Scaling a company to Mozambique is an exciting accomplishment, but comes with common challenges such as setting up a subsidiary before hiring new employees, running your payroll, and providing compensation and benefits.
As a global EOR, G-P streamlines entity setup, handling the complex HR and legal tasks so you can focus on beginning operations. When you partner with us, we ensure compliance with country-specific laws to mitigate risk as your company grows.
How to set up a Mozambique subsidiary
It’s important to note that in Mozambique, different cities and regions can operate under separate incorporation rules, costs, and availability. Companies should research the area where they want to incorporate before choosing a physical office space, or work with a consultant who can help them choose.
Mozambique offers several types of structures for companies looking to expand in the country. They can become a limited liability company (LLC), public limited company (SA), branch, or representative office. Each entity comes with its own Mozambique subsidiary laws and benefits, so it’s important to review the company’s business goals and structures to make the right decision.
Many companies opt to incorporate as an LLC because of its benefits for both the subsidiary and the parent company. The Mozambique subsidiary setup process for an LLC includes the following steps:
- Obtaining a certificate of the unique name at the Legal Entities Registrar
- Signing Articles of Association before a notary
- Opening a provisional bank account and paying registration fees
- Registering with Mozambique’s Legal Entities Registrar of Maputo
- Requesting a commercial registry certificate
- Publishing company statutes in the official gazette
- Registering for taxes and getting NUIT
- Applying for a simplified operating license with the One-Stop Shop of Maputo
- Declaring the start of the business activity at the tax department
- Registering job candidates at the provincial employment center
- Registering all employees with the social security system
Mozambique subsidiary laws
Limited liability companies have their own set of subsidiary laws related to startup capital, structure, and more. Companies need at least 1 director and 1 shareholder of any nationality. These individuals do not have to live in Mozambique while working for the company.
If the company employs an international director, they’ll need a personal tax number but won’t have to file tax returns unless they live in the country. Once the business officially incorporates, they’ll need to hire a local accountant who will file the monthly VAT returns with the Mozambique Tax Office.
LLCs do not have minimum capital requirements, but the company’s share capital will get divided into quotas. Every quota is nominative and expressed in the local currency. Quota holder liability is limited to the value of which each of them has subscribed.
Benefits of setting up a Mozambique subsidiary
Although it can take weeks or months to set up a Mozambique subsidiary, it does bring helpful benefits to all growing companies. LLCs ensure that both the parent company and the subsidiary operate with limited liability. The parent company will not be responsible for any litigation regarding the subsidiary, and the subsidiary can choose its own operating structure in Mozambique.
Other important considerations
While companies learn how to set up a Mozambique subsidiary, it can help to set aside everything they need to incorporate successfully. They should work with their accounting team to budget the right amount for the subsidiary setup process and budget the money and time they’ll need to fly back and forth to Mozambique.
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