Setting Up Your Company in Mozambique – A Comprehensive Guide

Business Entities in Mozambique:

1. Limited Liability Company (LDA): The LDA is the preferred corporate structure for small and medium-sized businesses in Mozambique. It can be established by a single shareholder (who must be an individual) or at least 1 director and 2 shareholders of any nationality. Residence in Mozambique is not mandatory for shareholders.
2. Public Limited Company (SA): Recommended for larger investments, the SA requires at least 3 shareholders, who can be individuals or legal entities. A single director can be appointed when the share capital is below US$17,500, and this director can be of any nationality.
3. Branch Office: Foreign legal entities can establish branch offices in Mozambique. These are not separate legal entities and are controlled by the parent company. A resident individual of any nationality must be appointed as the company’s representative.
4. Representative Office (Commercial Representation): Foreign entities can establish representative offices for market research and promotion activities. They are not allowed to engage in commercial activities and can operate in Mozambique for a renewable 3-year period. A representative in Mozambique must be appointed.

Mozambique Company Registration Procedures:

1. Certificate of Name Reservation: Apply for name reservation at the Balc?o de Atendimento único (BAú) and Legal Entities Registrar.
2. Social Contract and Notary: Draft and notarize the social agreement, signed by all partners or their representatives, along with identification documents.
3. Registration Fees: Pay registration fees via bank deposit or at the Conservatória do Registo das Entidades Legais or Balcao de Atendimento Unico.
4. Publication in the Official Gazette: The company’s statutes must be published in the Official Gazette (Boletim da República) by the Imprensa Nacional of Mozambique.
5. Activity Licenses: Depending on the sector, submit a notification of business commencement or obtain a business license.
6. Declare the Beginning of Activity and Register Employees with INSS: Notify the Provincial Directorate of Labor about activity, employee admissions, and work hours. Provide a staff nominal roll to the Provincial Employment Center.
7. Declare the Beginning of Activity at Tax Authorities: Notify the Tax Department at least 15 days before starting business activity.
8. Registration in the National Social Security Institute (INSS): Register employees with the social security system within 15 days of starting business activity.
9. Insurance Coverage: Obtain group insurance covering employees for workplace accidents and illnesses not covered by INSS.

Accounting & Tax:

• Corporate Tax Regime: Corporate tax rate is 32%, and entities must register with the Mozambique Tax Authority and file annual returns by May 31st following the tax year end. Capital gains are taxed at the same rate, and VAT is 17%.
• Withholding Tax & Tax Treaties: Withholding tax rates apply to dividends, interests, royalties, and technical services fees. Tax treaties may reduce rates for non-resident companies.
• Other Tax Information: Business tax losses can be carried forward for up to 5 years, but carry-back of losses is not allowed. Mozambique has double tax treaties with various countries.

Please note that the information provided here is a summary, and it’s important to consult legal and financial experts when establishing a business in Mozambique to ensure compliance with current regulations and requirements.