Executive Summary

Mozambique’s vast natural resources, lengthy coastline with deep water ports, favorable climate, rich soil, and premiere geographic location as the gateway to landlocked countries in southern Africa make it an attractive investment target. While the country welcomes foreign investment, investors must factor in corruption, an underdeveloped financial system, poor infrastructure, frequent natural disasters, and significant operating costs.  Transportation inside the country is unreliable and expensive, while bureaucracy, port inefficiencies, and corruption complicate imports.  Local labor laws remain an impediment to hiring foreign workers, even when domestic labor lacks the requisite skills.  In the last year, the COVID-19 pandemic impacted investment amid an economic downturn. A surging terrorist movement in the same northern province that is home to Mozambique’s nascent natural gas industry has also delayed expected investment.

In April 2021, Total, the lead operator for the USD 20 billion Mozambique LNG project in northern Mozambique, withdrew its staff from the project site, putting construction on hold until the government can guarantee the security necessary for the project to continue. While no formal announcements have been made yet, the move likely delays the project and any future government revenues. Earlier, in April 2020, ExxonMobil announced it would delay the long-awaited final investment decision in its separate USD 25 billion LNG project mostly because of the poor market conditions. A smaller floating LNG platform remains on track to produce first gas in 2023. However, with both major projects on pause, Mozambique’s hopes for a gas bonanza have been delayed.

The COVID-19 pandemic hit Mozambique’s formal economy built around the extractive industries and tourism, but other sectors have seen unexpected benefits. For example, Mozambique’s ports have seen increased volume despite the global slowdown because they remained open while competing ports in South Africa closed. The Mozambican government also launched a new rural development program, Sustenta, supported by a USD 500 million World Bank Loan. Sustenta aims to integrate small holder farmers into robust supply chains to create up to 200,000 jobs and boost annual growth in the critical agricultural sector from 2.3 percent to 5 percent.

Despite the pandemic and terrorism, Mozambique has a decent mid-term outlook. Following four years of reforms since the hidden debt scandal, Mozambique has made progress in the fight against corruption. Thanks in part to these efforts, the IMF and Mozambique entered into discussions to re-launch a new lending program, potentially the first non-emergency budgetary assistance to the government in five years.  If Mozambique continues on this path of reform, it will be better placed to manage its eventual resource income and attract other foreign investments.

U.S. businesses are poised to play a key role in this country’s transformation.  In June 2019, Mozambique signed a commercial Memorandum of Understanding with the Department of Commerce, outlining six key areas for investment including energy, infrastructure, financial services, agri-business, tourism, and fisheries, opening the door to increased cooperation and U.S. investment.  In December 2020, the U.S. government’s Millennium Challenge Corporation also announced it would focus on rural transport and agriculture for its second compact.  While still under development, this compact will make a significant investment in key sectors and help create the enabling environment for additional investments.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 149 of 175 
World Bank’s Doing Business Report 2020 138 of 190 
Global Innovation Index 2020 124 of 131 
U.S. FDI in partner country ($M USD, historical stock positions) 2018 $491M USD 
World Bank GNI per capita 2019 $490 USD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Government of the Republic of Mozambique (GRM) welcomes foreign investment and sees it as a key driver of economic growth and job creation.  With the exception of a few sectors related to national security, all business sectors are open to foreign investment.  Mozambique’s 1993 Law on Investment, No. 3/93, and its related regulations, govern foreign investment.  In 2009, Decree No. 43/2009 replaced earlier amendments from 1993 and 1995, providing new regulations to the Investment Law.

In general, large investors receive more support from the government than small and medium-sized investors.  Government authorities must approve all foreign and domestic investment requiring guarantees and incentives.  Regulations for the 2009 Code of Fiscal Benefits, Law No. 4/2009, were established in 2009 under Decree No. 56/2009.

The Agency for Promotion of Investments and Exports (APIEX, Agencia para a Promocao de Investimentos e Exportacoes) is the primary investor contact within the GRM, operating under the Ministry of Industry and Commerce.  Its objective is to promote and facilitate private and public investment.  It also oversees the promotion of national exports.  APIEX can assist with administrative, financial, and property issues.  Through APIEX, investors can receive exemptions from some customs and value-added tax (VAT) duties when importing “Class K” equipment, which includes capital investments.

Contact information for APIEX is:

Agency for Promotion of Investments and Exports 
Rua da Imprensa, 332 (ground floor)
Tel: (+258) 21313310
Ahmed Sekou Toure Ave., 2539
Telephone: (+258) 21 321291
Mobile: (+258 ) 823056432

Government dialogue with the private sector is primarily coordinated by Mozambique’s Ministry of Industry and Commerce. Most businesses in Mozambique interact with the government via the country’s largest business association, the Confederation of Economic Associations (CTA, Confederação das Associações Económicas de Moçambique). CTA was formed in 1996 and continues to be the dominant and most influential business association in Mozambique.

Limits on Foreign Control and Right to Private Ownership and Establishment

Mozambique investment law and its regulations generally do not distinguish between investor origin or limit foreign ownership or control of companies.  With the exception of security, safety, media, entertainment, and certain game hunting concessions, there were no legal requirements that Mozambican citizens own shares of foreign investments until 2011, when the government adopted Law No. 15/2011, otherwise known as the “Mega-Projects Law.” This law governs public-private partnerships, large scale ventures, and major business concessions and states that Mozambican persons must hold between 5 percent to 20 percent of the equity capital of the project company.  Implementing regulations were approved by the Council of Ministers in 2012.

Article 4.1 of Law 14/2014, often referred to as the “Petroleum Law,” states that the GRM regulates the exploration, research, production, transportation, trade, refinery, and transformation of liquid hydrocarbons and their by-products, including petrochemical activities.  Article 4.6 established the state-owned oil company, the National Hydrocarbon Company (ENH, Empresa National das Hidorcorbonetos) as the government’s exclusive representative for investment and participation in oil and gas projects.  ENH typically owns up to 15 percent of shares in oil and gas projects in the country.

Depending on the size of the investment, the government approves both domestic and foreign investments at the provincial or national level, but there is no other formal investment screening process.

Other Investment Policy Reviews

Mozambique has not undergone a third-party investment policy review in the last three years.

Business Facilitation

Starting a business in Mozambique is a lengthy and bureaucratically complex process which has led to Mozambique’s relatively low score on the World Bank’s 2020 Doing Business Report. In the 2020 report, Mozambique ranked 176 out of 190 economies worldwide in terms of starting a new business, scoring well below the regional average for sub-Saharan Africa, in particular due to the relatively high cost of registering a business and number of procedures required to complete the process.

Registering a business typically involves reserving a name, signing an incorporation contract, payment of registration fees, publishing the company’s name and statutes in the national gazette, registering with the tax authority, and then notifying relevant agencies of the start of activity including the municipality’s one-stop-shop, the municipality’s labor office, national tax authority, and social security institute. According to the World Bank’s estimates, this process takes approximately 17 days. There is no single business registration website.

In May 2020, the Maputo City “one stop shop” known as the balcão de atendimento unico (BAU) introduced reforms that effectively reduced the number of procedures required to set up a new company from 11 to four by consolidating several steps required to register a new business.

Outward Investment

The government does not promote or incentivize outward investment.  It also does not restrict domestic investors from investing abroad.  However, Mozambique does require domestic investors to remit investment income from overseas, except for amounts required to pay debts, taxes, or other expenses abroad.

3. Legal Regime

Transparency of the Regulatory System

Investors face myriad requirements for permits, approvals, and clearances that take substantial time and effort to obtain.  The difficulty of navigating the system provides opportunities for corruption and bribery, a scenario that is aggravated by the prevailing low wages for administrative clerks.  Labor, health, safety, and environmental regulations often go unenforced, or are selectively enforced.  In addition, civil servants have threatened to enforce antiquated regulations that remain on the books to obtain favors or bribes.

The private sector, through CTA, maintains an ongoing dialogue with the government, holding quarterly meetings with the Prime Minister and an annual meeting with the President. CTA provides feedback to the GRM on laws and regulations that impact the business environment on behalf of its members and other business associations. However, because of its exclusive role in communicating with the government on behalf of the private sector, some businesses have expressed concern that minority voices are not heard and that CTA, because of its close relationship with the government, is no longer an effective advocate. In 2019, an American Chamber of Commerce formed in Mozambique to represent the interests of the growing U.S. business community.

Draft bills are usually made available for public comments through the business associations or relevant sectors or in public meetings.  Changes to laws and regulations are published in the National Gazette.  Public comments are usually limited to input from a few private sector organizations, such as CTA.  There have been complaints of short comment periods and that comments are not properly reflected in the National Gazette.  The government is considering a law that would make public consultation on future legislation mandatory.

Overall fiscal transparency in Mozambique is improving in the wake of the 2016 hidden debt crisis which saw the government own up to contracting over USD 2 billion dollars in secret loans in 2013 and 2014.  Publicly available budget documents provide an incomplete picture of the government’s revenue streams, especially with regard to natural resource revenues and allocations to and earnings from state-owned enterprises (SOE), which generally did not have publicly available audited financial statements. Government reporting on debt, however, has improved with SOE debt now included in the national budget. The government also maintains off-budget accounts not subject to adequate audit or oversight.  For portions of the budget that were relatively complete, the provided information is generally reliable.

International Regulatory Considerations

Mozambique is a member of the Southern African Development Community (SADC).  In 2016, the SADC Economic Partnership Agreement (EPA) Group, which includes Mozambique, Botswana, Lesotho, Namibia, South Africa, and Swaziland, signed an EPA with the European Union.  Mozambique exports aluminum under this EPA agreement.

The GRM ratified the Trade Facilitation Agreement (TFA) in July 2016 and notified the WTO in January 2017.  A National Trade Facilitation Committee was established to coordinate the implementation of the TFA.

Mozambique is a member of the WTO and generally notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). The National Institute of Norms and Quality (Instituto Nacional de Normalização e Qualidade, INNOQ) falls under the supervision of the Ministry of Industry and Commerce and it is the WTO enquiry point for TBT-related issues. INNOQ is a member of the International Standards Organization (ISO) and carries the mandate to issue ISO 9001 certificates. According to the WTO’s 2017 Trade Policy Review of Mozambique no specific trade concerns have been raised about Mozambique’s TBT measures in the WTO TBT Committee.

Like most countries in Africa, Mozambique leans toward the use of standards based on existing ISO and International Electrotechnical Commission (IEC) standards for most products.

Legal System and Judicial Independence

Mozambique’s legal system is based on Portuguese civil law and customary law.  In 2005, the Parliament approved major revisions to the Commercial Code which went into effect in 2006.  The previous Commercial Code from the colonial period had clauses dating back to the 19th century and did not provide an effective basis for modern commerce or resolution of commercial disputes. In 2018, the Council of Ministers passed new provisions for the Commercial Code, which were debated and approved in Parliament.

In recent years Mozambique’s legal system has shown a degree of independence. For example, the GRM has pursued some politically connected former officials and their family members for their role in the hidden debt scandal. The Attorney General has also prosecuted several lower level officials, including those connected with wildlife trafficking.

Laws and Regulations on Foreign Direct Investment

The 2009 Code of Fiscal Benefits, Law No. 4/2009, and Decree No. 56/2009 form the legal basis for foreign direct investment in Mozambique. Operating within these regulations, APIEX analyzes the fiscal and customs incentives available for a particular investment.  Investors must establish foreign business representation and acquire a commercial representation license.  During project development, investors must document their community consultation efforts related to the project.  If the investment requires the use of land, the investor will also have to present, among other documents, a topographic plan or an outline of the site where the project will be developed.

If the investment involves an area under 1,000 hectares and the investment is under approximately USD 25 million, the governor of the province where it will be located can approve the investment.  There has been no update to the law since the introduction of provincial-level State Secretaries with the new government in 2020. APIEX has the authority to approve any project between roughly USD 25 million – USD 40 million. The Minister of Economy and Finance must approve national or foreign investment between USD 40 – USD 225 million.  If the investment (national or foreign) occupies an area of 10,000 hectares or an area superior to 100,000 hectares for a forestry concession, or it amounts to more than USD 225 million, the project must be approved by the Council of Ministers.  More detailed information regarding all requirements to invest in Mozambique can be found on the APIEX website: .

Competition and Antitrust Laws

The so called “Competition Law,” Law No. 10/2013, adopted in 2013 established a modern legal framework for competition and created the Competition Regulatory Authority. A budget has still not been allocated to this body, but the government appointed a director in April 2020.

The framework is inspired by the Portuguese competition enforcement system.  Violating the prohibitions contained in the Competition Law (either by entering into an illegal agreement or practice or by implementing a concentration subject to mandatory filing) could result in a fine of up to 5 percent of the turnover of the company in the previous year.  Competition Regulatory Authority decisions may be appealed in the Judicial Court in Maputo, for cases leading to fines or other sanctions, or to the Administrative Court for merger control procedures.

Expropriation and Compensation

While there have been no significant cases of nationalization since the adoption of the 1990 Constitution, Mozambican law holds that “when deemed absolutely necessary for weighty reasons of national interest or public health and order, the nationalization or expropriation of goods and rights shall (result in the owner being) entitled to just and equitable compensation.” No U.S. companies have been subject to expropriation issues in Mozambique since the adoption of the 1990 Constitution.

Dispute Settlement

ICSID Convention and New York Convention

Mozambique acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1998.

Investor-State Dispute Settlement

For disputes between U.S. and Mozambican companies where a BIT violation is alleged, recourse via the international Alternative Dispute Resolution may also be available.  No investment disputes in the past ten years have involved U.S. investors. Investors who feel they have a dispute covered under the BIT should contact the U.S. Embassy.

International Commercial Arbitration and Foreign Courts

In 1999 the Parliament passed Law No. 11/99 known as the Law on Arbitration. This law allows access to modern commercial arbitration for foreign investors.  The Judicial Council approved Resolutions No. 1/CJ/2017 and No. 2/CJ/2017 in 2017, creating the Regulations of Mediation Services in Judicial Courts and the Judicial Mediators’ Code of Conduct.  These new resolutions are designed to promote the mediation process as an alternative to litigation.  Labor and commercial arbitration are recognized by local courts as well as cases judged internationally.

The Center of Arbitration, Conciliation, and Mediation (Centro de Arbitragem, Conciliação e Mediação, CACM) offers commercial arbitration. In 2020, CACM handled 38 cases of commercial arbitration, and 24 additional cases are in process.  CACM has 316 arbitrators, 12 of which are international.  However, many contracts do not incorporate a clause that allows conflicts to be resolved via arbitration instead of in the courts which limits the use of arbitration.

Bankruptcy Regulations

In 2013, the GRM adopted a comprehensive legal regime for bankruptcy known as the “Insolvency Law,” Law No. 1/2013. This law streamlined the bankruptcy process and set the rules for business recovery.  The law facilitates potential recovery for struggling businesses and establishes legal methods to declare bankruptcy. Rather than being forced to immediately sell assets or declare insolvency, entrepreneurs now have options to recover normal economic activity and maintain jobs. Under the law, creditors can approve any proposed rescue plan, request that a debtor be declared insolvent, and challenge suspicious transactions. In the 2020 World Bank Doing Business Report, Mozambique ranked 86 overall for resolving insolvency, scoring well above average for sub-Saharan Africa.

4. Industrial Policies

Investment Incentives

The 2009 Code of Fiscal Benefits, Law No. 4/2009, contains specific incentives for entities that intend to invest in certain geographical areas within Mozambique that have natural resource potential, but lack infrastructure and have low levels of economic activity.  Rapid Development Zones (RDZ) were also created to facilitate investment.  Investments in these zones are exempt from import duties on certain goods and are granted an investment tax credit equal to 20 percent of the total investment (with a right to carry the credit forward for five years).  Additional modest incentives are available for professional training and the construction and rehabilitation of public infrastructure, including, but not limited to roads, railways, water supply, schools, and hospitals.

The Regulations for the Code of Fiscal Benefits are set forth in Decree No. 56/2009, which was approved in October 2009.  APIEX can assist companies with the investment incentives stipulated in the Code of Fiscal Benefits.

With the exception of sectors like oil and gas where government participation is mandatory, the government does not issue joint guarantees or jointly finance foreign direct investment projects.

Foreign Trade Zones/Free Ports/Trade Facilitation

Mozambique’s eight free trade zones provide a variety of fiscal exemptions depending on the sector of investment as well as the project location.  Investors should pay close attention to documents and procedures requested in order to establish a business locally or to request fiscal and customs incentives if investing in an industrial free zone. Investors have complained that certain government officials may not be aware of some of the benefits conferred by tax free status, in particular related to customs and duty-free imports.

In January 2021, the government of Mozambique approved the Limpopo Valley Agribusiness Economic Zone with the main objective to explore and develop the agricultural potential of the Limpopo Valley. The newly approved zone falls under the 2009 Code of Fiscal Benefits. According to the government, studies are now under way to identify new infrastructure investments and potential incentives to realize the agro-ecological potential of the region and maximize economic efficiency and social wellbeing.

Performance and Data Localization Requirements

In general, the government generally does not require investors to purchase from local sources, nor does it require technology or proprietary business information to be transferred to a local company.  However, within certain sectors, the government has implemented specific local content requirements. In the oil and gas sector in particular, the government’s 2014 Petroleum Law, Law No. 21/2014, requires oil and gas companies to give preference to Mozambican individuals and companies if the goods or services are of an internationally comparable quality and competitively priced. The exact local content requirements for each project operating under this law are negotiated within the so-called “Local Content Working Group,” an inter-ministerial body responsible for implementing the government’s local content strategy. The government continues to debate the idea of a local content law which could create additional requirements and consolidate the various requirements across sectors into a single law. The proposed law has been drafted and presented at the Council of Ministers but as of April 2021 has not been finalized or adopted.

Companies may hire foreign workers only when there are not sufficient Mozambican workers available that meet specific job qualifications.  The Ministry of Labor enforces quotas for foreign workers as a percentage of the workforce within companies that varies based on the size of the company.  Per the 2007 Labor Law, Law No. 23/2007, companies with 10 employees or fewer can employ no more than 10 percent expatriates (effectively one person in a 10-person company), companies with 11-100 employees may employ up to 8 percent expatriates, and large companies with over 100 employees may employ no more than 10 percent expatriates.  Many companies use foreigners as outside consultants, which allows them to get around the quota system by hiring a “company” instead of a foreigner who would be subject to the quota requirement.  Work permits for foreigners cost approximately USD 370 and take at least one month to be issued.  All investments must specify the number and category of Mozambican and foreign workers.

There are currently no data localization policies in effect in Mozambique.  Several international companies offer cloud services to Mozambique; however, none operate in-country data centers. In addition to the government operated Maluana Park and Teledata centers, Mozambique hosts three data centers: SEACOM, Webmasters, and Eduardo Mondlane University. As part of the e-Government strategy, Maluana Park aims to ensure the migration of computing systems used in public administration. None of Mozambique’s facilities are carrier neutral and they do not host individual servers.

The government agency responsible for enforcing IT policies and rules is:

UTICT – Unidade Tecnica de Implementacao da Politica de Informatica
Technical Implementation Unit for IT Policy
Tel: (258) 21 309 398; 21 302 241
Mobile (258) 305 3450

5. Protection of Property Rights

Real Property

The legal system recognizes and protects property rights to buildings and movable property. Private ownership of land, however, is not allowed in Mozambique.  Land is owned by the State. The government grants land-use concessions called Direitos de Uso e Aproveitamento de Terra (DUAT) for periods of up to 50 years, with options to renew for an additional 50 years. Essentially, land-use concessions serve as proxies for land titles.  There is no robust market in land use rights and land use titles are not easily transferable.  The process to award land concessions is not transparent and the government at times has granted overlapping land concessions that often require lengthy negotiation to resolve.  It takes an average of 90 days to issue a land title for most of the concessions. Banks in Mozambique rely on property other than land – cars, private houses, and infrastructure – as collateral, as it is not currently possible to securitize property for lending purposes.

In urban areas, the DUAT of a plot passes automatically to the purchaser following the sale of a house or building.  In rural areas, the purchaser of physical infrastructure or improvements and crops must request authorization from the government for the DUAT to be transferred.  This requirement is often cited as a barrier for loans in the agricultural sector and is seen as a potential barrier to investment and the transition to more intensive, commercial forms of agriculture.

Investors should be aware of the requirement to obtain endorsement of their projects in terms of land use and allocation at a local level from the affected communities.  APIEX assists investors in finding land for development and obtaining appropriate documentation, including agricultural land.  The government advises companies on relocating individuals currently occupying land designated for development; however, companies are ultimately responsible for planning and executing resettlement programs.

According to data from the 2020 World Bank Doing Business Report, Mozambique ranked 136 out of 190 countries on Registering Property, with the country achieving more or less the average continent-wide score. While Mozambique scored relatively well in terms of the time and cost of the property registration process, Mozambique lost points for number of procedures involved in registering property and the quality of the country’s land administration index.

Intellectual Property Rights

Despite enforceable laws and regulations protecting Intellectual property rights (IPR) and a relatively simple registration process, it remains difficult for investors to protect their IPR in Mozambique. Private sector organizations work with various government entities on an IPR taskforce to combat IPR infringement and related public safety issues stemming from the use of counterfeit products, but enforcement in Mozambique remains sporadic and inconsistent. Mozambique’s National Inspectorate of Economic Activities (INAE) has increased seizures, confiscating fake Hewlett-Packard (HP) toner cartridges, Nike, Adidas, Ralph Lauren, and other falsely branded merchandise in several raids in 2019. However, in general, enforcement and prosecutions are limited.  Pirated DVDs and other counterfeit goods are commonly sold in Mozambique.

The Parliament passed a copyright and related rights bill in 2000, which, when combined with the 1999 Industrial Property Act, brought Mozambique into compliance with the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).  The law provides for the security and legal protection of industrial property rights, copyrights, and other related rights.  In addition, Mozambique is a signatory to the Bern Convention, as well as the New York and Paris Conventions.

Mozambique joined the African Regional Intellectual Property Organization (ARIPO) in February 2020. Joining ARIPO paved the way for Mozambique to implement the Banjul Protocol and the government deposited its instrument of accession to the protocol at ARIPO in May 2020. Mozambique’s adhesion to ARIPO should facilitate filing trademarks as ARIPO processes are standardized across all member states and valid across all jurisdictions.

Mozambique is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at  .

6. Financial Sector

Capital Markets and Portfolio Investment

The Mozambique Stock Exchange (Bolsa de Valores de Mocambique, BVM) is a public institution under the guardianship of the Minister of Economy and Finance and the supervision of the Central Bank of Mozambique.  In general, the BVM is underutilized as a means of financing and investment.  However, the government has expressed interest in reforming market rules in an effort to increase capitalization and potentially prepare the ground for new rules that would require foreign companies active in Mozambique to be listed on the local stock exchange. Corporate and government bonds are traded on the BVM and there is only one dealer that operates in the country, with all other brokers incorporated into commercial banks, which act as the primary dealers for treasury bills.  The secondary market in Mozambique remains underdeveloped.  Available credit instruments include medium and short-term loans, syndicated loans, foreign exchange derivatives, and trade finance instruments, such as letters of credit and credit guarantees.  The BVM remains illiquid, in the sense that very limited activity occurs outside the issuing time.  Investors tend to hold their instruments until maturity.  The market also lacks a bond yield curve as government issuances use a floating price regime for the coupons with no price discovery for tenures above 12 months.

The GRM notified the IMF that it has accepted the obligations of Article VIII sections 2, 3, and 4 of the IMF Articles of Agreement, effective May 20, 2011.

Money and Banking System

According to the Mozambican Bank Association December 2020 bank survey, there are 19 commercial banks operating in Mozambique. The top three banks – Banco Comercial e de Investimentos (BCI), Banco Internacional de Mocambique SA (BIM), and Standard Bank – account for 69 percent of the total assets, total loans and advances, and total deposits held by commercial banks in Mozambique.

Between 2018-2019, the value of non-performing loans (NPL) decreased by 2 percent, but the NPL ratio worsened from 8.5 percent to 9.1 percent over the same period.  Banking sector profits have dropped by 2 percent due to the reduction of prime lending rates, costs of rehabilitation of branches and property damage from cyclones Idai and Kenneth, and reduced commission income following new Central Bank legislation limiting charges for certain services to promote financial inclusion.

In 2016, Mozambique launched a six-year National Financial Inclusion Strategy which has led to limited improvements in access to formal financial services. According to 2019 FinScope data, 21 percent of the population has access to a bank account, still well below the country’s 2022 target of 60 percent. As of March 2020, Mozambique had 706 bank agencies, 1,755 ATMs and 36,701 point of sale devices. Most banking locations are concentrated in provincial capitals and rural districts often have no banks at all.  Thanks to the partnership between mobile communications companies and banks for electronic or mobile-money transactions, access to financial services is improving. The number of services available from ATMs is also increasing. There are also 1,697 banking agents in the country that provide basic banking services to customers without access to a bank branch.

Credit is allocated on market terms, but eligibility requirements exclude much of the population from obtaining credit. Banks request collateral, but since land cannot be used as collateral, the majority of individuals do not qualify for loans. Foreign investor export activities in critical areas related to food, fuel, and health markets have access to credit in foreign and local currencies.  All other sectors have access to credit only in the local currency.

Foreign Exchange and Remittances

Foreign Exchange

In 2017 Mozambique approved new foreign exchange control rules in Law No. 49/2017. Under the terms of the new law, Mozambican residents are now required to deposit export earnings into an export earnings account in foreign currency, which can only be used for specifically defined purposes.  Under the new decree, foreign exchange operations will now be processed electronically in real time by the commercial banks.  Applications for capital operations are now processed by commercial banks and forwarded to the Central Bank. Foreign direct investment (FDI) up to USD 250,000 no longer requires prior authorization from the Bank of Mozambique and only needs to be registered with the commercial bank handling the transactions.  Shareholder and intercompany loans made by foreign entities up to USD 5 million require no authorization from the Central Bank, provided the loans are interest free or lower than the base lending rate for the relevant currency, the repayment period is at least three years, and no other fees or charges apply.

A special foreign exchange regime for oil, gas, and mining sectors allows for greater flexibility in foreign exchange and financing operations.  The law, which went into force in January 2018, stipulates that profits from petroleum rights are entirely taxed at an autonomous tax rate of 32 percent.  The law also guarantees tax stabilization for up to 10 years, starting from the beginning of commercial production with an investment amount of USD 100 million.  The Ministry of Economy and Finance can also approve the use of U.S. dollars, if the company has invested at least USD 500 million and more than 90 percent of its transactions are in U.S. dollars.  The law also revoked a 50 percent tax rate reduction related to the production tax that was available when extracted products were used locally.

Remittance Policies

The 2021 Central Bank’s Aviso 6/GBM/2020 requires at least 30 percent of export proceeds to be converted into local currency.  However, per the Central Bank Circular issued in February 2021, this conversion rule does not apply for rent paid in a foreign currency by non-resident entitles to a Mozambican landlord.

Sovereign Wealth Funds

In October 2020, Mozambique’s Central Bank published an initial proposal for a Sovereign Wealth Fund (SWF) to manage the expected increase in government revenues from the natural gas projects in northern Mozambique. As of April 2021, the government is currently revising the proposal and aims to put forward a formal legislative proposal by the end of the year for review and approval by Mozambique’s National Assembly.

The initial draft from the Central Bank calls for 50 percent of government revenue from the natural gas sector as well as other extractive industries to be used to fund the SWF for a period of 20 years and sets up strict payout criteria for any withdrawals from the SWF before it reaches maturity. In general, the government’s proposal follows the Santiago Principles and the government is working with the International Forum of Sovereign Wealth Funds to refine its proposal. In total, the government estimates it will receive USD 96 billion from the Rovuma Basin natural gas projects over the lifetime of the projects. Delays in construction and evolving international energy prices, however, could lead to lower-than-expected returns from the natural gas projects.

7. State-Owned Enterprises

Mozambique’s SOEs have their origin in the Marxist-Leninist government established after independence in 1975, with a variety of SOEs competing with the private sector in the Mozambican economy.  Government participation varies depending on the company and sector. SOEs are managed by the Institute for the Management of State Participation (Instituto de Gestão das Participações do Estado, IGEPE).  According IGEPE’s 2019 annual report, IGEPE manages 12 public SOEs, 16 wholly or majority state-owned enterprises, and 23 other enterprises which are partially state-owned.  IGEPE’s holdings are partially detailed on its website: 

Some of the largest SOEs, such as Airports of Mozambique (Aeroportos de Moçambique) and Electricity of Mozambique (Electricidade de Moçambique) have monopolies in their respective industries.  In some cases, SOEs enter into joint ventures with private firms to deliver certain services.  For example, Ports and Railways of Mozambique (CFM, Portos e Caminhos de Ferro de Moçambique) offers concessions for some of its ports and railways. Many SOEs benefit from state subsidies.  In some instances, SOEs have benefited from non-compete contracts that should have been competitively tendered.  SOE accounts are generally not transparent and not thoroughly audited by the Supreme Audit Institution.  SOE debt represents a potentially significant liability for the GRM.  SOEs were also at the heart of the hidden debt scandal revealed in 2016.

In 2018, the Parliament passed a Law No. 3/2018, which broadens the definition of SOEs to include all public enterprises and shareholding companies.  The law seeks to unify SOE oversight and harmonize the corporate governance structure, placing additional financial controls, borrowing limits, and financial analysis and evaluation requirements for borrowing by SOEs.  The law requires the oversight authority to publish a consolidated annual report on SOEs, with additional reporting requirements for individual SOEs.  The Council of Ministers approved regulations for the SOE law in early 2019, and in 2020 the Ministry of Economy and Finance published limited information on SOE debt.

Privatization Program

Mozambique’s privatization program has been relatively transparent, with tendering procedures that are generally open and competitive.  Most remaining parastatals operate as state-owned public utilities, with government oversight and control, making their privatization more politically sensitive.  While the government has indicated an intention to include private partners in most of these utility industries, progress has been slow.

8. Responsible Business Conduct

Larger companies and foreign investors in Mozambique tend to follow their own responsible business conduct (RBC) standards.  For some large investment projects, RBC-related issues are negotiated directly with the GRM.  RBC is an increasingly high-profile issue in Mozambique, especially in the extractive industries, with some projects requiring resettlement of communities.

The Government of Mozambique (GRM) joined the Extractive Industries Transparency Initiative (EITI) in May 2009.  The EITI Governing Board labeled Mozambique as a compliant country in 2012.

Following the emergence of a violent extremist group in northern Mozambique in 2017, the government turned to private military companies (PMCs) to provide logistical and tactical support to Mozambican military and police forces. In March 2021, one PMC operating in Mozambique was accused of carrying out indiscriminate attacks on civilians by Amnesty International. The government’s contract with this PMC ended on April 6, 2021. Mozambique is not a signatory of the Montreaux Document on Private Military and Security Companies, does not support of the International Code of Conduct or Private Security Service Providers, nor does it participate as a government in the International Code of Conduct for Private Security Service Providers’ Association. In March 2021, officials from the Ministries of Defense, Justice, and the semi-independent Human Rights Commission participated in a series of workshops organized by the Center for Democracy and Development on the the Voluntary Principles of Security and Human Rights in Cabo Delgado Province.

Additional Resources 

Department of State

Department of Labor

9. Corruption

Corruption is a major concern in Mozambique.  Though Mozambique has made progress developing the legal framework to combat corruption, the policies and leadership necessary to ensure effective implementation have been insufficient.  While the 2016 hidden debt scandal involving a cadre of former government officials is the most infamous example of government corruption, it is not the only case.

In a February 2021 interview, the spokesperson for Mozambique’s Central Office for Combatting Corruption (Gabinete Central de Combate à Corrupção, GCC) called the cost of corruption in Mozambique “violent.” According to GCC estimates, corruption led to the loss of over USD 15 million in state revenue in 2020. Mozambique fell three places on Transparency International’s 2020 Corruption Perceptions Index and now ranks 149 out of 180 countries. In releasing the 2020 report, Transparency International highlighted concerns about the alleged role of senior government officials in controlling lucrative business deals, reports of rushed public procurement during the COVID-19 pandemic that did not follow guidelines, and persistent rumors surrounding the role of police in a recent string of kidnappings of business people in Mozambique. In 2019, the government in cooperation with the IMF, also released a Diagnostic Report on Transparency, Governance and Corruption outlining 29 measures to fight corruption and improve transparency.  The full report is available online at: .

Mozambique’s civil society and journalists remain vocal on corruption-related issues.  Action related to the hidden debt scandal is being led by a civil society umbrella organization known as the Budget Monitoring Forum (Forum de Monitoria de Orcamento, FMO) that brings together around 20 different organizations for collective action on transparency and corruption related issues.  A civil society organization that participates in the FMO, the Center for Public Integrity (Centro de Integridade Publica, CIP), also continues to publicly pressure the government to act against corrupt practices.  CIP finds that many local businesses are closely linked to the government and have little incentive to promote transparency.

Resources to Report Corruption

Contact at government agency or agencies responsible for combating corruption:

Ana Maria Gemo
Central Anti-Corruption Office (Gabinete Central de Combate a Corrupcao)
Avenida 10 de Novembro, 193
+258 82 3034576

Contact at “watchdog” organization:

Borges Nhamirre
Project Coordinator Extractive Industries
Center for Public Integrity (CIP, Centro de Integridade Publica)
Rua Fernão Melo e Castro, 124
+258 84 8866440 

10. Political and Security Environment

Terrorism in northern Mozambique poses a significant threat to investment, in particular in Cabo Delgado Province. A March 24 attack on Palma town, where many expatriate LNG workers stayed, in the vicinity of the Total camp, led Total to suspend operations and temporarily evacuate all personnel from Cabo Delgado Province (CDP) in April 2021.

The United States designated the Islamic State in Mozambique (ISIS-M) as a Foreign Terrorist Organization and Specially Designated Global Terrorists in March 2021. ISIS provides support to the combatants in northern Mozambique and occasionally claims credit for their attacks.  The violence has resulted in an estimated 2,500 deaths and nearly 700,000 internally displaced persons.  Since 2017, the ISIS affiliate carried out more than 500 deliberate attacks against unarmed civilians.

ISIS-M operates in CDP, which is also the site of the two onshore LNG projects led by Total and ENI/ExxonMobil. The March 24 attack on the district capital of Palma in the vicinity of the LNG project site in March 2021 marked a significant escalation in the level of violence in close proximity to the project and several expatriates were killed.  However, to date, the insurgents’ primary target remains villages and government forces and institutions.

Following the ceasefire and peace agreement signed in August 2019, Mozambique continues to make strong progress in the disarmament, demobilization, and re-integration (DDR) of ex-combatants from Renamo. Although a violent splinter group’s leader remains at large, a significant drop in the number of attacks on road transport along major highways in Manica and Sofala provinces has occurred in early 2021.

11. Labor Policies and Practices

The labor market is dominated by the informal economy with the vast majority of people (approximately 70 percent) working in subsistence agriculture, particularly in rural areas.  People in cities often work in informal trade.

There is an acute shortage of skilled labor in Mozambique.  As a result, many employers hire foreign employees to fill these skill gaps.  The government limits the number of expatriates a business can employ in relation to the number of Mozambican citizens it employs.  The government passed a labor regulation in 2016 strengthening the requirement for employers to devise a skills transfer program that trains Mozambican nationals to eventually replace the foreign workers.

The constitution and law provide that workers, with limited exceptions, may form and join independent trade unions, conduct legal strikes, and bargain collectively.  The law requires government approval to establish a union.  The government has 45 days to register employers’ or workers’ organizations, a delay the International Labor Organization (ILO) deemed excessive. Approximately three percent of the labor force is affiliated with trade unions.  An employee fired with cause does not have a right to severance, while employees terminated without cause do.  Unemployment insurance does not exist and there is not a social safety net program for workers laid off for economic reasons.

The Government of Mozambique is reviewing the Labor Law to align it with international conventions related to forced labor, health and safety issues in mining, and the worst forms of child labor.  The proposed law would also extend the maternity leave period from 60 to 90 days.  The new labor law will also address sexual harassment.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $14.27 billion 2019 $15.29 billion 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2020 $4.375 2018 $491 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2018 $-1 BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A 2019 288% UNCTAD data available at

* Source for Host Country Data: National Statistical Institute (INE, Instituto National de Estatistica), 2019 Annual Statistics published November 2020. ; APIEX

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 43,742 100% Total Outward
Not available.
United Arab Emirates 9,095 21%
South Africa 7,004 16%
Mauritius 3,943 9%
Portugal 3,943 9%
The Netherlands 3,656 8%
“0” reflects amounts rounded to +/- USD 500,000.

The IMF’s Coordinated Direct Investment Survey results for 2019 track loosely with the FDI reported by APIEX—with both sources listing South Africa, Mauritius, Portugal, and the United Arab Emirates (UAE) among Mozambique’s top five foreign investors. However, local data from APIEX diverges significantly in terms of the value of FDI as well as the relative share of each country. According to APIEX, in 2019 FDI in Mozambique totaled USD 637 million, with South Africa accounting for 58 percent of total foreign investment in Mozambique, followed by China, Mauritius, Portugal, and the UAE.

The large share of investment listed from UAE and Mauritius likely is linked to the fact that the Exxon Mobil/ENI and Total led natural gas projects have set up special purpose vehicles for their natural gas projects in these countries.

Table 4: Sources of Portfolio Investment
Data not available.

14. Contact for More Information

Elizabeth Filipe
Economic Assistant
U.S. Embassy Maputo
Avenida Kenneth Kaunda, 193
+32 258 21 29 27 97 

Investment Climate Statements
Edit Your Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future