The Beneficial Ownership Declaration for Foreign Investors in Mozambique

The acronym UBO stands for "Ultimate Beneficial Owner".

In the context of Mozambique's business regulations, particularly under Decree-Law No. 1/2024, it refers to the natural person(s) who ultimately own or control more than 25% of a company's shares or exercise significant influence over its decision-making processes.

Understanding the Beneficial Ownership Declaration for Foreign Investors in Mozambique

As a foreign investor looking to establish or operate a business in Mozambique, understanding the beneficial ownership declaration requirement is critical for compliance and seamless integration into the country's growing economy, which saw US$5 billion in foreign direct investment (FDI) approvals in the first half of 2025. Enacted under Decree-Law No. 1/2024 (March 8, 2024), this regulation mandates that companies identify and disclose their ultimate beneficial owners (UBOs)—individuals who hold more than 25% of the company's shares or exercise significant control over it. This requirement, part of Mozambique's updated legal framework under the Commercial Code (Decree-Law No. 1/2022), aligns with global anti-money laundering (AML) and counter-terrorism financing (CTF) standards. Below, we explain what this means for foreign investors, its purpose, process, and practical implications.

What is a Beneficial Ownership Declaration?

The beneficial ownership declaration is a mandatory filing that identifies the natural persons (individuals, not entities) who ultimately own or control a company. A UBO is defined as anyone who: Owns more than 25% of the company's shares (directly or indirectly, e.g., through another entity). Exercises significant control over the company's management or decision-making (e.g., through voting rights or influence over the board). Benefits economically from the company's activities, even if not formally listed as a shareholder. This declaration ensures transparency in corporate ownership, preventing the use of shell companies or complex structures to hide illicit activities. For example, if a foreign investor owns 30% of a Mozambican Limited Liability Company (LDA) through a holding company in Mauritius, they must be disclosed as the UBO.

Why the UBO Matters for Foreign Investors

For foreign investors entering Mozambique's dynamic market—projected at 2.5% GDP growth in 2025, driven by sectors like natural gas, agriculture, and renewables—the beneficial ownership declaration is a key compliance obligation with several implications:

Legal Compliance and Validity

:Submitting the declaration is a prerequisite for final registration with the Conservatória do Registo das Entidades Legais (CREL). Without it, your company's Commercial Registration Certificate, required for legal operations and third-party enforceability, will not be issued. Non-compliance risks fines up to MZN 500,000 (~$7,500) or operational delays.

Access to Incentives

Registering with the Agency for Promotion of Investments and Exports (APIEX) for FDI incentives (e.g., tax holidays of 5-10 years in priority sectors) requires a valid CREL registration, which hinges on the UBO declaration. For investments over MZN 2.7 million (~$42,000), this step is critical.

Risk Mitigation

The declaration aligns with Mozambique's commitments to international AML/CTF standards (e.g., FATF recommendations). Disclosing UBOs protects investors from being implicated in financial misconduct investigations, enhancing credibility with partners and banks.

Market Transparency

Mozambique's rising FDI rank (4th in Africa, per UNCTAD 2024) reflects its investor-friendly reforms. Transparent ownership strengthens trust, especially in high-value sectors like mining or energy, where local content laws (pending approval in 2025) demand clear accountability.

Process of Filing the Beneficial Ownership Declaration

The declaration is submitted during the final registration stage at CREL or via the Electronic One-Stop Shop (E-BAU), typically as part of the 10-30 day business setup process. Here's how it works:

Identify UBOs:

Determine all individuals with >25% ownership or control. This may involve tracing ownership through multiple layers (e.g., parent companies or trusts). For example, if a foreign investor owns 50% of a Mozambican LDA through a Dubai-based entity, they must disclose their personal details.

Prepare Documentation:

Details Required: Full name, nationality, date of birth, residential address, ID/passport number, and percentage of ownership/control.

Supporting Documents:

Certified copies of IDs/passports (apostilled for foreigners under the Hague Convention) and proof of ownership (e.g., share certificates or corporate records).

Language: All documents must be in Portuguese or accompanied by certified translations.

Submit to CREL/E-BAU:

Include the declaration with other registration documents (e.g., Articles of Association, name reservation certificate). Submission can be in-person at CREL offices (e.g., Maputo) or online via E-BAU for efficiency.
Verification and Updates: CREL reviews the declaration for AML/CTF compliance. Companies must update UBO information within 30 days of any change (e.g., share transfers) and file annual confirmations to maintain accuracy.
Costs: The declaration itself incurs no additional fee beyond standard registration costs (MZN 10,000-50,000/~$150-750 for a basic LDA). However, legal fees for document preparation or translations may range from MZN 20,000-50,000 (~$300-750).

Key Challenges for Foreign Investors

Foreign investors face specific hurdles when complying with this requirement:

Complex Ownership Structures: Investors using offshore holding companies or trusts must unravel layered ownership to identify UBOs, which can be time-consuming and require legal expertise.

Document Authentication: Foreign documents (e.g., passports, corporate records) need apostille and certified Portuguese translations, adding costs and delays. For example, a US investor's passport must be notarized and apostilled before submission.

Language Barrier: The Portuguese-only requirement for CREL filings can complicate matters. Engaging local lawyers (e.g., SAL & Caldeira) or APIEX (www.apiex.gov.mz) for guidance is advisable.

Privacy Concerns: Disclosing personal details may raise concerns for investors from jurisdictions with stricter privacy laws. However, Mozambique's data protection framework ensures confidentiality within AML/CTF protocols.

Bureaucratic Delays: Verification of UBOs, especially for complex structures, can extend the 5-10 day final registration timeline, particularly in provinces with less digital infrastructure.

Practical Tips for Compliance

To navigate the beneficial ownership declaration effectively:

Engage Local Expertise: Hire Mozambican legal or tax advisors to ensure accurate UBO identification and document preparation. Specialized Firms like can streamline the process.

Leverage E-BAU: Use the online platform (www.srn.gov.mz) for faster submissions and tracking, minimizing delays compared to in-person CREL visits.

Plan Ahead: Factor in 30-day buffers for document authentication and potential publication delays in the Boletim da República (up to 90 days for corporate acts).

Monitor Updates: Stay informed via APIEX or the Ministry of Justice portal (justica.gov.mz) for any 2025 amendments to Decree-Law No. 1/2024, especially with ongoing reforms in labor and local content laws.

Integrate with FDI Strategy: Submit the declaration alongside APIEX applications for incentives, ensuring eligibility for tax breaks or customs exemptions in sectors like renewables or tourism.

Why It's Worth It

The beneficial ownership declaration, while adding a layer of compliance, strengthens Mozambique's appeal as a transparent and predictable investment destination. By meeting this requirement, foreign investors secure legal standing, access to incentives, and protection against regulatory risks, positioning them to capitalize on opportunities in a market with rising FDI inflows and strategic reforms. For further details, consult CREL directly or visit www.apiex.gov.mz for tailored support.