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RR RUEHWEB

DE RUEHTO #0104/01 0351232
ZNR UUUUU ZZH
R 041232Z FEB 10
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 1236
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0608
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MAPUTO 000104 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ETRD OPIC KTDB ECON MZ
SUBJECT: MOZAMBIQUE 2010 INVESTOR CLIMATE STATEMENT 
 
----------------------------- 
Openness to Foreign Investment 
------------------------------ 
 
¶1.  Mozambique encourages foreign direct investment.  CPI, 
the government's Investment Promotion Center, seeks to bring 
investors to Mozambique and should be an investor's primary 
contact with the government.  CPI is particularly interested 
in increasing investment in the central and northern regions 
of the country in order to address large regional development 
imbalances. 
Contact information for the Investment Promotion Center 
(CPI) is as follows: 
Investment Promotion Center (CPI) 
Rua da Imprensa, 332 (ground Floor) 
Caixa Postal 4635, Maputo 
Tel: (258) (21) 313310/75 or (21) 313295/99 
Fax: (258) (21) 313325 
E-mail: cpi"at"cpi.co.mz 
Internet: www.cpi.co.mz 
¶2.  Mozambique's Law on Investment, No. 3/93, dated June 24, 
1993, and its related regulations govern foreign investment. 
Additional amendments were passed on July 21, 1993, Decree 
No. 14/93, and on August 8, 1995, Decree No. 36/95.  The law 
and amendments generally do not make distinctions based upon 
investor origin, nor do they limit foreign ownership or 
control of companies.  The lengthy registration procedures 
can be problematic for any investor -- national or foreign -- 
but those unfamiliar with Mozambique and the Portuguese 
language face greater challenges.  Working with a local 
consulting firm or partner familiar with the requirements 
will facilitate the registration process.  CPI assists both 
local and foreign investors in obtaining licenses and 
permits.  However, in general, large investors receive much 
more support from the government in the business registration 
process than small and medium-sized investors. 
¶3.  Government authorities must approve all foreign and 
domestic investment requiring guaranties and incentives 
provided by the Investment Law and its regulations. 
Currently CPI handles the approval process for both foreign 
and domestic investors.  The final approval is granted by the 
following government entities: 1) The Provincial Governor for 
domestic investment up to USD 100,000; 2) The Minister of 
Planning and Development for domestic investment exceeding 
USD 100,000 and foreign investment up to USD 100 million; and 
3) The Council of Ministers for any investment project 
exceeding USD 100 million and those involving large tracts of 
land (5,000 hectares for agricultural investment and 10,000 
hectares for livestock and forestry projects.  The minimum 
investment threshold for tax and import incentives is USD 
50,000. 
¶4.  The World Bank's "Doing Business in 2010" report 
indicates that entrepreneurs can expect to go through at 
least 10 identifiable steps to launch a business that 
according to the World Bank lasts, on average, 26 days. 
Overall, the ease of starting a business in Mozambique is 
ranked at 96 out of 183 countries, up from 143 in 2009. This 
improvement is due to the elimination of minimum capital 
requirements to start a business and reforms to trading 
across borders. 
¶5.  To date Mozambique's privatization program has been 
relatively transparent, with open and competitive tendering 
procedures in which both foreign and domestic investors have 
participated.  Most remaining parastatals are in public 
utilities, making their privatization more politically 
sensitive.  While the government has indicated an intention 
to take on partners in most of these utility industries, 
progress on privatization has been slow.  The Millennium 
Challenge Corporation maintains a list of indicators in the 
areas of Ruling Justly, Investing in People, and Economic 
Freedom, which can be found at 
http://www.mcc.gov/mcc/bm.doc/score-fy10-moza mbique.pdf 
-------------------------------- 
Conversion and Transfer Policies 
-------------------------------- 
 
¶6.  Currency is freely convertible at banks and exchange 
houses.  Foreign exchange retention accounts are permitted 
for 100 percent of foreign exchange earnings without formal 
justification.  These may be used to purchase imports. 
Investment registration and repatriation procedures must be 
followed to repay foreign loans and for the repatriation of 
invested capital, profits and dividends.  Delays are uncommon 
beyond those typical for administrative processing in a 
developing country. 
------------------------------ 
Expropriation and Compensation 
------------------------------ 
 
¶7.  Private property was nationalized throughout Mozambique 
in 1975 following independence from Portuguese colonial rule. 
 After Mozambique's turn away from socialism in the 1980s, 
citizens had a period of time to reclaim residential 
property.  The government retained commercial property, but 
later sold it off as part of its privatization efforts.  All 
but a handful of religious properties that were nationalized 
have been returned; negotiations are ongoing for the 
remaining few.  It is worth noting, however, that there is no 
private ownership of land in Mozambique; all land is owned by 
the state. 
¶8.  While there have been no significant cases of 
nationalization since the adoption of the 1990 Constitution, 
Mozambican law holds that "when deemed absolutely necessary 
for weighty reasons of national interest or public health and 
order, the nationalization or expropriation of goods and 
rights shall (result in the owner being) entitled to just and 
equitable compensation." 
------------------ 
Dispute Settlement 
------------------ 
 
¶9.  In December 2005 the National Assembly approved major 
revisions to the commercial code - the result of a 
collaborative effort starting in 1998 between the Mozambican 
government, the private sector and donors.  The previous 
commercial code was from the colonial period, with clauses 
dating back to the 19th century, and did not provide an 
effective basis for modern commerce or resolution of 
commercial disputes.  The revised code is generally viewed as 
a very positive development.  The new Commercial Code went 
into effect July 1, 2006. 
¶10.  To date the judicial system has been largely ineffective 
in resolving commercial disputes. Instead most disputes among 
Mozambican parties are either settled privately or not at 
all.  Pro-worker regulations mean that "hiring and firing" of 
workers is exceedingly difficult in Mozambique. 
¶11.  In February 1999, the National Assembly legally 
recognized Alternative Dispute Resolution, which provides for 
foreign investors to have access to arbitration.  The Center 
for Commercial Arbitration, Conciliation and Mediation 
(CACM), which is supported by USAID, offers commercial 
arbitration.  CACM has two locations - one in Maputo and a 
second in the central city of Beira. CACM does not, however, 
deal directly with labor issues.  From 2009, CACM will also 
do labor issues mediation and arbitration.  For disputes 
between international and domestic companies, the law closely 
follows UNCITRAL, the United Nations Commission of 
International Trade Law.  For domestic arbitration, the law 
is formulated to cover a wide range of potential disputes, 
including non-commercial issues.  In 2009, a government 
decree authorized labor disputes to be mediated by CACM. 
Mozambique acceded in mid-1998 to the New York Convention on 
the Recognition and Enforcement of Foreign Arbitral Awards. 
For disputes between American and Mozambican companies where 
a violation of the nations' Bilateral Investment Treaty (BIT) 
is alleged, recourse via international ADR under the BIT may 
also be available.  Investors who feel they have a dispute 
covered under the BIT should contact the US Embassy Economic 
Section. 
--------------------------------------- 
Performance Requirements and Incentives 
--------------------------------------- 
 
¶12.  Mozambique is generally in compliance with WTO 
Trade-Related Investment Measures (TRIM) obligations.  A 
variety of tax incentives exist to encourage direct foreign 
investment, which vary according to the region of the country 
and the nature of the investment but often include a 50 to 80 
percent reduction in taxes.  After the end of the period of 
tax reductions, additional benefits, which vary according to 
the location of the investment, are available.  For example, 
investment in new or rehabilitated projects benefit from a 
50% reduction in Corporate Tax Rates during the period 
necessary for recovering the investment, which may not exceed 
10 years.  For investments in the provinces of Niassa, Cabo 
Delgado, and Tete, the reduction is 80% of the normal rates. 
After the end of the period of tax reductions, additional 
benefits, which vary according to the location of the 
investment, are granted.  Special tax benefits are granted to 
investors for the rehabilitation or expansion of operating 
projects.  For a five-year period, an immediate 100% 
write-off is allowed for investments in new equipment and in 
the construction of civil installations and agricultural 
infrastructure.  Customs exemptions are possible for the 
importation of capital equipment and raw materials.  To 
qualify, a minimum investment of USD 50,000 and pre-approval 
from CPI are required.  However, a handling fee of 1% is 
charged on all goods, irrespective of the goods being exempt 
from the payment of any import duties of the duty applicable 
to 0% goods.  The government grants special fiscal, labor and 
immigration arrangements to companies operating in designated 
Rapid Development Zones.  Rapid Development Zones include the 
whole of Niassa Province, Nacala District, Ilha de 
Mocambique, Ibo Island and the Zambezi river valley. 
Investments in these zones are exempt from import duties on 
certain goods, from real property transfer tax and are 
granted an investment tax credit equal to 20% of the total 
investment (with a right to carry forward for five years). 
There are also incentives for companies in industrial free 
zones. 
¶13.  Specific performance requirements are built into mining 
concessions and management contracts, and sometimes into the 
sale contracts of privatized entities.  Investments involving 
partnerships with the government usually include milestones 
that must be met for the investor's project to continue. 
¶14.  In August 2009, Decree 43/2009 created Gazeda, the 
Special Economic Zones Office.  Both Gazeda and CPI support 
and assist investors, however Gazeda focuses its activities 
on the Beluluane Industrial Free Zone in Maputo Province and 
the Nacala Special Economic Zone, in Nampula Province.  The 
two zones allow exemptions from customs duties and value 
added taxes on imports of equipments and raw materials for 
use within the zones. 
¶15.  Note: The process of obtaining a visa and related work 
permits for foreign workers in Mozambique is lengthy and 
overly bureaucratic. The Ministry of Labor must approve the 
employment of foreigners.  The Ministry of Interior's 
immigration department issues a DIRE (a work 
permit/identification card) once the Ministry approves the 
application.  Assistance through a local lawyer, consulting 
firm or an individual familiar with the process will 
facilitate obtaining necessary work permits.  In 2009, the 
Ministry of Labor began enforcing a quota system which 
requires the number of foreign employees to be no larger than 
10 percent of a company's workforce, depending on the overall 
size of the company.  Foreign nationals found that the 
bureaucratic process and documentary requirements inherent in 
requesting or renewing work authorizations through the 
Ministry of Labor were exceedingly difficult.  Some 
investments, covered under separate "mega-project" agreements 
are exempted from these quotas; however, in some cases the 
Ministry of Labor arbitrarily required the same companies to 
comply with foreigner quota regulations. 
-------------------------------------------- 
Right to Private Ownership and Establishment 
-------------------------------------------- 
 
¶16.  The legal system recognizes and protects property rights 
to building and movable property. Private ownership of land, 
however, is not allowed in Mozambique.  Instead the 
government grants land-use concessions for periods of up to 
50 years, with options to renew.  The government at times has 
granted overlapping land concessions.  Essentially, land-use 
concessions serve as proxies for land titles; however, they 
are not allowed to be used as collateral. Land surveys are 
being carried out throughout the country to enable 
individuals to register their land concessions.  This process 
is moving slowly and will not provide any real legal 
protection to investors for some time to come.  The 
Mozambican banking community uses property other than land, 
such as cars and private houses, as collateral.  Investors 
should be aware of the requirement to obtain endorsement of 
their projects in terms of land use and allocation at a local 
level from the affected communities. 
----------------------------- 
Protection of Property Rights 
----------------------------- 
 
¶17.  The inefficient nature of the Mozambican judicial system 
makes protection of property rights extremely problematic. 
Pirated copies of audio, videotapes, DVDs and other goods are 
sold in Mozambique. 
¶18.  The National Assembly passed a copyright and related 
rights bill in 2000. This bill, combined with the 1999 
Industrial Property Act, brought Mozambique into compliance 
with the WTO agreement on the Trade Related Aspects of 
Intellectual Property Rights (TRIPS).  The law guarantees the 
security and legal protection of industrial property rights, 
copyrights and other related rights.  In addition, Mozambique 
is a signatory to the Bern Convention on International 
Property Rights, as well as the New York and Paris 
conventions. 
¶19.  Over the last four years private sector organizations 
have been working together with various government entities 
on an IPR task force team in an effort to combat intellectual 
property right infringement and related public safety issues. 
 The task force has successfully acted on IPR infringement 
issues, highlighting a successful private/public partnership. 
------------------------------------- 
Transparency of the Regulatory System 
------------------------------------- 
 
¶20.  Investors face a myriad of requirements for permits, 
approvals and clearances, all of which take a significant 
amount of time and effort to obtain.  The difficulty of 
navigating the system creates space for corruption, and 
bribes are often requested to facilitate transactions. 
¶21.  Regulations in the areas of labor, health and safety and 
the environment are routinely not enforced, or are enforced 
randomly to generate revenue from fines.  In addition, civil 
servants have at times threatened to enforce antiquated 
regulations that remain on the books to obtain favors or 
bribes. 
¶22.  The government is aware of the problems and has launched 
a donor-funded effort to streamline procedures.  The new 
Commercial Code that went into effect July 1, 2006, is seen 
as a step forward in combating many of these issues. 
¶23.  Changes to laws and regulations are published in the 
National Bulletin.  Public comments to proposed new laws and 
regulations are usually limited and input may come from a few 
private sector associations, such as CTA.  CTA is the 
organization that officially represents the interests of a 
wide number of private sector business associations. 
--------------------------------------------- ----- 
Efficient Capital Markets and Portfolio Investment 
--------------------------------------------- ----- 
 
¶24.  Mozambique has a small capital market of fourteen 
commercial banks, of which four dominate the market.  The 
banks compete for important clients and deposits.  Access to 
credit for the private sector remains difficult and expensive 
-- interest rates for commercial loans are generally around 
22 percent per year.  Housing loans are around 15 percent per 
year.  Access to capital in the rural areas is constrained by 
the fact that land leases cannot serve as collateral. 
Various entities, such as the Aga Khan Foundation, Banco 
Opportunidade and Novo Banco, offer micro-credit financing 
programs to partially fill this need. 
¶26.  The Mozambican Stock Exchange, founded in October 1999, 
was started with less than USD 5 million in capitalization. 
Although a fundamental instrument for the raising of finance 
by companies, to date the exchange's principal listing is 
Cervejas de Mocambique.  The capital base requirement for 
listing is USD 1.5 million. 
---------------------------------------- 
Competition from State Owned Enterprises 
---------------------------------------- 
 
¶27.  Current state owned enterprises have their origin in the 
socialist period directly following Mozambique's independence 
in 1975.  State owned enterprises are divided into two 
groups, those wholly owned by the state and those partially 
owned by the state.  Each enterprise is subordinate to a 
specific ministry.  There are a variety of state owned 
enterprises that compete with the private sector.  The 
state-owned company, Telecomunicacoes de Mocambique (TDM), 
Aeroportos de Mocambique (ADM), Electricidade de Mocambique 
(EDM) and Portos e Caminhos de Ferro de Mocambique (CFM) have 
a monopolies on certain industries.  Some of these state-run 
enterprises benefit from state subsidies.  The state is 
actively involved in the operations of some of these 
enterprises. 
------------------------------------- 
Corporate Social Responsibility (CSR) 
------------------------------------- 
 
¶28.  Larger companies and foreign investors are aware of 
corporate social responsibility (CSR). Companies practicing 
CSR tend to set their own standards.  As part of some large 
investment projects, CSR related issues are negotiated 
directly with the government according to local necessities. 
For example, some foreign investors are required to relocate 
populations, build houses, schools and health centers for 
those displaced by their economic activities. 
------------------ 
Political Violence 
------------------ 
 
¶29.  The triple elections --- presidential, legislative and 
provincial --- conducted on October 28 occured with only few 
incidents of localized violence.  International electoral 
observers noted that undue influence exercised by the ruling 
FRELIMO party resulted in an "unlevel playing field." 
Supporters of the opposition party RENAMO complained of 
intimidation and arbitrary arrests.  Newly formed opposition 
party MDM was excluded, many say unfairly, from most 
legislative contests.  RENAMO issued complaints of election 
fraud to several agencies.  Nonetheless, and despite some 
blustering, principally from RENAMO leader Afonso Dhlakama, 
no violence has ensued. 
¶30.  Labor unions lack the financial and institutional 
capacity to muster effective, coordinated efforts among their 
members.  Protests, when they do occur, rarely turn violent. 
There have been work stoppages, usually as a result of 
failure to receive salary owed.  As in many capital cities, 
crime is problematic in Maputo, where carjackings, muggings 
and armed home break-ins do occur.  An overanxious police 
force sometimes responds with inappropriate shows of force, 
lacking the sophistication of resorting to violence only as a 
last resort.  In several instances, the police themselves 
have been targeted for assassination by organized crime. 
While acts of violence are not unknown in Mozambique, they 
have not reached the same scale or frequency as in 
neighboring South Africa. 
---------- 
Corruption 
---------- 
 
¶31.  Mozambique slipped to 130 out of 180 countries ranked on 
Transparency International's (TI) 2009 Corruption Perceptions 
Index (CPI), down from 111th place in 2007, indicating that 
corruption in the country is "rampant." 
¶32.  The police continued to be poorly paid and due to low 
wages and poor conditions, some police members tipped off 
criminals to police operations.  Corruption and extortion by 
police are widespread, and impunity remains a serious problem. 
¶33.  Senior officials often have conflicts of interest 
between their public roles and their private business 
interests.  Bribery is considered a criminal offense in 
Mozambique, and political declarations have been repeatedly 
issued denouncing corrupt practices and promising actions 
against the guilty.  Despite this, such actions have been 
extremely slow in coming, with high-profile arrests of 
current and former senior government officials on corruption 
charges beginning in 2008.  48 of 49 corruption charges 
against Former Interior Minister Almerino Manhenje were 
thrown out in 2009 however. 
¶34.  Over the past several years the United States has been 
one of the lead donor countries in providing assistance to 
the government to fight corruption.  With US resources, the 
government set up an Anti-Corruption Unit in the Office of 
the Attorney General (renamed in 2005 the Central Office for 
the Combat of Corruption).  This body is charged with 
investigating and prosecuting corruption-related crimes. 
¶35.  In 2005 the government passed Decree 22/2005, which 
created provincial-level offices to combat corruption. 
Offices were opened in Beira and Nampula, and are in 
operation.  In 2006 documents authorizing the creation of two 
additional offices in Inhambane and Zambezia provinces, 
respectively, were submitted; offices will be opened once the 
Council of Ministers publishes its approval decree. 
¶36.  The National Assembly passed an anti-corruption bill in 
2004 that updated previous antiquated legislation. Civil 
society (particularly the media and a few dedicated NGOs) has 
remained vocal on corruption-related issues, with some 
support from the US government.  One NGO, the Center for 
Public Integrity, continues to be active in pressuring the 
government to act against corrupt practices. 
¶37.  Mozambique is a signatory to the United Nations 
Convention Against Corruption. 
------------------------------- 
Bilateral Investment Agreements 
------------------------------- 
 
¶38.  In December 1998 Mozambique negotiated a Bilateral 
Investment Treaty (BIT) with the United States.  The U.S. 
Senate ratified the treaty in November 2000, followed by the 
Mozambican Council of Ministers in December 2004.  The 
US-Mozambique BIT came into effect on March 3, 2005.  In June 
2005 the US and Mozambique signed a Trade and Investment 
Framework Agreement (TIFA) that established a Trade and 
Investment Council to discuss bilateral and multilateral 
trade and investment issues.  The Council held its first 
meeting in October of 2006, meeting most recently in 2009. 
OPIC signed an agreement with Mozambique in 1999, later 
ratified in 2000. 
¶39.  Mozambique has also signed bilateral investment 
agreements with the following nations Algeria, Belgium, 
China, Cuba, Denmark, Egypt, Finland, France, Germany, 
Indonesia, Italy, Mauritius, The Netherlands, Portugal, South 
Africa, Sweden, Switzerland, The United Kingdom, and 
Zimbabwe.  Double Taxation Treaties have been agreed with 
Portugal, Mauritius, Italy, and the United Arab Emirates. 
¶40.  South Africa is Mozambique's biggest trading partner. 
Since 1995 Mozambique has engaged in regular discussions with 
South Africa to harmonize trade regulations and facilitate 
cross-border trade and investment.  Other countries with 
significant investment in Mozambique include the United 
Kingdom, India, China and Portugal.  The United States is a 
relatively minor trading partner, but continues to be a 
substantial source of FDI. 
-------------------------------------------- 
OPIC and Other Investment Insurance Programs 
-------------------------------------------- 
 
¶41.  The Overseas Private Investment Corporation (OPIC) is an 
independent U.S. government agency that can assist with 
project finance, through loans or loan guaranties, and 
political risk insurance in Mozambique, up to a total of USD 
400 million for projects with U.S. involvement. 
¶42.  Mozambique is a member of the Multilateral Investment 
Guarantee Agency (MIGA), part of the World Bank Group. 
----- 
Labor 
----- 
 
¶43.  The estimated work force is approximately 9.6 million, 
out of a total population of 21 million.  However, only 
approximately 16.4% are in salaried positions.  In 2008 the 
government increased the country's minimum wage by 20% in the 
industry and services sectors and by 26% in the agriculture 
sector, making the new minimum wage for industry and services 
approximately USD 89 a month and the minimum wage for 
agricultural workers approximately USD 54 a month.  These 
increases were slightly above reported inflation.  This 
minimum wage applies only to those working in the formal 
sector; those working in the informal sector may earn 
significantly less.  Many people work several jobs to earn a 
sufficient income and often grow corn and vegetables on a 
small plot of land for personal consumption.  Approximately 
80% of the labor force works in agriculture, 6% in industry 
and 13% in services.  Current estimates place nationwide 
adult literacy levels at under 50%, with most of the literate 
Mozambicans living in urban centers. 
¶44.  Although the contracting of Mozambican workers is 
unrestricted, contracting of foreign workers by national or 
foreign entities, including administrators and 
representatives of foreign companies, is subject to the 
authorization of the Ministry of Labor.  Foreign workers must 
possess professional qualifications and may only be 
contracted where there are no Mozambicans with such 
qualifications or their number is insufficient.  All 
investments must specify in the investment project proposal 
the number and category of Mozambican and foreign workers to 
be employed. 
¶45.  The establishment of wages and other forms of 
compensation to be paid to the employee are not subject to 
control.  However, the labor legislation provides for a 
minimum wage of USD 50 to 90 per month depending on the 
industry sector.  Employers are obliged by law to pay a 
social security tax assessed at 7% of the employees' wages. 
A maximum of 3% of this is deductible from the employee's 
salary, while the remaining 4% is met by the employer. 
Foreign resident workers may be exempt if they can 
demonstrate participation in an alternate social security 
scheme. 
¶46.  Labor unions created during the socialist years of the 
1970s and 1980s remain weak and are disengaging themselves 
from the ruling party, FRELIMO.  Total membership among 
Mozambique's fourteen unions is close to 200,000 persons. 
Labor unions are exerting pressure on the government to 
maintain extremely pro-worker provisions in labor 
legislation, although they are showing flexibility on major 
issues.  The minimum wage, decided every year, remains a 
major concern for the unions.  Potential investors should be 
aware that severance payments and other benefits can be 
costly.  Despite the introduction of a new labor law in 2007, 
the labor market remains rigid and an impediment to business. 
¶47.  Mozambique is a signatory to the International Core 
Labor Standards. 
-------------------------------------- 
Foreign Trade Zones / Free Trade Zones 
-------------------------------------- 
 
¶48.  The government issued Decree No. 61/99 on September 21, 
1999, establishing industrial free zones (export processing 
zones).  The decree set up an Industrial Free Zone Council, 
which approves companies as industrial free zone enterprises, 
thereby providing them customs and tax exemptions and 
benefits.  There are three essential requirements for 
Industrial Free Zone status: job creation for Mozambican 
nationals, the exportation of at least 85% of annual 
production, and a minimum investment of USD 50,000.  The 
decision to grant Industrial Free Zone status lies with the 
Mozambican Council of Ministers and is conditional on the 
proposal creating 500 permanent positions for Mozambican 
employees, of which each company operating with the 
Industrial Free Zone must employ at least 20 of these 
employees.  Almost all industries, with the exception of 
prospecting and exploration of natural resources, processing 
of raw cashew nuts and national seafood, including prawns, 
can be authorized under an Industrial Free Zone status. 
¶49.  Industrial Free Zone developers enjoy an exemption from 
customs duties, VAT and tax on the importation of 
construction materials, machinery, equipment, accessories, 
accompanying spare parts and other goods destined for the 
establishment and operation of the Industrial Free Zone. 
¶50.  Free zone concessions are granted for a renewable period 
of 50 years.  Mozambique's large export-oriented investment 
projects of recent years, such as MOZAL and SASOL, operate as 
industrial free zones.  There is no requirement for free zone 
companies to be located at specific sites. 
¶51.  In addition, Special Economic Zones can be established 
on a case-by-case basis with the objective of developing 
specific geographical areas that benefit from exemption from 
custom duties and taxes, a free "off-shore" type foreign 
exchange regime and special labor and immigration regimes.  A 
special tax and custom regime has been created for the 
Zambezi Valley until 2025. 
------------------------------------------ 
Foreign Direct Investment (FDI) Statistics 
------------------------------------------ 
 
¶52.  Historical Data: The government established the 
Investment Promotion Center (CPI) in 1985. From January 1, 
1990 through December 31, 2009 CPI approved a total of 3,297 
projects (both foreign and national).  CPI reported over USD 
8 billion in FDI was approved for 861 projects in 2009. 
¶53.  From 2005 to 2009 the largest projected FDI investor was 
the United States with over USD 5 billion in 15 approved 
projects.  The second largest was Portugal with almost USD 
800 million in 127 projects.  The third largest was Norway 
with USD 742 million in 2 projects, the fourth largest was 
South Africa with USD 424 million in 318 projects.  China was 
the fifth largest FDI investor with USD 175 million in 41 
projects. 
¶54.  Many of these approved projects turned out to be smaller 
than planned or not implemented, however, while other 
projects are not reported to CPI at all.  For these reasons, 
approved projects do not represent the actual FDI for any 
given year. 
ROWE