The new foreign exchange rules and procedures approved by the Bank of Mozambique (“BoM”) have just been published in the Official Gazette as Notice No. 20/GBM/2017, of 27 December 2017 (“New FX Rules”).
The New FX Rules implement Decree No. 49/2017, of 11 September 2017, pursuant to which the Council of Ministers repealed the former Foreign Exchange Regulations (Decree No. 38/2010, of 31 December 2010) and entrusted BoM with the duty to approve new foreign exchange rules and procedures.
The New FX Rules introduce significant changes, highlights of which are as follows:
- The mandatory registration of FX operations shall now be processed electronically and in real time by the relevant commercial bank;
- FX residents are now required to remit export earnings to Mozambique into an export earnings account in foreign currency, which can only be used for specifically defined purposes. However, there is no longer an obligation to convert 50% of the export proceeds into local currency and FX residents only have to convert the amounts required to make payments to other FX residents when due;
- Authorisation applications for capital operations shall now be routed via commercial banks, which will then forward them to BoM;
- Foreign direct investment (FDI) is no longer subject to BoM’s prior authorisation, but only to registration via the commercial bank used to intermediate the operation (with some exceptions);
- Shareholders’ and intercompany loans made by FX non-residents to their FX resident subsidiaries or affiliates are pre-authorised and only subject to registration whenever (i) they are interest free, the repayment period is at least 3 years and no fees and other charges apply; or (ii) the interest rate is lower than the base lending rate for the relevant currency, the repayment period is at least 3 years and the loan amount is a maximum of USD 5 Million;
- Financial loans contracted abroad by FX residents in an amount of up to USD 5 Million are pre-authorised, to the extent that certain requirements are met;
- When applicable, applications for authorisation for financial loans contracted abroad by FX residents shall now be channeled via the commercial bank to be used to intermediate the operation;
- Investment abroad by FX residents in connection with certain capital operations is pre-authorised up to USD 250 Thousand;
- Special FX regimes for Oil and Gas operations and Mining activities are now in place.
For a more detailed analysis and/or an English translation of the New FX Rules, please contact: