Poverty and social inequality;
- Corruption and lack of transparency;
- Skilled labour;
Risks
- Social risk and political instability;
- Risk of loss of investment and reputation;
- Risk of high training and recruitment costs.
Investor success stories:
Mozambique has attracted investments from several international companies that have found success in different sectors. These success stories demonstrate the viability of the Mozambican market and the potential return for investors.
– Extractive Industry
Mining and natural gas companies have found success in Mozambique, taking advantage of the country’s natural resources.
– Agricultural sector
Agricultural companies have benefited from Mozambique’s fertile land and favourable climate, investing in food production and agro-industry.
– Tourism
Companies in the tourism sector have found success in Mozambique, taking advantage of the country’s beautiful landscapes and rich culture.
In conclusion…
Mozambique offers a number of opportunities for foreign investment, driven by consistent economic growth, abundant natural resources and business-friendly government policies. However, it is important to be aware of the challenges and risks and to take steps to mitigate them.
Detailed Research
Carry out detailed research into the Mozambican market, including sectors of interest, government policies and potential risks.
Networking
Establish contacts with local companies and professionals to gain inside information and build business relationships.
Specialised Consultancy
Consider hiring consultants specialised in investment in Mozambique for guidance and support.
Strategy Development
Develop a solid investment strategy by defining your objectives, goals and action plans.
