Mozambique: Commercial Law In Mozambique

Last Updated: 18 December 2018
Article by Adams & Adams


The Republic of Mozambique is located on the south-east coast of Africa, bordered in the north by Tanzania; on the west by Malawi, Zambia and Zimbabwe; on the south-west and south by South Africa and Swaziland; and on the east by the Indian Ocean.

Area: 799 380km2

Population: 22.0 million

Capital: Maputo

Currency: Meticais

GDP: USD 22.19 billion (2010)

Internet domain: .m

zLanguages: Portuguese (official language)

Working week: Monday – Friday

Exports: Aluminium; prawns; cashew nuts; cotton; sugar; citrus; timber; bulk electricity

Imports: Machinery and equipment; vehicles, fuel, chemicals, metal products; foodstuffs; textiles


Business vehicles

There are two main types of companies commonly used by foreign investors:

  • Sociedade por Quotas (equity is referred to as quota).
  • Sociedade Anónima de Responsabilidade Limitada which is loosely equivalent to a joint stock company.


The following steps need to be taken in order to incorporate a company:

  • An application to reserve a name is required which must be approved by the Mozambican Legal Entities Registry Office. A company name can be reserved for a period of 90 days (which is renewable for a further period of 90 days upon request and payment of the relevant fee).
  • The registration process has 3 stages:
  • Signature of the articles of association of the company by means of executing either a public deed signed before a Notary or a private document with notarization of the signatures.
  • Publication of the articles of association in the Official Gazette (Boletim da República).
  • Registration of the articles of association with the Registrar of Companies.
  • Resolutions approving the incorporation of the company passed by shareholders that are legal entities must be submitted together with the articles of association.
  • A license for the specific activity of the company may also be required. The application for the license must be filed together with a plan and detailed description of the property where the company will carry out business, as well as the relevant lease agreement.
  • Sectors such as mining, oil and gas, civil construction, healthcare and laboratories, educational, media and telecommunications and banking and insurance have more complex licensing processes due to specific requirements such as financial capacity, minimum technical staff and minimum share capital.

The time frame for the incorporation of an entity is between 30 and 45 days.

Regulatory reporting

An annual tax return reflecting the balance of tax due must be submitted by 31 May each year, with supporting documents filed by the end of June.

Share capital

There are no minimum share capital requirements.

  • Quota Companies: the quota holders of a quota company may set the capital at a level that is sufficient for the company to carry on its activity. The capital must correspond to the sum of the nominal values of each of the quotas and must be expressed in Mozambican currency.
  • Share Companies: the value of the share capital must always be adequate to achieve the corporate objective and must always be expressed in Mozambican currency.


The corporate bodies for both a quota and share company would include the general assembly (the board of directors). An audit committee or sole auditor may be appointed. A share company would also require a supervisory body and/or person.

The company is managed by one or more directors who may be from outside the company. At least one resident director and company secretary is required.

Are local shareholders required?

Local shareholders are not required and 100% foreign ownership is permitted.

Branch company

Foreign investors may establish branches in Mozambique in the form of agencies or delegations. A branch is more appropriate for a short duration (i.e. to execute a specific contract and the activities permitted under the license granted are restricted to contracts). This procedure can be very bureaucratic.

Foreign entities that wish to carry out commercial activity in Mozambique must apply to the Ministerio da Industria e do Comercio for the licensing of branches, subsidiaries, delegations, agencies, or other forms of representation that are legally established in Mozambique.



  • Law No 10/2013.

The Act will be enforced by the Competition Regulatory Authority (a body which is yet to be formed) and sector regulatory bodies.


Where the applicable thresholds are met, a merger is notifiable to the Competition Regulatory Authority. The thresholds are, however, yet to be determined by the Council of Ministers.

Failure to notify a merger where the thresholds are met (or upon request by the Competition Regulatory Authority where a merger falls below the thresholds) may result in the imposition of a penalty not exceeding 5% of all merging parties' annual turnover for the preceding financial year.

Restrictive Practices

The Act regulates both horizontal and vertical restrictive practices. In the case of the former, a number of agreements, concerted practices or decisions which are specifically prohibited, for example: the adoption of uniform or agreed conduct, the division of markets, price fixing, and restricting or preventing access to the market.

Abuse of Dominance

The abuse of a dominant position by either a single firm or a number of firms is strictly prohibited by the Act.


The Competition Regulatory Authority may impose a penalty not exceeding 5% of the firm's annual turnover for the immediately preceding financial year for any breach of the Act.


Consumer protection is regulated by the Consumer Rights Law No. 22/2009 (CRL). The primary purpose of the CRL is to set out the rights of consumers as well as the reciprocal obligations of suppliers.

Some of the key areas regulated by the CRL are the following:

  • Manufacturing and importation of goods.
  • Distribution and sale of goods and/or services.
  • Public administrative duties.
  • Protection of consumers' economic interest.
  • Agreements concluded between consumers and suppliers.


Currently Mozambique does not have any specific data protection laws. However, there are various constitutional privacy protection provisions which are interpreted in conjunction with the Mozambique Civil Code's provisions so as to provide an effective personal data protection framework.

Data protection issues will thus be addressed in line with the following principles: " The use of computerised means for recording and processing individually identifiable data in respect of political, philosophical or ideological beliefs, of religious faith, party or trade union affiliation or private lives, is prohibited.

  • Access to data bases or to computerised archives, files and records for obtaining information on the personal data of third parties, as well as the transfer of personal data from one computerised file to another that belongs to a distinct service or institution, is prohibited except in cases provided for by law or by judicial decision.


Court structure

The Mozambican legal system is made up of the Administrative Court, Constitutional Council and the Judicial Courts. The Administrative Court is tasked with holding public power accountable and reviews the legality of administrative acts and public spending. The Constitutional Council reviews the constitutionality of Mozambican legislation and will consider the constitutionality and legality of the Mozambican Executive. The Judicial Courts include the Supreme Court and the Appeal Regional Court which are known as the Superior Courts, and District Court and Courts of the Province which are known as Lower Courts.

Time in which matters can be heard

Litigation in Mozambique can be a lengthy and expensive process and it can take a number of years for a judgment to be obtained.

Legal practitioners

There is a single bar for legal practitioners, the Mozambique Bar Association (Ordem dos Advogados de Moçambique).

Alternative dispute resolution

Arbitration is a recognised form of dispute resolution in Mozambique and is currently regulated by the Law on Arbitration, Conciliation and Mediation which is based on the UNCITRAL Model Law. The Centre for Commercial Arbitration, Conciliation and Mediation (CACM) is Mozambique's only arbitral institution. Mozambique is a signatory of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.


Governing legislation

Labour Law No 23/2007.

Particulars of employment

Certain contracts of employment must be in writing.

Forms of contracts

  • Fixed term contracts in excess of ninety days must be in writing justifying the grounds of the fixed term and establish a link between the justifications relied upon and the terms set.
  • A written contract entered into for the performance of temporary duties in certain specified instances.
  • A contract may only be entered into for a period of up to two years, which may be renewed twice by agreement and shall be deemed to be a permanent contract if it exceeds the maximum periods of duration or the number of renewals permitted.
  • Permanent contracts whose duration is not indicated must be in writing.
  • Private employment agency in respect of a temporary employment contract must be in writing, are only allowed in certain permitted circumstances and with the prior authorisation of the Minister of Labour.
  • User contracts which relate to a fixed term contract for services entered into between a private employment agency and a user enterprise must be in writing and state the reasons for using temporary labour; if not, it will be void and the employment relationship between the user enterprise and the employee shall be considered to be permanent.
  • Probation period –
  • Permanent employment contracts shall not exceed 180 days for intermediate and high level technicians and employees who hold leadership and management positions and for all other employees shall not exceed ninety days;
  • A fixed term employment contract shall be ninety days for periods longer than 1 year; thirty days for terms between six months to one year; 15 days for terms up to six months and fifteen days for unspecified term contracts when the term is expected to be ninety days or more;
  • During the probation period either party may denounce the contract without having to show just cause and without having any right to compensation but is required to give a minimum of seven days advance written notice.

Termination / Dismissal

Either by expiry; by mutual agreement; cancellation by either party; or rescission by either party on just cause.

Dispute resolution mechanisms and remedies

The Centre for Commercial Arbitration, Conciliation and Mediation is the only arbitral institution able to handle legal and commercial disputes.


The Mozambican Central Bank controls all foreign direct investment and inward and outward payments. In addition, remittance of profits and repatriation of proceeds from the sale of and liquidation of an investment in Mozambique is permitted for duly approved foreign investment projects.

Foreign investors with approved investments are entitled to transfer abroad up to the whole amount of the profits accruing in each financial year, provided that their tax obligations have been satisfied. Remittances may only be affected through the local banking system upon presentation of tax clearance from the Ministry of Finance.


Income tax

A company is deemed to be a resident if its head office or place of effective management is in Mozambique, or if the business is registered in Mozambique.

A resident company is taxed on its worldwide income and a non-resident company is taxed only on its Mozambique-source income.

Types of taxable income

Capital gains or losses are included in ordinary income and taxed at the company rate. Capital gains derived from the sale of shares of a resident company by a non-resident company without a permanent establishment in Mozambique are fully taxed.

Dividends, interest, royalties and technical services fees paid to residents and nonresidents are subject to withholding tax (rate may be reduced under a tax treaty).

Tax rates

The company tax rate is 32%, although a penalty rate of 35% may be applied to unsubstantiated payments. Dividends tax of 20% is levied on both residents and nonresidents. Interest and royalties are taxed at a rate of 20% on both residents and non-residents. Technical service fees are taxed at 20% (applicable to non-residents).

Double taxation treaties

Currently Mozambique has double taxation agreements with Italy, Mauritius, Portugal, UAE, South Africa, Macau, Vietnam, Botswana and India.

Published in April 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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