Mozambique is a rising economic power. Political stability and the economists’ prospects suggest that the country's Gross Domestic Product (GDP) will grow an annual rate of 7.7% until 2015, placing the country among the four most accelerating world growths.
The economic growth is being powered in particular by the structure of the industry sector and the discovery of important energy resources, including coal, salt, graphite, gold, precious stones, marble, and especially coal, oil and natural gas. Particularly in relation to natural gas, Mozambique may become the third largest exporter, since the discovered gas reserves are quite significant, which approximate to those of Algeria, which is the largest African producer, and happen to be among of the five largest natural gas reserves holders in the world.
Having said that, considering that the big companies are developing these sectors - industry and energy resources - and since Mozambique does not have sufficient structures, for instance, in transport, such as railways and roads and bridges, other companies will have to come in order to develop the necessary infrastructures. This will inevitably lead to more growth in many other areas and not only those related to energy resources, thus enabling the country to achieve that expected growth of GDP, boosted by the returns of foreign direct investment.
Now, how to invest in Mozambique?
For historical reasons, Mozambique is one of the African countries where Portuguese companies seek to conduct business, mainly due to their optimal social, cultural and commercial relationships.
The Portuguese presence is still noticeable.
On the one hand, years of legislative activity have left their imprint on the current legislators. Thus, the Mozambican corporate law maintains a striking resemblance to Portuguese legislation on this subject, which makes things easier for those who already have experience with companies in Portugal.
On the other hand, the language itself clearly plays a significant role, not to mention the important fact that the Mozambican tax system similar to the Portuguese tax system.
The latter enables Portuguese companies, despite not having the same economic power of other countries, to have a competitive advantage that they can use at the tax level.
Similarly, partnerships allowing the share of investment risks with companies from other countries may be structured as using Portugal as a gateway to Mozambique.
Indeed, Mozambique has agreements to avoid double taxation with a dozen countries and Portugal is one of them. In Portugal, the dividends received from Mozambique (such as other Portuguese Official Language African Countries -- "PALOPs") may, under certain conditions, not be taxed.
There are also various incentives that vary depending on the region where the investment is made, inter alia, reductions of the income tax, exemption from tax on the repatriation of profits and gains as far as VAT to customs duties is concerned.
In short, the connection between Portugal and Mozambique is presented as an excellent opportunity: elimination of language barriers; treaty to avoid double taxation, Portuguese-based corporate and tax laws, tax benefits, political stability and a favorable business environment.