12 °c
London
Tuesday, May 30, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Africa

Insight: Local content law in Mozambique

Duarte Marques da Cruz by Duarte Marques da Cruz
January 15, 2020
in Africa, Inclusion, Legal, Local Content, Mining, Mozambique, Natural Resources, Oil
Reading Time: 3 mins read
2.3k 149
6
Insight: Local content law in Mozambique
Share via QRWhatsappShare on FacebookShare on TwitterLinkedInPinteresteMail

The Mozambican economy has been growing considerably on the last years, particularly the mining industry. As such, and to promote Mozambican economic agents, the Mozambican Parliament intends to foster the production and use of Mozambican goods and services with the consequent growth and evolution of Mozambican companies and improvement of the population`s living conditions, through the creation of a new Local Content Law (which is yet to be passed).

 

Local Content is the portion of local production factors which were used in producing goods or providing services, as well as the participation of Mozambican citizens in the share capital of companies. Local Content Goods are goods with a minimum of 10% of Local Content; for each sector, dynamic minimum percentages may be set within a time frame of 7 to 10 years. Local Content Services are services provided by Mozambican citizens, or legal entities incorporated under Mozambican Law, that operate in Mozambican territory.

Local Participation

Local Participation is the subscription, up to 15%, of the share capital of:

  • Enterprises, through companies, to be created, between foreign and Mozambican citizens or legal entities.
  • Joint Ventures, to be created between Mozambican citizens or legal entities and the companies contracted by the concessionaires.

The minimum percentage of Local Participation is not transferable to foreign persons or companies.

Monitoring and Certification

The monitoring and management of the LCDL will be carried out by a public entity to be created. This public entity would likewise be responsible for keeping a data base on the Certified Mozambican suppliers. Goods and services of Local Content are subject to certification, to be issued by a public entity. The natural persons or companies will be deemed as “Local suppliers” by presenting the correspondent certificate.

This public entity is also responsible for establishing the percentage of Local Content, in accordance with the criteria and procedures to be set by the Mozambican Government.

Contracts

Goods or services to be purchased shall present the correspondent Local Content Certificate. The purchasing entity shall give preference to those goods or services with the highest local production factors. Suppliers may form associations to provide goods or services, provided that the requirements set by the purchasing entity are met.

Mozambican citizens or companies that intend to subcontract other entities to provide for goods or services, shall present a request for that effect. The subcontractor shall also be a certified supplier and is subject to the provision of the LCDL and its regulations.

Import of goods and services

In the event the goods or services required by the purchasing entity are not available in Mozambican territory, such goods or services may be purchased in foreign territory, provided that previous authorization is granted.

Local Content Plan

Enterprises that operate in Mozambican territory shall present to the relevant authorities, on an annual basis, a Local Content Plan, with the actions and strategies to be developed in the following year. Furthermore, contracting enterprises shall also elaborate a Long-Term Plan for a period of 5 years.

The enterprises shall submit, on an annual basis, to the relevant authorities, a report with a detailed evaluation of the performance of the Local Content Plan.

Transfer of Technology Plan

The foreign natural persons or companies shall also elaborate a plan for transfer of technology, experience, technical knowledge and skills to the Mozambican natural persons or companies to which they are associated with.

Sanctions

The violation of the rules of the LCDL may be sanctioned by the application of fines or suspension of the supplier for a period of 2 years. Subcontractors are jointly liable for the lack of compliance with the LCDL.

Other legal dispositions currently in force in Mozambique

Although the LCDL is not currently in effect in Mozambique, there are already a number of legal dispositions in force with local content provisions, especially in the Petroleum and Mining sectors.

Petroleum Sector
The Mozambican Petroleum Law and the Mega Project Law have several local content dispositions, such as:

  • Mandatory registration of oil and gas companies, on the Mozambique Stock Exchange.
  • When the public interest so requires, holders of oil or gas exploration rights shall give preference to the Mozambican Government in the acquisition of petroleum produced in the concession area.
  • Concessionaires are required to obtain Mozambican participation in their share capital, in an amount between 5% to 20%, via the stock exchange and on commercial terms.

Mining Sector
The mining sector is regulated by the Mining Law and the Mining Law Regulation. Both these diplomas mention some local content dispositions, such as:

  • The acquisition of goods and services in the minimum amount of 15,000,000 MT (which roughly corresponds to 900,000.00 USD), must be executed through public tender.
  • Titleholders and contractors must give preference to Mozambican goods and services whenever available, and when its price is no more than 10% higher to the prices of the imported goods available.
  • Concessionaires are required to obtain Mozambican participation in their share capital, in an amount between 5% to 20%, via the stock exchange and on commercial terms.

Duarte Marques da Cruz

Related

Tags: Certified Mozambican suppliersDuarte Marques da CruzEnergyExpertFeatureLawLawyerLCDLLocal ContentLocal Content GoodsLocal Content LawLocal Content ServicesLocal Participationlocal partnerMining LawMozambiqueOil and gasOpinionмозамбикموزمبيقモザンビーク莫桑比克
ScanSendShare992Tweet620Share174Pin223Send
Duarte Marques da Cruz

Duarte Marques da Cruz

Duarte Marques da Cruz is partner of the Portuguese law firm MC&A, specialized in international business advisory, with a special focus in Lusophone markets. With extensive experience in the Energy sector (Renewables and Oil & Gas) and in International Taxation, he has supported international companies in major upstream, midstream transactions and projects, including in implementing, exploration and development programs. Duarte has also supported international clients in other areas of practice, namely, Mining, Transport & Logistics, Regulatory Compliance and Mergers & Acquisitions in Mozambique, Angola and Portugal.

Related Posts

TECH – Coding Algorithms in MT4: Understanding MQL 4
Tech

TECH – Coding Algorithms in MT4: Understanding MQL 4

by FurtherAfrica
May 29, 2023
BP production in Angola is in decline since 2017
Energy

New oil companies entering Angola’s oil market

by FurtherAfrica
May 29, 2023
Agriculture

Mozambique is among the world’s largest tobacco producers

by 360 Mozambique
May 29, 2023
Business

Emirates Etisalat keen to enter Ethiopian market

by FurtherAfrica
May 29, 2023
Three unmissable experiences in Namibia for your bucket list
Travel

Tourism recovers in Nambia ahead of peak season

by FurtherAfrica
May 29, 2023
Platform Africa 2023
 
Mozambique eVisa
 
MozParks
 

Translate this page

Read the Latest

TECH – Coding Algorithms in MT4: Understanding MQL 4
Tech

TECH – Coding Algorithms in MT4: Understanding MQL 4

by FurtherAfrica
May 29, 2023
0

In the world of automated trading, MetaQuotes Language 4 (MQL 4) is a widely used programming language for developing algorithmic...

Read more
BP production in Angola is in decline since 2017

New oil companies entering Angola’s oil market

May 29, 2023

Mozambique is among the world’s largest tobacco producers

May 29, 2023

Emirates Etisalat keen to enter Ethiopian market

May 29, 2023
Three unmissable experiences in Namibia for your bucket list

Tourism recovers in Nambia ahead of peak season

May 29, 2023

FurtherAfrica Partners Network

The Exchange Farmers Review Africa 360 Mozambique
TechGist Africa Energy Capital & Power Club of Mozambique
Taarifa Rwanda Web3Africa See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa  

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 107,187 other subscribers.
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?