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Why Invest in Mozambique? Approved Private Investment Bilateral Investment Treaties Investment Guarantees & Incentives

5. Tailor Made Incentives per sector

Why Investing in Mozambique? Global Peace Index (GPI) 2010 Ranking: Mozambique 3rd most stable country in Africa, & 47th more stable in the world; The Economist Intelligence Unit 2011, Ranks Mozambique: “7th Fast-Growing Economy: 7.5% Average GDP growth (2000-2010);

Strategic Location: The long coastline of over 2,700 Km, combined with the development corridors, ports, airports, railways, roads and pipelines, facilitates access for the hinterland countries (SADC); Diversified Natural Resources: Large tracts of arable land, forests, natural reserves of mineral resources, coal, gas, oil, gold, water, diversity and historical and cultural heritage; Key Transport infrastructures ,Ports and “Development Corridors” serving landlocked neighboring states;

Why Invest in Mozambique? Vast Market: Domestic market of 22 million inhabitants and the SADC regional market of more than 250 million consumers. Development Corridors: The Maputo, Beira , Sena and Nacala regional transport/ development corridors offer excellent investment opportunities; New Investments in Infrastructures: Development facilities;

and

operation

Incremental investments;

Power

Telecom investments.

of

Generation

new/rehabilitated and

port

Transmission

Approved Private Investment (2005-2010)

2008 Total Value (US$ Million) Total Number of projects Total Number of Jobs

2009

2010

2011

1,080

5,748

3,090

2 ,853

195

250

234

261

19.995

26.758

28.245

33.871

TOP-10 INVESTORS IN MOZAMBIQUE 2010

2009

Rank

2011

1

Portugal

Portugal

China

2

Norway

South Africa

South Africa

3

South Africa

Italy

Portugal

4

China

Belgium

Mauritius

5

Italy

China

USA

6

Mauritius

Spain

United Kingdom

7

India

United Kingdom

United Arab Emirates

8

United Kingdom

Singapore

Norway

9

Belgium

Kenya

Australia

10

Spain

Switzerland

India

Bilateral Investment Treaties

Investment Promotion and Reciprocal Protection Agreements: South Africa, Germany, Algeria, Belgium, China, Cuba, Denmark, Egypt, USA,

USA (OPIC), Finland, France, Indonesia, Italy, Mauritius, Netherlands, Portugal, Sweden, United Kingdom, Vietnam, India, Switzerland and Zimbabwe.

Agreements to prevent Double Taxation and Fiscal Evasion: Portugal, Mauritius, United Arab Emirates, the Autonomous and

Special Administrative Region of Macau, South Africa and India.

Investment Guarantees

Security and protection of property rights No restrictions on external loans and loan repayment External remittance of dividends Liberalized banking and exchange rates Arbitration by ICC or ICSID for dispute resolution Risk cover services by MIGA and OPIC

General Incentives

Exemption from payment of customs duties and VAT on the import of equipment classified as class “K” in the Customs Tariff Schedule including the accompanying spare and accessory parts Tax Credit Maputo City Other Provinces

5% 10%

Accelerated depreciation Legal rates + 50% Professional training deducted from taxable income Other incentives

Tailor Made Incentives by Sector

Creation of basic infrastructures Trade and Industry in the Rural Areas Manufacturing and Assembly Industry Agriculture and Fisheries Hotels and Tourism Science and Technology Parks Large Scale Projects Rapid Development Zones Industrial Free Zones Economic Special Zones

Investment Incentives Specific Incentives Creation of basic infrastructures Trade and Industry in the Rural Areas Manufacturing and Assembly Industry Agriculture and Fisheries Hotels and Tourism Science and Technology Parks Large Scale Projects Rapid Development Zones Industrial Free Zones Economic Special Zones

• Exemption of payment of customs duties and VAT in the importation of equipment classified in class “K” of the Customs Schedule and respective spare parts;

• IRPC Incentives: a) 80% reduction of the Corporate Tax in the first 5 fiscal exercises; b) 60% reduction of this tax, from 6th to the 10th fiscal exercise; c) 25% redution of the tax, from the 11th to the 15th fiscal exercise.


• Exemption of payment of customs duties and VAT in the importation of equipment classified in class “K” of the Customs Schedule as well as other items indispensible for the activities: a) Refrigeration equipment; b) Scales; c) Weights; d) Tills; e) Fuel Oils and Oil mesuring instruments ; f) Counters;


•Applicable to investments in the manufacturing and assembly industry (vehicles, electronic equipment , information and communication technologies and others), that benefit from exemption of payment of customs duties in the importation of raw materials for industrial production purposes.

Investment Incentives Specific Benefits Creation of basic infrastructures Trade and Industry in the Rural Areas Manufacturing and Assembly Industry Agriculture and Fisheries Hotels and Tourism Science and Technology Parks Large Scale Projects Rapid Development Zones Industrial Free Zones Economic Special Zones

•Exemption of payment of customs duties and VAT in the importation of equipment classified in class “K” of the Customs Schedule and respective spare parts;; • Corporate tax (IRPC) incentives: a) Up to 31 December 2015, 80% reduction b) From 2016 to 2025, a 50% reduction.


• Exemption of payment of customs duties and VAT in the importation of equipment classified in class “K” of the Customs Schedule as well as on goods considered indispensible for the activity foreseen in the quantities strictly necessary for construction and equipping.


• Investments in the area of scientific research and development of information and communication technologies as well as development research, benefit during the project’s implementation of customs duties and VAT in the importation of scientific materials and equipment, machinery, equipment and respective spare parts; •IRPC incentives: a) Corporate Tax exemption in the first 5 fiscal exercises; b) 50% tax reduction from 6th to the 10th fiscal year; c) 25% redution of the tax, from the 11th to the 15th fiscal exercise.


•Applicable to investments authorized that exceed the equivalent of (12.500.000 MT), as well as investments in infrastructures of public nature built under the concession regime; •Exemption from customs duties and VAT in the importation of construction materials, machinery, accompanying spare parts and other goods for the activity.


•Exemption of payment of customs duties and VAT in the importation of goods classified in class “K” and respective accompanying spare parts; • During 5 fiscal exercises, the projects in these zones benefit from an investment fiscal credit of 20% of the total investment.


•Exemption from customs duties in the importation of construction materials, machinery, equipment, accompanying spare parts and other goods for the activity licensed in IFZ; •IRPC Incentives:

a) Corporate Tax exemption for the first 10 fiscal exercises; b) 50% reduction of this tax, from 11th to the 15th fiscal exercise; c) 25% redution of the tax, for the remaining life of the project.


• Exemption from customs duties in the importation of construction materials, machinery, equipment, accompanying spare parts and other goods for the activity licensed in SEZ; •IRPC Incentives: a) Exemption in the first 5 fiscal exercises; b) 50% reduction from 6th to the 10th fiscal exercises; c) 25% reduction from the 11th year for the remaining project’s life.

Business Opportunities in Mining

Areas for Mining Exploration & Investment • • • • • • • • • • • • • • •

Gas, Coal; Oil; Gold; Heavy Mineral sands Base Metals Graphite Pegmatite's Ornamental Stones Diamond Exploration Gold; Bauxite; Marble; Carbonates Industrial Minerals

Centro de Promoção de Investimentos

Coal

Prospects

Mozambique is considered as being among the countries in the world with largest resources of coal, in particular of high quality coking coal;

Current activities underway: about 100 exploration licenses It is expected that at least 3 license holders will soon submit proposals for new Mining Concessions;

The building of Infrastructures for the transportation of coal (railways, possibly barge river transport, port facilities) constitute one of the main challenges; There are resources and export market for Mozambique to become one of the main export countries in the world.

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Mining Concessions Coal Projects under develo Moatize Project (Vale) 26 million tons/yr, starting in 2011. Coking coal, steam coal and power generation (2.400MW). Mining investment: US$1.320 million

Benga Project (Riversdale) 20 million tons/yr, starting in 2011 Coking coal, steam coal and power generation (2.000MW). Mining Investment: US$ 850 million Changara Project (JSPL) 2,0 million tons/yr of coking coal and steam coal, starting in 2013.

Petroleum and Gas Prospects A significant increase in exploration activities took

place during the past few years; There are 1,000 mining titles granted to national and foreign entities. Number of petroleum contracts: 12 There are good market opportunities in Mozambique

for the provision of services to the companies carrying out exploration and development activities; The partnership between nationals and foreign entities for the establishment of services companies is encouraged.

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PETROL AND NATURAL GAS Mozambique Sedimentary Basins

Gaz field Sofala and Inhambane Pande 1 - 1961 Buzi 1962

-

•

One third of continental territory is under sedimentary basin.

•

Six sedimentary basins can be identifyed: – Rovuma basin

Temane 2 - 1967 Inhassoro - 2003

– Maniamba basin – Lower Zambeze Basin – Midle Zambeze Basin – Lake Niassa basin

GAS PRODUCTION FIELD OF PANDE/TEMANE (SASOL, ENH/CMH & IFC)

Pande

Temane

-27-

CURRENT CONCESSIONS MOZAMBIQUE BASIN (7)

Concessions

Companies

Pande/Temane Sasol & ENH EP 16 & 19

Sasol, Petronas & ENH EP

Inhaminga

DNO, Harmattan, New Age

Sofala

Sasol & ENH EP

M-10

Sasol , Petronas & ENH EP

Búzi

PT Kalila & ENH EP

Area A

Sasol , ENH EP -28-

CURRENT CONCESSIONS

ROVUMA BASIN (5)

Concessions

Companies

Onshore

Anadarko-, Artumas, Maurel & Prom , ENH EP & Cove Energy

Offshore Area 1

Anadarko, Mitsui, ENH EP, BPRL Videocon & Cove Energy

Offshore Area 4

ENI , ENH EP, KOGAS & Galp Energia

Offshore Area 2&5

Statoil & ENH EP

Offshore Area 3&6

Petronas & ENH EP -29-

Other Potential Mining Areas Niassa Province: (Diamonds, Base Metal, etc.) Lago district; Mavago district Manica Province: (Gold & Other Minerals) Zambezia Province: (Nepheline Syenite) Milange District; and Murrumbala District

www.cpi.co.mz

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