Business entities in Mozambique
Since 2003, Healy Consultants provides our Clients with the best corporate structures for doing business in the Republic of Mozambique. There are several ways of doing business in Mozambique, the commonly used corporate structure being the limited liability company. Entrepreneurs may also establishing a public limited company for larger investments. Foreign entities may lastly set up a branch office or a representative office.
The Mozambique limited liability company (Lda)
- The Mozambique limited liability company (LLC, also known as Lda in the country) is the most commonly used corporate structure by entrepreneurs setting up small and medium businesses in Mozambique. A Lda requires at least 1 director and 2 shareholders of any nationality and who do not need to be resident in Mozambique. The shareholders may be individuals or corporate bodies;
- The Mozambique LLC can also be established by a single shareholder. In such case, the shareholder must be an individual.
The Mozambique public limited company (SA)
- The Mozambique public limited company (PLC, also known as SA in Mozambique) is recommended for larger investments in Mozambique. This entity requires at least 3 shareholders, who can either be individuals or legal entities, to be established. A Mozambique public limited company may only appoint a single director when its share capital does not exceed US$17,500. The director can be of any nationality and is not required to be resident in Mozambique. A Mozambique public limited company does not have a stated required minimum share capital, but at least 25% of the entire agreed share capital must be paid in at Mozambique company setup;
- The Mozambique PLC is required by law to appoint a statutory auditor or a board of auditors comprising of 3 or more auditors.
The Mozambique branch (commercial representation)
The Mozambique Commercial Code allows foreign legal entities looking to do business in Mozambique to establish branch offices. A branch office is not considered a separate legal entity therefore the scope of its operations in Mozambique is defined and controlled by the parent company. During Mozambique business setup, the parent company must appoint at least one resident individual of any nationality to be the company’s representative in Mozambique. In order to be able to invoice its Clients, this entity must also register and obtain a business license from the Ministry of Industry and Trade.
The Mozambique representative office (commercial representation)
Foreign entities are permitted to establish representative offices in Mozambique. Unlike a branch office, such corporate structure does not need to be registered for tax and VAT but is then not allowed to engage in any commercial activities within the country. A representative office is permitted to carry on activity in Mozambique for a renewable 3 year period. During Mozambique business setup, the parent company must appoint at least one representative in Mozambique, who can be of any nationality. A representative office is only allowed to conduct i) market research and ii) promote activities of the parent company.
Comparison table between Mozambique business entities
|LLC||PLC||Branch office||Rep office|
|Also known as||Lda||SA||Commercial representation||Commercial representation|
|How long to set the company up?||5 weeks||7 weeks||12 weeks||11 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes|
|Minimum share capital?||US$1||US$1||US$1||US$1|
|File annual tax return?||Yes||Yes||Yes||No|
|Tax registration certificate required?||Yes||Yes||Yes||No|
|Recommended corporate bank account?||Barclays Bank||Standard Bank||BancABC||First National Bank|
|Does our Client need to travel?||No||No||No||No|
|Resident director required?||No||No||No||No|
|Resident shareholder required?||No||No||No||No|
|Minimum directors allowed?||1||1||1||1|
|Tax identification code (TIN) needed?||Yes||Yes||Yes||No|
|Mozambique resident company secretary required?||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||Yes||Yes|
|Mozambique corporate tax rate?||32%||32%||32%||0%|
|Annual financial statements required?||Yes||Yes||Yes||No|
|Statutory audit required?||No||Yes||Yes||No|
|Regulated by?||Ministry of Finance||Ministry of Finance||Ministry of Finance||Ministry of Finance|
|Allowed to issue sales invoices?||Yes||Yes||Yes||No|
|Allowed to sign contracts?||Yes||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||No|
|Can rent an office space in Mozambique?||Yes||Yes||Yes||Yes|
|Can buy Mozambique property?||Yes||Yes||Yes||No|
|Can own equity in other Mozambique companies?||Yes||Yes||Yes||No|
|Total Mozambique business setup costs in Yr. 1||US$18,700||US$19,700||US$25,925||US$24,975|
|Subsequent annual costs (incl. accounting and tax fee)||US$5,800||US$5,800||US$11,690||US$9,390|
|Sample engagement invoice|
Frequently asked questions
How can foreigners setup a company in Mozambique?Foreigners can setup a company in Mozambique relatively easily, thanks to the absence of investment restrictions in most sectors. Healy Consultants will assist our Clients to start an LLC or another type of company in Mozambique without travelling to the country, provided our Firm receives a power of attorney for this purpose.
How to setup a limited liability company in Mozambique?In order to setup a limited liability company in Mozambique, our Clients must provide Healy Consultants with the names and due diligence information for i) two shareholders and ii) one director, who are neither required to be Mozambique citizens nor to reside in the country. They will also be required by Mozambique authorities to provide various documents required for starting a business in Mozambique. After our Firm is engaged, we will provide a list of the aforementioned documents we will need to complete Mozambique company setup requirements.
What business to start in Mozambique?Small entrepreneurs will usually find it easier to incorporate a Mozambique limited liability, while those willing to raise capital for their business will prefer to incorporate a Mozambique public limited company. Foreign corporates who prefer to keep complete control over their Mozambique subsidiary will usually setup a branch or a representative office. Healy Consultants will advise you regarding the best legal entity for setting up your business in Mozambique.
Is it possible to register a 100% foreign-owned company in Mozambique?Yes, most industries in Mozambique are open to foreign investment without the need for a local partner.