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The Bank of Mozambique recently announced the removal of barriers to foreign investment and investments by residents abroad, including international trade, increasing the annual limit to USD 1 million without the need for prior authorization.
Foreign citizens can now invest up to USD 1 million in Mozambique without prior central bank authorization. The Bank of Mozambique’s goal in the new Foreign Exchange Law is to eliminate barriers to foreign direct investment and boost the foreign exchange market.
The Bank of Mozambique recently announced the removal of barriers to foreign investment and investments by residents abroad, including international trade, increasing the annual limit to USD 1 million without the need for prior authorization.
In the information provided in Maputo on Tuesday (18-06), the central bank explained that the changes result from new exchange rate regulations, already in force, which removes barriers to foreign investment in Mozambique and investments by residents abroad, as well as facilitating international trade, and which can be summarised as creating mechanisms to make exchange rate operations more flexible through the gradual liberalisation of the capital account.
The Administrator of the Financial Services Department of the Bank of Mozambique, Maria Majimeja clarified that “in Foreign Direct Investment, operations on certificates of participation in collective investment organisations and operations on securities and other instruments traded in the capital market outside the stock exchange, in Mozambique, the amounts that can be applied without prior authorization from the Bank of Mozambique increased from the previous 15.8 million meticais (USD 250,000) to 63.2 million meticais (USD 1 million) annually”.
The central bank also established the obligation to make payments in national currency in all domestic transactions in the country and the harmonisation of the various special exchange rate regimes in force, within the scope of mining and hydrocarbon exploration projects, without, however, calling into question the commitments already undertaken in this matter.
The objective is to achieve greater speed in carrying out foreign exchange operations and guarantee a greater inflow of external capital and greater availability of currency, in addition to promoting the appreciation of the national currency and a stable, dynamic, and robust foreign exchange market.
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With the new regulations approved and presented this week, the central bank explains that it also intends to legitimize its intervention and role, as an exchange rate authority, to assign clear powers in exchange rate matters and guarantee the timeliness of exchange rate regulation, which will from now on will be done “through notices from the [central bank] governor”, given “that exchange rate matters are quite dynamic and require permanent and timely intervention from the authority in order to correct any anomalous situation that could distort the functioning of the market.
