Description of the legal system

  • The entire Mozambican legal system is anchored in the Constitution of Mozambique (2004).
  • The Mozambican system clearly sets forth the separation of executive, legislative and judicial powers.
  • The legal system is based on civil law. Legislation is therefore the main source of law.

Hierarchy of laws

Investment Law

  • The Investment Law establishes that investments carried out in Mozambique shall pursue at least one of the below mentioned objectives
Development, rehabilitation, modernization or expansion of  economic infrastructures for the operation of productive activities or for rendering services necessary for supporting productive economic activities and promoting the country’s development Expansion and improvement of  national production or of the capacity to render services which support productive activities Contribution towards training, expansion and development of national entrepreneurs and Mozambican business partners Creation of jobs for national employees and improvement of professional skill levels of the Mozambican labour force Promotion of technological development and the improvement of entrepreneurial productivity and efficiency
Increase and diversification of exports Rendering of productive services and of those generating foreign currency Reduction and substitution of imports Contribution towards improving the supply of domestic markets and the satisfaction of the priority and basic needs of the population Any direct or indirect contribution towards improving the balance of payment and Government budget revenue

 

  • The Mozambican Mining and Petroleum Laws impose that investors must give preference in purchasing goods and services from local sources available in Mozambique which are of an internationally comparable quality and which are offered at competitive prices, in terms of delivery. There is no special quota for employment of Mozambican nationals under the Mining and Petroleum Legislation.

Restrictions on foreign equity ownership

  • The general rule in force is that the economy is open to all sources of investment.
  • Yet, restrictions exist in the following sectors
Restriction on Description
Real Estate Properties that have been previously nationalized by the Mozambican State Real Estate properties which have been nationalized by the Mozambican State after the Independence cannot be transferred to

  1. foreign individuals or
  2. companies whose share capital is held in majority by foreign entities.
Public Works (Construction) To carry public works, the construction company has to get a Public Works Contractors License. To this end, the construction company must:

  1. be registered and operating as a Civil Construction Company for a minimum of 10 consecutive years;
  2. have a majority of Mozambican nationality share capital (individual or held by a legal entity).
Travel agencies Travel Agencies may only be held by a Mozambican major shareholder

Investment guarantees

  • The Government of Mozambique guarantees security and legal protection of all property on goods and rights.
  • Any expropriations have to be
    1. duly motivated by national interest reasons and
    2. equitably compensated.
  • Investments made by foreign investors benefit from extra protection