The Council of Ministers of Mozambique has approved Decree No. 37/2016 - Regulation of Mechanisms and Procedures for Contracting Citizens of Foreign Nationality, which repeals the previous statute (Decree No 55/2008) and enters into force on November 28, 2016. The Regulation complements the general guidelines set out in the Labor Law – Law No 23/2007, without prejudice to the general immigration law, as the Legal Regime of Foreign Citizens (Law No 05/1993), with its amendments and Regulations that set general rules relating to: entry, stay, exit, rights and the duties of foreign citizens.

The new Decree applies to the hiring of citizens of foreign nationality to work in Mozambique, by Mozambican national or foreign employment entities. The new Regulation also applies to the partners, officers, directors, managers, agents and representatives of employment entities. The new Decree does not apply to the hiring of foreign workers by public institutions and states that private employment agencies may only hire foreign workers for its internal headcount and not for outsourcing purposes.

The Decree sets forth the general conditions for hiring foreigners, including issues such as employment contracts, necessary documentation, procedures, transfers from the workplace and the penalties for noncompliance. The Decree maintains a general rule that foreign contractors must have the necessary academic and professional qualifications and can only be hired when there is no national with such qualifications. Employers must ensure the transmission of knowledge to nationals and implement a training plan for a gradual substitution of foreigners for nationals. The Decree disciplines three contracting regimes for foreigners: the quota regime; the authorization regime; and the short-term basis regime.

The quota regime allows the company to have a share of foreigners, which may equate to 5% to 10% of the number of effective national workers contracted by the employer in the current year. The presentation of an academic or professional Diploma is now required, with an Equivalency Certificate issued by the Mozambican educational authorities . Cases involving investment projects approved by the Government that have been granted a higher percentage quota than this standard must adopt the same rules of this quota regime.

The authorization regime applies when the employer already filled their quota; or in other special cases, such as work in foreign non-governmental organizations, scientific research, teaching or other areas of specialized technical assistance. The request has to be technically justified by the employer and have prior approval from the union of the activity that will be developed by the foreign employee.

The short-term basis regime, which is not accounted for in the calculation of the quota, allows the employer to hire foreigners for a maximum period of 90 days (consecutive or intercalated), over the period of 1 year. This regime is designed for situations involving temporary or unforeseen work involving high scientific knowledge or specialized professional technicians.

Observations in this update are by Tauil & Chequer Advogados and are not intended to provide legal advice. Any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.