NEWS

O sócio fundador da MC&A, Vítor Marques da Cruz, é um dos convidados de dois seminários promovidos pelas sociedades chineses Brandt Chan & Partners e Dacheng Law Offices. Os encontros realizam-se nos escritórios destas firmas, em Hong Kong e Xangai, nos dias 8 e 10 de outubro, respetivamente. O advogado português irá esclarecer os presentes sobre questões jurídicas do mercado angolano, moçambicano e português.

Vítor Marques da Cruz irá incidir sobre a área da energia em Angola e Moçambique e a privatização de empresas em Portugal.

“As apresentações serão particularmente centradas em aspetos relacionados com os mercados angolanos e moçambicano nas áreas da energia, nomeadamente no que respeita à exploração de petróleo, gás e outros recursos naturais, pois são estas as áreas que mais interessam às grandes empresas chinesas”, esclarece Vítor Marques da Cruz. “O objetivo passa por transmitir uma perspetiva geral sobre o regime jurídico aplicável a estas áreas e dar a conhecer eventuais oportunidades de negócio aos investidores”, acrescenta o líder da MC&A.

Para além da análise sobre a especificidade jurídica dos mercados angolano e moçambicano, estará também em destaque a privatização de empresas portuguesas. Neste contexto, será feita a apresentação de empresas em fase de privatização, com a análise das condições das respetivas privatizações e do regime legal.

A MC&A partilha com a Brandt Chan & Partners e Dacheng Law Offices a ligação à SNR Denton e à First Law international, respectivamente, o que lhes possibilita um intercâmbio permanente com todos os escritórios integrados nestas redes internacionais.

 

A experiência angolana no projecto LNG é já um case-study para vários países africanos e para quem quer investir no mercado da África Austral. “No caso de Moçambique, falta regulamentar a legislação do gás natural (LNG), e Angola é já a referência. Na verdade, com as recentes descobertas efectuadas em Moçambique, será fundamental que este país adopte legislação semelhante à angolana, para que fique regulada de forma clara toda a actividade relativa à prospecção, pesquisa, extracção e comercialização de gás natural”, garante o advogado Vítor Marques da Cruz.

O responsável pelo escritório de advogados MC&A (também em Luanda, em parceria com o escritório angolano Mota Veiga Advogados) alerta para o potencial de um “maior contributo de Angola para a estabilização legislativa dos países de língua oficial portuguesa em matéria económica, e em particular no que respeita ao investimento estrangeiro, tendo em conta o estádio mais avançado deste sector em Angola, bem como a qualidade dos seus jurístas e o seu cada vez mais sólido edifício jurídico”. O jurista português, que geriu na última década vários interesses estrangeiros em Luanda (quando liderava a área internacional da sociedade FCB), defende que “não é por acaso” que Angola tem vindo a ser escolha de muitas multinacionais para os seus investimentos, quer no sector da energia e dos recursos naturais, quer noutros sectores, como o financeiro, industrial, agrícola e de distribuição, entre outros”.

Em parceria com a SNR Denton – o escritório de juristas (norte-americano) mais influente em África e Médio Oriente e um dos 25 maiores do mundo -, Marques da Cruz defende que “Angola é um mercado fundamental para as empresas multinacionais fazerem a aprendizagem da língua e dos princípios jurídicos idênticos a outros mercados africanos de língua portuguesa, como é o caso de Moçambique”.

A MC&A foi criada por Marques da Cruz, é especializada em direito bancário e mercado de capitais e em direito da energia e actua na assessoria de negócios internacionais no eixo Brasil/Europa/África a partir das plataformas portuguesa e angolana. Este escritório tem clientes dos EUA, europeus, brasileiros e asiáticos (caso do China Development Bank, no âmbito do processo de financiamento à compra de parte da EDP pela Three Gorges) e representa interesses de multinacionais em mercados (onde actua em parceria) como Moçambique, Angola, Brasil, Cabo Verde, Guiné-Bissau e São Tomé e Príncipe, além da ligação à SNR Denton. Em Angola, alguns dos clientes são o Standard Bank, First Bank, DHL, Bechtel (LNG), Shoprite, Billion Group e Pepstore e presta apoio a vários bancos internacionais nas linhas de crédito ou empréstimos solicitados por Angola.

Vítor Marques da Cruz lançou-se no início do ano num projeto novo: criou a MC&A, uma sociedade de advogados com vocação internacional, orientada sobretudo para assessorar empresas nos mercados lusófonos. Uma estratégia que, assegura, não decorre da crise, antes foi pensada a priori. Daí que o mercado nacional não seja uma prioridade.

Leia a entrevista completa da edição de Setembro do Advocatus no link abaixo:

Internacionalização é estratégica

3 September 2012 | By Joanne Harris

Angola and Mozambique, both once riven by civil war, are now rich in natural resources and growing fast, but they still face big challenges. Lawyers are key to their reconstruction

In brief

There is enormous potential for growth and investment in Angola and Mozambique, but making a success of practising in these Portuguese-speaking African nations is no easy task for lawyers, whether domestic or international

The story of Angola and Mozambique is one of colonisation, civil war and recovery – and in the last part of that story lawyers are becoming increasingly important.

The two countries were colonised by the Portuguese in the 16th and 17th centuries and, despite their independence, the cultural legacy of centuries of colonisation live on. Most of Portugal’s corporate law firms have developed close associations with local firms in one or both countries, but the opportunities for growth in Angola and Mozambique are now being eyed by a wider range of countries. Investors from the US, UK, Brazil and China are among those looking for projects to put their money into, while the revenues generated by both countries’ rich natural resources are starting to flow outwards. Last year, Angolan companies began taking stakes in Portugal’s struggling private sector, for example.

Resourceful

The main source of work for lawyers, both local and foreign, is in energy and natural resources. All the major oil and gas companies are already present and keen to expand. The biggest deal in both countries in the past three years, according to Thomson Reuters data, was the $1.3bn (£820m) purchase of a stake in an offshore oil exploration block by Angolan state-owned company Sonangol, which completed in December 2009.

The revenues from oil are giving rise to more work. In Angola, the ruling MPLA party has invested billions of dollars in infrastructure and, ahead of elections at the end of August, pledged even more. The country was in ruins at the end of the destructive civil war that ended in 2002 and rebuilding has been crucial over the past decade.

“The market in Angola has, to a certain extent, been affected by the world financial crisis – but only to a certain extent,” explains Rui Amendoiera, managing partner at Portuguese firm Miranda Correia Amendoeira & Associados, which has a longstanding relationship with Angolan firm Fátima Freitas Advogados. “Angola is very much dependent on oil prices and these have been high in recent years.

“There’s a lot of activity going on in terms of infrastructure development. There was a big effort on the part of the government to rebuild the country. You see projects and building everywhere, mostly funded by the government with oil revenues.”

Fernando Faria de Bastos, a partner at Angolan firm FBL Advogados, says the government has been implementing a raft of legislation to improve the business environment.

“The ‘legislative boom’ goes hand in hand with rising private investment – both foreign and national – in the country, due to the fact that Angola is one of the few countries that’s been showing a systematic economic growth,” he adds.

Renata Valenti, a lawyer at Gabinete Legale Angola (GLA), says the riches of Angola have been spotted by foreign companies who are now looking for the best way of making money from the country.

“Right now, many of our clients are foreign companies incorporating or wishing to incorporate in Angola,” she says, explaining that by incorporating in Angola doing business becomes easier, particularly in ensuring profits can be shared with the global parent.

“If you’re not legally incorporated it’s impossible to send profits outside Angola,” Valenti adds.

Outside in

Investment in infrastructure is also coming from foreign sources. China Development Bank recently invested hundreds of millions of dollars in two infrastructure projects in Angola, including a $400m (£253m) credit line for the Mocamedes Railway.

This investment, say lawyers, has made a visible difference in Angola, increasing the number of schools, hospitals, roads and railways, and making getting about its 1,246,700sq km much easier.

Similar strides in infrastructure have been seen in Mozambique. The country is 10 years ahead of Angola in terms of post-civil war reconstruction, but Mozambican lawyers also report that natural resources, energy and infrastructure make up the bulk of their practices.

Mining is an area that is seeing particular growth right now.

”In many key areas of interest, with mining and oil and gas in the front row, changes to legislation are being looked at and amendments are expected to be approved in the near future,” explains Fabricia Almeida Henriques, a senior associate at SCAN Advogados & Consultores, which is allied with Portugal’s Morais Leitão Galvão Teles Soares da Silva (MLGTS).

“Recently, the government launched a public tender to award mining licences to the companies that are interested in exploring minerals of all sorts in Mozambique,” says Josina Correia, a senior associate at Gabinete Legal Moçambique (GLM).

The tender is new, but mining has been going on in Mozambique for some time. After the Block 32 deal in Angola, the next two largest M&A transactions of the past three years in these countries were the $800m deal between Australian mining company Riversdale Mining and Chinese steel giant Wuhan Iron and Steel Corporation (Wisco) in June 2010, and the July 2012 announcement by mining company Anglo American that it was buying a $555m stake in Mozambican coal mine Minas de Revuboè.

Riversdale is planning to begin production at the Zambeze coal mine in 2014, while Anglo American is looking to recoup its investment through the development of the Revuboè mine, which could produce up to nine million tonnes of coal each year.

It is this sort of opportunity that is bringing in investors from all around the world. José Manuel Caldeira, managing partner of Mozambique firm SAL & Caldeira, says the firm’s “mainly foreign” clientele has become more international in the past few years.

“There’s been a shift in the sense of a much broader array of investors and clients than the traditional three or four countries that were more linked to Mozambique,” agrees Couto Graça & Associados managing partner Pedro Couto.

So while Brazilian, Portuguese and South African companies continue to invest, China, the US and UK are now also key investment partners for both Angola and Mozambique. Cuatrecasas Gonçalves Pereira associate Nuno Furtado Mendonça, who is based in Angola at the firm’s associate office, adds that they also see a significant number of instructions from Spanish clients.

Broadening sources of work have made building international relationships key for local firms in both Angola and Mozambique. However, breaking in is tough for foreigners due to restrictions imposed by local regulators.

In both countries, foreign firms are unable to set up their own offices and must work in alliance or association with a local practice. It is slightly easier in Angola, where several firms are essentially integrated with their local partners despite remaining separate for regulatory reasons.

SNR Denton works in Angola and Mozambique through an association with MC&A, a Portuguese firm set up to provide a network of offices around the world. In Angola, explains founder Vitor Marques da Cruz, Mota Veiga Advogados operates essentially as a local office of MC&A.

“After some unsuccessful associations with local firms we created our own firm there and have Angolan lawyers – we realised that associations in Angola just don’t work,” claims Marques da Cruz.

Limited interest

In Mozambique, the interpretation of the bar association’s restrictions on foreign lawyers has given rise to heated debate.

Couto chaired the bar’s board which determined that the rules should restrict the employment of foreign lawyers by local firms. He says the official position of the bar was that foreign lawyers should not be prohibited, but restricted.

“I don’t think it should be an open market because what we see with some international firms is a ‘takeover’ approach, but to deny that we need people with experience and skills in the areas we’re heavily exposed to would be crazy,” he says. “There should be a limit, there should be rules and regulations, but it shouldn’t be prohibited.”

Caldeira is in favour of a more open market.

“That’s one of the issues that should be resolved,” he says. “We’re trying to influence reform to change this, but it’s not easy.”

Caldeira blames this on the relative immaturity of the Mozambican market.

“The situation here is that the majority of the members of the bar are single attorneys and they feel this is a type of unfair competition,” he says. “They feel that if the bar opened up they’d be left with no work or not enough work.”

He adds that along with other corporate firms, SAL & Caldeira is lobbying for the restrictions to be lifted, including writing to the attorney general’s office, and is hopeful that at some point it will be easier for firms to employ foreigners and benefit directly from their skills and experience.

Critical links

In the meantime, the alliances and associations with foreign firms in both countries are crucial for local firms. Neither country has a large pool of lawyers – estimates for both countries put the number of bar association members at around 800 – and few have the depth of experience with large cross-border transactions that can easily be found in Europe or the US.

“Lawyers tend to be general and do a bit of everything – it’s difficult to be a specialist lawyer, but we’re trying,” notes Catarina Levy Osório, a partner at Angola Legal Circle Advogados, which has an alliance with MLGTS.

“The local lawyers need to get a bit more sophisticated because the market is different now,” adds Valenti. “Most of them don’t speak any other language than Portuguese. They’re used to working with the courts and not with big firms. Partnerships between foreign firms and local law firms can help.”

She says the association between GLA and Portuguese firm PLMJ has been “profitable” both for the firm and clients.

Local firms say the benefits of their alliances with international firms are seen on several levels. Perhaps surprisingly, winning clients is not top of this list.

“Mostly, clients come to us and then we use them as a back-up resource,” says Caldeira of his firm’s alliances with SRS Abogados in Portugal and DLA Piper.

Referrals go both ways, but local firms are adamant they are not only recipients of work, but also generators.

However, they do recognise that they need the support of their international partners, not just in terms of resource on big deals but also when it comes to training and development for lawyers.

“The firms that have partnerships with law firms in other countries, such as ours in Portugal, have the support that’s required to provide services to these mega-projects,” points out Correia.

“As a firm, we learn from large firms and adopt their structures, systems and ways of working,” says Couto. “Plus we want to put our brand out there and that’s the best way to do it – piggybacking on the networks of these large firms.”

“it is quite challenging for Angolan firms to have the opportunity to work with experienced lawyers from other jurisdictions and learn how to continue to improve their performance, to bring Angolan law practice to international standards,” adds Faria de Bastos, whose firm is in an alliance with Abreu Advogados in Portugal.

”For these firms, such alliances are attractive as they allow for a growth of resources and a higher level of specialisation,” says Almeida Henriques. “From the investor’s standpoint, the possibility to resort to international firms strengthens confidence to invest in an unknown market in which practice tends to distance itself from theory.”

Just like other international ventures, African firms are aiming to present a seamless offering to their clients, despite the differences and challenges they face in their domestic markets.

“The goal is the same – to give clients the most cost-efficient service possible,” adds Marques da Cruz.

Word imperfect

One of the main challenges with the arrival of a broader range of international clients is language. Portuguese is the official language of both Mozambique and Angola, and is spoken widely, although not universally. English is much less common and many lawyers say the lack of professionals with fluent English skills is an issue. While this is not a problem for the Portuguese firms or their local partners, for other international firms looking to break in it could be.

“Language is a big barrier – very few people speak English and the language of business is Portuguese,” says Amendoeira.

Marques da Cruz agrees.

“Mozambicans are much more flexible because they’re used to having close relationships with South Africa, but when it comes to lawyers it’s difficult to find a young one who speaks English,” he says.

South Africa can generate tensions, however, says Miranda’s partner in charge of Mozambique, Diogo Xavier da Cunha.

“More African firms are trying to do work in Mozambique with minimal intervention from local firms and that’s something that really annoys Mozambique lawyers,” he says. “They have a right to be mad about it.”

Another issue affecting domestic firms is the increase in the in-house sector. Companies coming to Angola and Mozambique to invest initially brought their own lawyers from overseas, but, recognising the need for local knowledge, are now on the hunt for domestic in-housers. In-house capacity remains low, but companies are able to offer better remuneration packages and so are attracting some of the best of the new generation of lawyers.

“Companies are competing for our best people, there’s no doubt,” Couto confirms. “The number of in-house lawyers has doubled, tripled probably in recent years. Before it was a scenario whereby companies would bring their own lawyers from outside. Now we’re faced with our clients poaching our best lawyers.”

His firm has responded by trying to work closely with clients to demonstrate the advantages of using external counsel to back up what in-house departments are doing.

The general improvement in quality of work and the growth in the scale and complexity of transactions means law is becoming a more attractive career choice for young people in both countries. Although there are still too few lawyers on the market, the number seeking jobs is reportedly on the increase.

“Law’s becoming attractive,” concludes Osório.

Also on the up is the number of international firms trying to get a foothold in Angola and Mozambique. With work in energy, natural resources and infrastructure set to continue for the foreseeable future it seems likely that both countries will remain high on the target list of international clients and their lawyers, despite the challenges inherent in entering into such fast-moving markets.

 

History of Angola and Mozambique

Pre-15th century: Angola and Mozambique occupied by hunters and gatherers

1482: Portuguese arrive in the Kingdom of the Congo

1498: Vasco da Gama lands on the coast of modern-day Mozambique

1575: Portuguese colony of Angola founded

1600s: Portugal occupies Mozambique

1641: Dutch occupy Luanda, taking control from Portugal

1974: Coup d’etat in Portugal overthrows regime run by Marcelo Caetano and previously by António de Oliveira Salazar following years of guerilla warfare in the colonies

1975: Colonies including Angola and Mozambique granted independence

1990: After years of conflict Mozambique adopts constitution

October 1992: Mozambican government and rebels sign Rome General Peace Accords. UN oversees transition to elections

2002: Angolan military commanders sign ceasefire agreement after 27 years of civil war

Angola

GDP (current US$, 2011)	$101bn
Annual inflation (July 2012)	10%
Population (2012)	20.6m
Life expectancy at birth	50.7
Unemployment rate (2012)	26%

Source: World Bank

 

Mozambique

GDP (current US$, 2011)	$12.8bn
Annual inflation (July 2012)	1.5%
Population (2011)	24m
Life expectancy at birth	52
Unemployment rate (2012)	26%

Source: World Bank, Bank of Mozambique

 

Vítor Marques da Cruz and Teresa Pala highlight the legal issues 
associated with investing in Angola and Mozambique

ANGOLA

Angola is rich in natural resources, particularly diamonds, oil, gas and iron. It also has deposits of copper, manganese, phosphate, salt, mica, lead, tin, gold, silver and platinum. Unsurprisingly exports depend on its main industries of oil exploration and diamond mining, although there are some agricultural industries in the form of wood production, and fisheries. Industrial production is fuelled by five hydroelectric plants with high available levels of energy. Exports for 2010 stood at US$50.59bn, although it has a slower growth rate than Mozambique – its economy expanded 3.4% in 2011.

New law on private investment (NPIL)

A new law on private investment (NPIL) came into force on 20 May 2011. For NPILeligibility, the investment project must be a minimum of US$1M per project and/or per investor. It is sometimes possible to approve a private investment in Angola of less than US$1M, but not all incentives and benefits under the new legislation will be available for such a project and no profits or dividends can be repatriated.

It should be noted that the NPIL is rather generous on what it considers ‘foreign investment operations’, including, among others, the following acts or contracts (if carried out without using Angola currency reserves):

•  incorporation of local companies;
•  acquisition of quotas/shares in existing companies;
•  shareholders’ loans and supplementary capital contributions;
•  increases in share capital of existing companies; and
•  acquisition of certain assets and businesses.

Main forms of business structure

There are several mechanisms through which investments may be accomplished in Angola.

Limited liability companies

It is very common for foreign investors to choose to set up their own enterprise structures in Angola (including subsidiaries), thereby affording them direct control over their investment.

Amongst the various types of company provided for in the Companies’ Code the most significant are private limited liability companies (sociedade por quotas) and public limited corporations or joint stock corporations (sociedade anónima).

The minimum registered capital for a limited liability company is the equivalent to US$1,000 in Kwanzas (the Angolan local currency). Fifty per cent of the initial share capital contributions may be deferred for a maximum three year-period provided the legal minimum has been paid up in full (in cash, cash equivalents or in kind).

The capital is divided into ‘quotas’, which may or may not be of the same amount (but never be less than the equivalent of US$100).

The minimum share capital required for stock corporation is the equivalent to US$20,000, divided into shares (bearer or nominative) of the same nominal value, which may not be less than US$5 expressed in Kwanzas. It is possible to defer the payment of 70% of the share capital in cash or cash equivalents for a period not exceeding 
three years.

Branch offices

The Companies’ Code foresees no specific provision for a legal regime that applies to branch offices, and there are no regulations governing its operational structure, bodies and liabilities. Classified as non-autonomous legal entities by jurisprudence and legal doctrine, these are considered an extension of the parent company.

A branch office’s parent company, even if it is incorporated and operating in another country is liable, fully and without limit, for any obligations undertaken or attributable to that branch office.

The procedure for incorporating a branch office in Angola is similar to the procedure necessary for setting up a company, requiring the prior authorisation of the National Agency for Private Investment (ANIP), a notarial act and various registration requirements.

Representation offices

Decree-Law no. 7/90, dated 24 March 1990, governs the opening of representation offices by non-resident taxpayers and foreign exchange residents in Angola.

Representation offices are prohibited, in particular, from carrying out any legal acts and earning income in national or foreign currency. Payments made to or through the representation office should have the sole purpose of covering its operating expenses.

While effective mechanisms for streamlining currency exchange issues, they are not very flexible in the long run, particularly on what concerns the establishment of legally significant acts.

The representation offices of financial institutions have their own specific regime since they are also ruled by the Financial Institutions’ Law and supervised by Angola’s Central Bank (BNA), a state body with 
legal autonomy. This one also has powers over foreign exchange matters and Angolan state finance.

Financial market

Financial institutions

Several national, foreign and joint national and foreign banks are operating in Angola.

The incorporation of the Angolan Derivatives Exchange Market is soon to be announced, as of other financial instruments – such as securities and real estate investment funds – which may alter this market substantially.

Angolan financial institutions are essentially governed by the Financial Institutions’ Law (Law no. 13/05, dated 30 September 2005). The subjective scope of this legislation envisages banking and financial institutions such as foreign exchange agencies and financial leasing and factoring companies.

The incorporation of financial institutions in Angola requires the authorisation of BNA, following the completion of a process aimed at demonstrating, to this regulatory body, that the institution has the necessary human, material, technical and financial resources and is managed by professionals with the appropriate experience. Its subsequent activity will also be supervised by BNA.

From the outset, banking or financial activities carried out permanently in Angola by foreign companies cannot be accomplished on a cross-border basis. As a rule, these services should be rendered through an appropriate local form of representation, which should be duly authorised by BNA. Representation offices are prohibited from engaging in banking or financial operations.

Any amendments to the statutes of Angolan financial institutions require the prior authorisation of BNA. The acquisition or disposal of qualified holdings – understood as a percentage of no less than 10% of the votes in the financial institutions – also requires BNA notification and confirmation that this regulatory body does not oppose the project.

Moreover, the Financial Institutions’ Law sets out the codes of conduct applicable to financial institutions in respect of professional secrecy, client information, prevention of conflicts of interest, competition and advertising. On rather conservative terms, the legislation includes provisions concerning equity, compulsory reserves, prudential limits and relationships and accounting.

Financial investments

The Angolan investment sector covers, among other things, brokers, investment funds, securitisation management companies, asset management companies, stock exchanges and holding companies. The main governing legislation for this sector is the Securities’ Law (Law no. 12/05, dated 23 September 2005) and the regulatory body is the Angolan Capital Markets Commission (CMC).

The Securities’ Law demands the authorisation of the CMC for the incorp-oration of an investment company in Angola, following a process in which it must be demonstrated that the company meets the necessary conditions to pursue its activity.

The CMC also has the power to supervise the daily activity of these institutions both in terms of rules of conduct and compliance with its prudential requirements. These safeguards are in place to ensure adequate capitalisation and to constrain any risks of contagion.

Foreign exchange regime

Angola has a particularly limited foreign currency regime and the Angolan financial institutions play a key role in the clearance of transactions between residents and non-residents to ensure compliance. The main transactions subject to this specific treatment include:

• Clearance of ‘goods transactions’. This one may only be processed by purchasing currency from a bank resident in Angola and providing proof of its importation or dispatch to the institution, or by means of accounts in foreign currency. As a rule, the clearance of export and re-export of goods requires the intermediation of a banking institution authorised to engage in foreign exchange operations in Angola.
•  ‘Invisible current transactions’ between national and foreign territory or between Angolan residents and non-residents are generally subject to the authorisation of BNA. It should not be necessary for any finance entity to establish a place of business (or to be licensed, qualified or otherwise entitled to carry out business) in Angola or to meet any other criteria applicable under the laws of Angola for the entry into, performance or enforcement of any invisible current transactions, depending, of course, of the particularity of such transaction.

Tax regime

Angola is currently ongoing a major reform of its tax system. Relevant to the banking sector are the new ‘diplomas’ which entered into force 1 January 2012. These include a review of the Investment Income Code and a new Stamp Tax Code. [1]

In fact, in light of Angola’s increasing financial circuit and growing economical development, the Investment Income Code was adapted to match the new realities and eliminate several inefficiencies deriving from the previously existing diploma.

Investment income tax will be levied on income arising from invested capital, for instance:

• interest from loans granted and income deriving from credit facility contracts will be subject to a 15% rate; and
•  interest deriving from deposits with agreed maturity will be taxed at a 
10% rate.

Exemptions include income from financial institutions and cooperatives, when subject to industrial tax, even if exempt, as well as interest deriving from loans on life insurance policies, made by insurance companies.

As for the Stamp Tax Code, there was a generalised reduction of the applicable rates and the implementation of new obligations for companies and financial institutions regarding tax accounting, assessment and reporting.

Most financial operations (for example, credit, interest, commissions, guarantees, leasing) are taxed, including funding of Angolan companies by foreign companies and insurance taken out abroad as long as the risk covered is located in Angola.

MOZAMBIQUE

 

Mozambique is a successful south-eastern African country with significant growth potential. In the 17 years since the end of a long and devastating civil war, the country has enjoyed impressive economic growth, supported by solid macroeconomics policies and international assistance. Although this dipped to 6.3% in 2009 it rose to 7.2% in 2011 with exports of US$3.6bn.

With an area of 799,380 km2 and around 20.5 million inhabitants, the country’s main cities are its capital Maputo, along with Nampula, Beira, Chimoio, Nacala, Quelimane, Tete and Pemba. Natural resources include oil, gas and mineral resources (particularly aluminium). Aluminium, electricity, gas and ilmenite contribute almost 80% of the country’s export earnings. It is therefore hugely attractive to overseas investors. The local currency is the metical (MT).

Like Angola, the official language is Portuguese with national and local languages also spoken.  

Investing in Mozambique

The Centre for the Promotion of Investment (CPI) is the public investment authority in Mozambique and its function is to assist the national and foreign investors. [3]

Providing assistance to investors in the approval and implementation of investment projects, such as the concession of tax and customs benefits, the CPI also provides support with the business licensing, entrance visas, work and residence permits, customs exemption authorisations and licensing of land.

Once a project is submitted to the CPI, the public investment authority coordinates the project approval and negotiates the terms under which the project may be authorised with the respective investors together with the local and central authorities. When agreement on the terms of the authorisation is reached, the project is then submitted for approval by the central authorities (minister of the area involved or the provincial governor).

The approval of the investment project grants the investors the following rights:

•  legal protection of rights and property;
• no restrictions on the transfer of dividendsabroad, on borrowing or payment of interest abroad;
•  submission to arbitration (ICSID or ICC rules) for the resolution of disputes in respect of investments; and tax incentives.

Main forms of business

It is very common for foreign investors to set up their own enterprise structures in Mozambique, as this grants them direct control over their investment. The most significant limited liability companies are:

a) public or joint limited liability companies (sociedade anónima);

b) private limited liability companies (sociedade por quotas);

c) branches;

d) representation offices.

The commercial legislation sets no minimum capital for the incorporation of a limited liability company but the amount must always be suitable for the pursuit of the company’s social purpose and must always be expressed in the national currency – the Metical.

Financial market

Financial institutions

Several national, foreign and joint national and foreign banks are operating in Mozambique.

Mozambique financial institutions are essentially governed by the Financial Institutions’ Law – Law no. 15/99, dated 1 November 1999 (amended in 2004). The subjective scope of this legislation envisages banking and financial institutions, such as foreign exchange agencies and financial leasing and factoring companies.

These institutions are supervised by the Mozambican Central Bank (BM), a state body with legal autonomy, which also has powers over foreign exchange matters and Mozambican state finance.

The incorporation of financial institutions in Mozambique requires BM’s authorisation, following the completion of a process aimed at demonstrating that the institution has the necessary human, material, technical and financial resources, and is managed by professionals with the appropriate experience.

Foreign exchange regime

The foreign exchange transactions carried out in Mozambican territory or between residents and non-residents are regulated by the exchange control law and respective regulations (the ‘forex laws’). For the forex laws, the corporate residents are:

• private companies with head office in Mozambique;
•  agencies, branches and commercial representations of non-resident private corporate entities, duly registered in Mozambique; and public entities.

All forex transactions are subject to registration (the current transactions and the capital transactions) but not all are subject to approval from BM.

The current transactions (as classified by the forex laws) were released from the obligation of prior approval and are subject to registration at the commercial banks. Due processes should be adopted and specific documents should be provided.

The capital transactions require prior approval from BM and respective registration with this entity including all the relevant information to complete the transaction. This includes parties, amount, purpose, to name a few examples.

It should not be necessary for any finance entity to establish a place of business (or be licensed, qualified or otherwise entitled to carry on business) in Mozambique or to meet any other criteria applicable under the laws of Mozambique for the entry into, performance or enforcement of any invisible current transactions.

Tax regime

Unlike Angola, Mozambique did realise early on that its tax system needed reforming if it was going to attract foreign investment. Tax reforms date back to a period between 2007 and 2009. While Angola has a principle of not entering into double taxation treaties (DTTs), Mozambique has nine of them in force.[2]

The modernisation of its tax system included the implementation of a Tax Benefits Code, which foresees reductions and exemptions from corporate tax, deductions to the taxable base and accelerated depreciations for fixed assets.

The Stamp Tax Code presents similarities to the Angolan tax system, in that it is also levied on financial operations (for example, credit, interest, commissions, guarantees, leasing), including funding of Mozambican companies by foreign ones. This includes financial institutions.

As a general rule, for non-resident companies, investment income is subject to final withholding tax at a 20% rate, unless reduced under a tax treaty.

 

Vitor Marques da Cruz is a partner and Teresa Pala is a senior associate at MC&A, an international legal consultancy created in association with SNR Denton headquartered in Portugal, operating in Portugal and the African Portuguese- speaking countries, with emphasis on Angola and Mozambique.

www.legalmca.com

 

REFERENCES

[1]. The authors produced a useful guide to this at: http://legalmca.com/wp-content/uploads/2012/04/Newsletter-2.2012-Angolan…

[2]  KPMG’s Fiscal Guide summarises what these are 

 

As sociedades Salans e SNR Denton poderão anunciar brevemente uma fusão. As negociações já se encontram numa fase avançada, a votação para a aprovação do acordo de fusão está por isso prevista para setembro. Em Portugal, a SNR Denton tem como parceira a MC&A.

De acordo com o The Lawyer, as conversações para a fusão terão começado no final do ano passado. No entanto, fontes próxima sugerem que ainda há a possibilidade destas negociações não terem qualquer resultado, pois foram encontrados obstáculos políticos ao longo da negociação.

A SNR Denton encontra-se interessada neste negócio principalmente devido aos lucros dos escritório de Paris e Moscovo da Salans, por seu lado a Salans conseguirá com esta fusão aumentar grandemente a sua rede internacional. Se esta fusão se verificar, acontece 15 anos depois da antecessora Salans Hertzfeld & Heilbronn se ter fundido com a Christy & Viener.

Quanto ao nome que as empresas iriam passar a ter, sabe-se pouco, mas uma das opções em análise é a criação de uma marca completamente nova, não incluindo Salans ou SNR Denton no nome.

Na SNR Denton, a nível interno, não existem detalhes deste possível negócio. Contudo, durante o último encontro da firma, em maio, o presidente executivo Joe Andrew e o CEO Elliot Portnoy afirmaram que a sociedade estava à procura de uma pretendente para a fusão europeia.

Nenhuma das firmas comunicou os planos para este negócio, mas sabe-se que os sócios da Salans tem sido convidados a assinar acordos de confidencialidade.

A MC&A é a sociedade portuguesa parceira da SNR Denton, que integra assim uma rede internacional de escritórios de advocacia.

“A acontecer, a fusão entre a SNR Denton e a Salans (ou outra) em nada iria afetar a relação com a MC&A, antes poderia vir a reforçá-la”, esclareceu ao Advocatus o sócio da MC&A Vítor Marques da Cruz.