Mozambique is divided into three geographic areas, namely North, Center, and South. Each of these is served by a major port with rail and road networks linking to the major urban centers and the neighboring countries of South Africa, Eswatini, Zimbabwe, Zambia, and Malawi. The country also has a highway system linking all 11 provinces. There are no local logistic companies that cover the entire country on a scheduled basis, though trucking companies can deliver goods on a contractual basis. There are established scheduled routes serving the South African and Zimbabwean markets. The logistics infrastructure is underdeveloped and can cause delays or the sale of certain perishables goods to be unviable.

It is common for people to take advantage of arbitrage from neighboring countries to sell goods on the informal market, complicating efforts of American companies to establish legitimate, in-country sales channels.

Using an Agent or Distributor

In Mozambique, foreign companies commonly work with local agents or distributors. Local agents provide support in overcoming regulatory requirements and initial market barriers. Local agents can assist with compliance of local content regulations when tendering. Some U.S. firms supply the Mozambican market indirectly through regional distribution agents in South Africa. The number of agents that have access to distribution channels across the country is limited due to poor infrastructure.

Many of the tenders made available are for the supply of products or services to the public sector in partnership with local agents or distributors. This complies with local content requirements and typically makes the submission process easier. Note that it is very common for politically exposed people to be involved in business transactions. U.S. companies should conduct due diligence on local partners prior to entering into reseller agreements.

To find an agent, U.S. firms may approach the U.S. Commercial Service and the American Chamber of Commerce Mozambique.

Establishing an Office

There are multiple company structures to choose from when establishing a legal entity in Mozambique and it can be complicated. The most common legal structure used is the Sociedades por Quotas de Responsabilidade Limitada or limited liability quota company structure, which is similar to an American LLC. A local legal services provider should be consulted when determining the best structure.

U.S. companies are strongly encouraged to contact the Agência de Promoção de Investimentos e Exportações (APIEX), which is the agency for the promotion of investment and exports, or a local consultancy firm that can provide general start-up information and assist with registration procedures and permits.

Visit the U.S. Department of State’s Investment Climate Statements website for the latest Investment Climate Statement (ICS), which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and hiring employees.

Franchising

Though franchising is limited in Mozambique, the emergence of a middle class with disposable income in urban areas such as Maputo, Beira, Nampula, and Tete is driving interest in goods and services provided by foreign franchising companies. The concept of franchising is relatively new, hence there is no franchise association or formal authority responsible for franchising activity. Legal protection of brands also remains weak. Franchise fees and royalty transfers may be difficult to remit due to bureaucratic processes for sending funds outside the country.

Direct Marketing

Direct marketing is a growing business trend driven by the growth of smart phones and exposure to social media. Numerous companies directly target clients through email campaigns, websites, and online ads.

Most of the population does not have access to the internet and is unfamiliar with direct marketing. However, internet penetration within the emerging middle class is high and growing, particularly due to the prominent use of smart phones. Mobile applications and SMS messaging are also common ways of marketing directly to the client, especially those in remote areas. Door-to-door sales are rare due to concerns about crime and difficulty traveling through non-metropolitan areas.

Joint Ventures/Licensing

With the goal of developing entrepreneurship, joint ventures with Mozambican companies are encouraged by the Government of Mozambique. Though there is no legal requirement to partner with a local entity to establish a company, the government often requires partnerships with parastatals when a company bids for national projects or concessions. Having a partner can help U.S. companies comply with local content law and gain favor when bidding for government projects.

Express Delivery

Express delivery from major U.S. cities to Mozambique cities can take an average of 2-10 days. Imported goods have custom tariffs depending on their purchase price and product category. To find more information about custom tariffs U.S. companies can visit the Autoridade Tributária de Moçambique’s (AT) website.

Due Diligence

Companies should perform appropriate due diligence on their business partners and agents before entering any formal agreements. The U.S. Commercial Service’s International Company Profile can help address these due diligence