Doing Business in Mozambique 2019 TRADING ACROSS ENFORCING BORDERS CONTRACTS Comparing Business regulation for Domestic Firms in 10 Provinces with 189 Other Economies © 2019 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the sta of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Doing Business in Mozambique 2019 TRADING ENFORCING ACROSS CONTRACTS BORDERS Comparing Business regulation for Domestic Firms in 10 Provinces with 189 Other Economies Resources on the Doing Business website Doing Business in Mozambique 2019 Subnational and regional projects http://www.doingbusiness.org/mozambique subnational and regional level Current features http://www.doingbusiness.org News on the Doing Business project /subnational http://www.doingbusiness.org Historical data Rankings Customized data sets since DB2004 How economies rank—from 1 to 190 http://www.doingbusiness.org http://www.doingbusiness.org/rankings /custom-query Data Law library All the data for 190 economies—topic Online collection of business laws and rankings, indicator values, lists of regulations relating to business regulatory procedures and details http://www.doingbusiness.org underlying indicators /law-library http://www.doingbusiness.org/data Entrepreneurship data Reports Data on new business density (number Access to Doing Business reports as well of newly registered companies per 1,000 as subnational and regional reports, case working-age people) for 143 economies studies and customized economy and http://www.doingbusiness.org/data regional profiles /exploretopics/entrepreneurship http://www.doingbusiness.org/reports Ease of doing business score Methodology Data benchmarking 190 economies to the The methodologies and research papers best regulatory performance and the ease underlying Doing Business of doing business score http://www.doingbusiness.org/en/data/ http://www.doingbusiness.org doing-business-score /methodology Information on good practices Research Showing where the many good Abstracts of papers on Doing Business practices identified by Doing Business topics and related policy issues have been adopted http://www.doingbusiness.org/research http://www.doingbusiness.org/data /good-practice Doing Business reforms Short summaries of DB2019 business regulation reforms and lists of reforms since DB2006 http://www.doingbusiness.org/reforms AT A G Doing Business in Mozambique 2019 LANC E The first subnational report of the Doing Business in Mozambique series Full report: www.doingbusiness.org/mozambique D oing Business in Mozambique 2019 focuses on business regulations and their enforcement It also measures the process of trading across borders through three Mozambican ports and one border Doing Business measures aspects of regulation that enable or hinder entre- preneurs in starting, operating or across four Doing Business areas. It crossing. expanding a business—and provides goes beyond Maputo City to bench- This report contains data current as of recommendations and good practices mark nine other Mozambican September 30, 2018 and includes for improving the business environment. provinces across four regulatory areas. comparisons with other economies based on data from Doing Business 2019: Training for Reform. Four Doing Business indicator sets covering areas of local jurisdiction or practice Starting a business Enforcing contracts Records the procedures, time, cost and paid-in Records the time and cost for resolving a commercial minimum capital required for a small or medium- dispute through a local first-instance court, which size domestic limited liability company to formally hears arguments on the merits of the case and operate; includes a gender dimension to account for appoints an expert to provide an opinion on the any gender discriminatory practices. quality of the goods in dispute; assesses the existence of good practices in the court system. Registering property Records the procedures, time and cost required Trading across borders to transfer a property title from one domestic firm Records the time and cost (excluding tari s) to to another so that the buyer can use the property import and export goods. Three sets of proce- to expand its business, use it as collateral or, if dures are assessed—documentary compliance, necessary, sell it; assesses the quality of the land border compliance and domestic transport- administration system; includes a gender dimension within the overall process of exporting and to account for any gender discriminatory practices. importing a shipment of goods. 10 provinces: Cabo Delgado, Gaza, Inhambane, Manica, Maputo City, Nampula, Niassa, Sofala, Tete and Zambezia 4 trade 3 ports: Beira, Nacala and Maputo locations: 1 border crossing: Ressano Garcia Advantages and limitations of the Doing Business methodology Doing Business does not cover: Focus on the law and practice Reliance on expert respondents ✗ Security Makes the indicators “actionable” because Reflects knowledge of those with most ✗ Market size the law is what policy makers can change. experience. ✗ Macroeconomic stability ✗ State of the financial system Use of standardized case scenarios Focus on domestic and formal sector ✗ Prevalence of bribery and Enables comparability across locations, Keeps attention on the formal sector, where corruption but reduces the scope of the data. firms are most productive, but does not ✗ Level of training and skills of the reflect the informal sector or foreign firms. labor force A collaboration of the World Bank Group (WBG) and the Ministry of Industry and Commerce of Mozambique. Doing Business in Mozambique 2019 was funded by the United Kingdom, the Swiss State Secretariat for Economic A airs, SECO and the World Bank Group. Contents Executive summary 1 What is Doing Business in Mozambique 2019 and what does it measure? 3 What are the main findings? 3 Comparing regulations across the country 8 The way forward 12 About Doing Business and Doing Business in Mozambique 2019 21 Starting a business 33 How does starting a business work in Mozambique? 34 What can be improved? 41 Registering property 46 How does registering property work in Mozambique? 47 What can be improved? 55 Enforcing contracts 59 How does contract enforcement work in Mozambique? 60 What can be improved? 67 Trading across borders 73 How does trading across borders work in Mozambique? 79 What can be improved? 86 Data notes 91 Provinces profiles 109 Cabo Delgado 110 Gaza 113 Inhambane 116 Manica 119 Maputo City 122 Nampula 125 Niassa 128 Sofala 131 Tete 134 Zambezia 137 List of procedures for starting a business 140 Details on the quality indexes 142 Trade locations profiles 145 Beira 146 Maputo 148 Nacala 150 Ressano Garcia 152 Acknowledgments 154 Executive summary MAIN FINDINGS ¡ Doing Business in Mozambique 2019, the first subnational Doing Business report on the country, measures four regulatory areas impacting business the environment: starting a business, registering property and enforcing contracts in ten provinces and trading across borders in three ports and one border crossing. ¡ No single Mozambican province dominates the indicator rankings across all areas benchmarked, leaving room for all locations to learn from each other’s good practices. ¡ Gaza stands out by ranking in the top third on two indicators — third in starting a business and second in registering property. ¡ If Maputo City adopted the good practices already in place, its overall performance would improve, and it would jump from 135 to 113 in the Doing Business global ranking. ¡ Compared globally, Mozambican locations’ performance underperform on the quality indices. Regulatory quality depends greatly on national agencies and policies, but provincial and municipal governments also play a role especially in accessibility of cadastral records and of information in property registries. ¡ Action areas addressing common themes across indicators — such as internal coordination within different agencies and increasing the capacity of public officials  — will improve the prospect that reforms will bear fruit. 2 Doing Business IN MOZAMBIQUE 2019 O ver the past decade Mozambique of 5.5 children per woman, the country’s exposure to foreign markets and fluc- has introduced a broad range population is expanding quickly,5 putting tuating commodity prices. Small and of reforms aimed at improving pressures on the labor market. Every year medium-size enterprises (SMEs), which the business environment for the private for the next decade, almost half a million are responsible for two-thirds of employ- sector. Very recently it made connecting young people will enter a labor market6 ment in developing economies, can be to the electricity grid faster by imposing that already has an unemployment rate instrumental in alleviating poverty by new deadlines and streamlining proce- of around 25%, by some estimates.7 To providing opportunities to secure a good dures; made paying taxes easier by accommodate the influx of workers while and sustainable standard of living.8 As reducing the time taxpayers had to wait providing them with more and better entrepreneurs continue to face numerous to request a cash refund for value added opportunities, it is vital that the govern- bureaucratic hurdles and weak legal tax (VAT); and implemented an electronic ment identify new sources of growth. protections, focusing on regulatory single window for international trade. reform and its effective implementation Still, companies continue to face barriers Against this backdrop, the private will reinforce the private sector’s ability to start up, operate and grow — a result, sector stands to play a critical role in to create jobs and lift people out of in part, of excessive government bureau- helping the economy diversify, reducing poverty. Excessive or poorly designed and cracy.1 While Mozambique performs above average both regionally and glob- FIGURE 1.1  Ten provinces, three ports and one border crossing are measured by Doing Business in Mozambique 2019 ally on obtaining construction permits or going through insolvency proceedings, it ranks near the bottom among the 190 TANZANIA economies measured by Doing Business when it comes to starting a business or MOZAMBIQUE resolving commercial disputes through the courts.2 Lack of coordination across C A BO NIA SSA government agencies, outdated laws, DELG A DO Pemba Lichinga burdensome regulations and inefficient MALAWI implementation practices are largely to ZAMBIA Nacala blame. NA M P UL A Nampula After the establishment of a democratic TETE system in 1994, Mozambique sustained Tete macroeconomic stability for over two EZIA ZAMBÉ decades, supported by a growth process based on foreign aid, the extractive sector Quelimane and capital-intensive megaprojects such as aluminum smelter and gas, coal ZIMBABWE Chimoio SOFA L A and heavy sands exploration projects.3 M A NIC A Between 2002 and 2015, formal employ- Beira ment and the total number of firms in Mozambique doubled; much of this expansion happened in the non-extrac- tive private sector.4 However, recent challenges — such as the debt crisis that INHA M B A NE came to light in 2017 — have stood in the way of sustained growth. The debt revela- GAZA tion occurred as the country was already SOUTH Inhambane navigating an economic downturn AFRICA brought by low commodity prices and DOING BUSINESS IN MOZAMBIQUE a regional drought that impacted crops Ressano Xai-Xai Garcia BORDER CROSSINGS across the country. As Mozambique IBRD 44068 | JANUARY 2019 This map was produced by the M A P UTO CIT Y PROVINCE CAPITALS emerges from this period of economic Cartography Unit of the World Bank Group. The boundaries, colors, MAPUTO NATIONAL CAPITAL denominations and any other information shown on this map do not volatility, it faces important development PROVINCE BOUNDARIES imply, on the part of the World Bank Group, any judgment on the legal status ESWATINI of any territory, or any endorsement or INTERNATIONAL BOUNDARIES constraints. With an average fertility rate acceptance of such boundaries. EXECUTIVE SUMMARY 3 implemented regulations distract busi- are implemented or issued by local nesses from their core mission, limiting authorities. Doing Business in Mozambique What are the main their formal creation and expansion. 2019 — the first subnational Doing findings? Business study for the country — looks at Promoting a well-functioning private the business environment in 10 of the No single province performs equally sector and supporting the growth of country’s 11 provinces as represented by well across all the benchmarked SMEs is a major undertaking for any their capitals. The provinces measured areas government. It requires long-term poli- are: Cabo Delgado, Gaza, Inhambane, It is easiest to start a business in Maputo cies of removing administrative barriers Manica, Maputo City, Nampula, Niassa, City (table 1.1), where entrepreneurs can and strengthening laws that promote Sofala, Tete and Zambezia. This study go to a single location — the company entrepreneurship. To ensure effective presents the findings for these locations registry — to both register a company implementation, reforms that provide an across three regulatory areas: starting and publish its articles of association in appropriate incentive framework based a business, registering property and the official gazette. Starting a business is on clear, transparent and predictable enforcing contracts. A fourth indicator three weeks faster in Maputo City than in rules are normally backed up by strong measures trading across borders through the other nine provinces.12 Zambezia is and high-level political leadership. By three major seaports — Beira, Maputo and the best performer in registering property, highlighting existing bottlenecks and Nacala — and one land border crossing, due to a streamlined transfer approval good practices already in place, this Ressano Garcia (figure 1.1).11 It evaluates process at the municipality, advanced report provides a road map for policy trade performance by tracking the time digitization of the cadastral plans and the makers on areas of focus beyond the and costs associated with certain import implementation of a geographic infor- main business city, Maputo. This is and export procedures. mation system. Resolving a commercial crucial for Mozambique at this juncture dispute is easiest in Manica, thanks to on its path to economic prosperity. These four indicators relate to regulatory relatively speedy courts and low attorney areas that are typically governed locally or fees. that depend on local implementation of WHAT IS DOING BUSINESS national regulations. Most of the regula- All provinces but Sofala and Tete rank in IN MOZAMBIQUE 2019 AND tions that govern starting a business and the top third on at least one indicator out WHAT DOES IT MEASURE? enforcing contracts apply nationally but of the three measured. Gaza stands out are administered at the provincial level. by ranking in the top third on two indica- Doing Business tracks business regula- For registering property, both provin- tors. In starting a business, it is among the tions that affect small and medium-size cial and municipal authorities apply three provinces that publishes a simpli- domestic companies across 190 the national laws that govern property fied abstract of the articles of association; economies. In the annual Doing transfer. The tax authority and property thus, publishing costs are half what they Business assessment, each economy registries are regulated at the national are elsewhere. In registering property, is represented by its largest business level and operate at the provincial level, Gaza is among the fastest provinces in city — which in the case of Mozambique whereas the municipal tax office and updating the municipality’s cadastre, is Maputo. However, Maputo does not municipal urban planning department and the total cost and total time to tell the full story. While the capital city function at the city level. Yet even in areas transfer property are lower than average. and its associated province (Maputo governed by national regulation, actions Gaza also stands out in transparency City) represent a major economic center, taken locally by a court or port operator, of information because it publishes its with about one-third of all businesses for example, can change the degree of commitment to deliver a legally binding in the country, 9 it contains only about complexity and the efficiency of the regu- document proving ownership within a 4% of Mozambique’s population.10 latory process. Moreover, Mozambique’s specific deadline. Mozambique is divided into 10 provinces ongoing decentralization process has and one capital city with provincial status progressively given more powers to the In trading across borders, the border (Maputo City), and entrepreneurs can provinces and municipalities, which crossing of Ressano Garcia outperforms face different challenges depending on shifts the focus of the reform agenda of the three seaports measured (table 1.2). where they operate. improving service delivery to include the Ressano Garcia has shorter times and local level. lower costs associated with terminal Subnational Doing Business reports yield a handling and fewer documentary require- more nuanced picture of each economy ments. Its strong performance is also a than the global report, because many testament to the gradual implementa- regulations and administrative measures tion of the one-stop border post project, 4 Doing Business IN MOZAMBIQUE 2019 TABLE 1.1  Doing Business in Mozambique 2019 — where is it easier? Starting a business Registering property Enforcing contracts Province Score Rank Score Rank Score Rank (City) (1–100) (1–10) (1–100) (1–10) (1–100) (1–10) Cabo Delgado (Pemba) 67.32 2 52.13 8 51.53 8 Gaza (Xai-Xai) 66.65 3 54.78 2 50.34 9 Inhambane (Inhambane) 61.07 6 54.77 3 57.05 4 Manica (Chimoio) 60.38 7 53.61 5 64.40 1 Maputo City (Maputo) 67.56 1 52.94 6 39.78 10 Nampula (Nampula) 59.01 10 50.92 9 58.45 2 Niassa (Lichinga) 61.33 5 54.18 4 57.37 3 Sofala (Beira) 59.04 9 49.94 10 56.52 5 Tete (Tete) 66.16 4 52.61 7 53.38 6 Zambezia (Quelimane) 59.77 8 56.72 1 52.74 7 Source: Doing Business database. Note: Rankings are based on the Doing Business score which shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019” and the ‘’Data notes’’. under the framework of the 2007 agree- due to the burdensome and expensive because of considerably lower customs ment reached by Mozambique and South procedures to export pigeon peas to broker fees. Yet the process still takes Africa to improve customs clearance India — especially considering that the longer in Nacala than in Maputo. Time to procedures for commercial cargo at the supervision of packing usually takes comply with documentary requirements border and reduce waiting times. place at Nacala’s Special Export Terminal is an area where all the border crossings (Terminal Especial de Exportação de Nacala, perform well due to the implementation Among the three maritime ports, it is or TEEN), where there are long lines and of the electronic single window, a portal easiest to export coal from Beira due high fees. It is easier to export aluminum connecting the main stakeholders. to a faster clearance process that does than sugar from Maputo port because However, there is room for improve- not require phytosanitary certificates, the major exporter, Mozal, operates its ment in customs clearance and terminal supervision of packing or scanning own dedicated aluminum port terminal; handling procedures. inspections. Nacala, the deep-water also, aluminum exports do not require port located in Nampula Province, ranks phytosanitary certification.13 The import last out of the four locations measured of auto parts is easiest through Nacala TABLE 1.2  Trading across borders in Mozambique—where it is easier? Trading across Product borders score Location (0-100) Export Import Trade by sea Beira port 68.40 HS 38 – Miscellaneous chemical products (coal) Maputo port 62.92 HS 17 – Sugars and sugar confectionery (sugar) HS 07 – Edible vegetables and certain roots and Nacala port 60.85 tubers (pigeon peas) HS 8708 – Parts and accessories of motor Average by sea 64.05 – vehicles (auto parts) Maputo Port (Doing 73.84 HS 76 – Aluminum and articles thereof (aluminum) Business 2019 ) Trade by land Fronteira Ressano 81.31 HS 17 – Sugars and sugar confectionery Garcia (sugar molasses) Source: Doing Business database. Note: The trading across borders score shows how far a location is from the best performance achieved by any economy on this Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019” and the data notes. The data for the Ressano Garcia border and the Maputo port for imports are the same. For more details, see table 6.1 in the trading across borders chapters. EXECUTIVE SUMMARY 5 FIGURE 1.2  If all local good practices were adopted, Mozambique’s global performance would improve by 22 places Best performance across Mozambique Hypothetical Doing Business score 35 Enforcing contracts 348 days, 21.8% of claim value 8.5 points on the quality of judicial processes index 64 Trading across borders Mozambique (Maputo) EXPORT Doing Business score in 2019 Border compliance: 52 hours; USD 245 Documentary compliance: 16 hours; USD 70 Trading across borders IMPORT EXPORT 91 Border compliance: 9 hours; USD 399 Border compliance: 66 hours; USD 602 Documentary compliance: 16 hours; USD 60 Documentary compliance: 36 hours; USD 160 IMPORT 113 Registering property Border compliance: 9 hours; USD 399 113 7 procedures, 37 days, 5.2% of property value Documentary compliance: 16 hours; USD 60 10 points on the quality of land administration index Registering property 133 Ease of doing 8 procedures, 43 days, 5.2% of property value 135 business with 7.5 points on the quality of land administration index best practices Enforcing contracts 160 Starting a business 167 10 procedures, 17 days, 68.4% of GNI per capita 950 days, 53.3% of claim value 174 0% paid in minimum capital 8.5 points on the quality of judicial processes index Starting a business 10 procedures, 17 days, 120.5% of GNI per capita 0% paid in minimum capital Source: Doing Business database. Note: The ease of doing business score shows how far on average a location is at any given point in time from the best performance achieved by any economy on each Doing Business indicator since 2005. The measure is normalized between 0 and 100, with 100 representing the best regulatory performance (the higher the score, the better). If Maputo City were to adopt all the (as in six provinces14) and has a score can learn from one another to help them good practices found across the of 10 on the quality of land adminis- improve their business environment. 10 provinces, the country’s overall tration index (as in Tete) would rank Differences in contract enforcement and ranking in the global Doing Business 113 — a jump of 20 places in the global cross-border trade stand out. Manica has study would jump 22 places ranking, surpassing Kenya. Altogether, the highest performance on enforcing Provinces across Mozambique have by adopting all the good practices found contracts — a result of low attorney fees much to learn from their peers in all at the subnational level across the four (10% of the claim value) and relatively indicator areas. Take the example of indicator areas, Mozambique would jump fast courts (380 days in total). Manica enforcing contracts (figure 1.2). A hypo- 22 places in the global ranking of 190 would rank close to the top 50 of the 190 thetical location where a commercial economies on the overall ease of doing economies measured globally by Doing dispute is solved in 348 days (as in Tete), business, from 135 to 113. Business in this area. Gaza and Inhambane costs 21.8% of the claim value (as in would also rank well, in the top half of all Manica) and scores 8.5 on the quality of There are significant gaps between economies. By contrast, Maputo City judicial processes index (as in Maputo the best- and worst-performing ranks in the last quartile globally. There, City, Nampula, Sofala and Tete) would provinces for each indicator but contract enforcement takes the longest, stand at 35 in the global ranking on this differences in performance on at 950 days (more than two times longer indicator  — 132 places higher than contract enforcement and cross- than in Manica) and is most expensive, Mozambique’s current ranking among border trade stand out costing entrepreneurs more than half 190 economies, according to Doing The performance gap among locations the total claim value — twice the average Business 2019. For registering property, a is best illustrated by using the ease of of the 10 provinces. Lengthy delays in location where the process takes 37 days doing business score, which shows how scheduling hearings drive trial times, (as in Inhambane), costs 5.2% of the close a location is to recorded global best causing a backlog of cases — a structural warehouse value (as in Maputo City and practices (figure 1.3). These gaps suggest and widespread problem in Mozambican Zambezia), requires seven procedures there are important lessons that provinces lower courts but one that is exacerbated 6 Doing Business IN MOZAMBIQUE 2019 FIGURE 1.3  The performance gap between provinces in Mozambique is larger for contract enforcement and trading across borders Ease of doing business rank (1–190 economies) 1 20 Top 25% of performers 40 Manica 64.40 Doing Business 60 score Ressano Garcia 81.31 Highest 80 100 Average 68.37 Average 54.19 120 Zambezia 56.72 SADC Average 53.26 CPLP SSA SSA SADC 140 Nacala 60.85 Lowest SADC, SSA Sofala 49.94 SADC CPLP CPLP CPLP 160 SSA Bottom 25% Maputo City of performers Maputo City 67.56 39.78 180 Average 62.83 Nampula 59.01 Starting Registering Enforcing Trading a business property contracts across borders CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Rankings are based on the ease of doing business score, which shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in Mozambique 2019.” The average for Mozambique is the average of the locations measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. (Timor-Leste is excluded from the CPLP average as it remains a “no practice” economy in the area of registering property.) in Maputo City. Maputo City also has Within Mozambique the differences of coordination among agencies involved the second-highest attorney fees — more in performance are not as large for in land administration — and lower scores than 50% above the average for the 10 starting a business and registering on the quality index, which focuses on provinces measured — and the most property. Nevertheless, relatively small reliability of land and cadastral record expensive court and enforcement costs. differences across provinces on each keeping, transparency of land informa- indicator’s score may hide the larger tion, extent of geographic coverage On the trade front, the Ressano Garcia differences that entrepreneurs face in and ease of resolving land disputes. border is the easiest trading location practice. For example, Maputo City Zambezia, the best performer on this in Mozambique and would be near outperforms Nampula by just 14% on indicator, would place only in the third the top third of the global ranking on the starting a business score; however, quartile globally, the same as seven other trading across borders.15 Nacala, on the process takes more than twice as provinces. Two provinces — Nampula and the other hand, would be in the bottom long in Nampula — 40 days, compared Sofala — would rank in the last quartile. third, especially because of the time it with 17 in Maputo City — and requires On business start-up, all provinces would takes for export-related border compli- an extra step. Starting a business and place among the bottom 20 economies ance (customs clearance, inspections registering property are also the indica- globally. Low performance throughout and port handling). Looking at trade by tors for which locations in Mozambique Mozambique is a concern, especially sea, Mozambique’s measured ports on are collectively furthest from global considering that making it efficient to average outperform neighboring ports in best practices. Performance on property start a business is key to promote the Tanzania and South Africa, except for Port registration is encumbered by a large creation and formalization of firms. Elizabeth and Ngqura in South Africa. number of procedures — due to the lack EXECUTIVE SUMMARY 7 Contract enforcement and cross- Relatively small differences across provinces on each border trade are also the indicators indicator’s score may hide the larger differences that where Mozambique outperforms its entrepreneurs face in practice. neighbors The indicators on enforcing contracts and trading across borders are the requires 10 procedures, takes 17 days and third globally and rank 27 places below ones where on average Mozambique costs 120.5% of income per capita — does the SADC average. outperforms its neighbors. The country’s not come close to the regional SADC average score on contract enforcement average of 7.9 procedures, 27.4 days and While national regulations determine is 54.16 points, more than 5 points 35.3% of income per capita. a significant part of the score for the higher than the average for Sub-Saharan quality components, areas of provincial Africa.16 Mozambican courts resolve The quality components on the and municipal competence also play a commercial cases in just over 20 months registering property and enforcing key role. A case in point can be observed on average — over a month faster than in contracts indicators have room in the quality of land administration Sub-Saharan Africa. The average location for improvement when compared index, which measures management in Mozambique also performs particu- globally of cadastral records at the municipality larly well against countries that have a When compared globally, the quality and accessibility of information in the similar legal tradition, as represented by of property registration and contract provincial property registry. Measures the Community of Portuguese Language enforcement — the only two measured implemented at the local level can Countries (CPLP).17 Resolving a commer- indicators with a quality compo- improve the quality of land services cial dispute in the average Mozambican nent — has room for improvement. provided to entrepreneurs. Locations location takes a year less than the CPLP For contract enforcement, the quality score between 7 and 10 out of the 30 average and is considerably less expen- of judicial processes index captures possible points. Tete (10 points) and sive — 35.1% of the claim value, compared good practices in the court systems Sofala and Zambezia (9 points each) are with the CPLP average of 45.9%. On across four areas: court structure and among the top performers in the index, trading across borders, the average proceedings, case management, court due to the progress they have made in performance in Mozambique (68.37 automation and alternative dispute digitizing the municipal cadastre and points) surpasses that of its neighbors, resolution. Despite being slightly ahead implementing a geographic information as represented by the Southern Africa of the SADC average, Mozambique has system. Cabo Delgado, Gaza, Maputo Development Community (SADC), by ample room to converge with interna- City and Nampula (7.5 points) stand out nearly 7 points.18 With an average 41 tional good practices — especially those on transparency because their property hours of border compliance times for related to better case management and registry commits to deliver a legally imports, Mozambican ports perform court automation. There is no electronic binding document proving ownership nearly three times faster on average than filing, payment of court fees or service within a specific deadline. Meanwhile, SADC economies trading by sea (151 of process (this must be done in person Inhambane, Manica and Niassa have the hours), and customs procedures at the within the city by the court officer). The lowest score (7 points). These provinces port take on average 18 hours — consid- law imposes no limits on the number of keep a paper-based records system and erably faster than SADC economies adjournments that a judge can grant in lack transparency. importing by sea (51 hours). Border each case, which contributes to delays compliance when importing through in resolving the dispute. On the quality of Entrepreneurs in Mozambique must Ressano Garcia (9 hours) is also six land administration index, Mozambique go through many steps to start a times faster than in comparable SADC lags behind its regional peers (figure business and register property economies importing by land (54 hours). 1.4). Although the government has Lastly, a closer look at business start-up Conversely, in registering property, the made strides in improving the digitiza- and property registration reveals that Mozambique average is 3 points lower tion of cadastral plans and ownership entrepreneurs in Mozambique must go than the regional SADC average (56.22). records by launching platforms that through many steps to complete each Despite being faster and less expensive allow for digital bookkeeping, more can process. When considering the average than its neighbors, Mozambique has be done to increase transparency and for the 10 provinces, Mozambique is a more cumbersome process and lags communication between registries and among the 12 economies globally where on the quality of land administration municipalities. On this index, the average starting a business is most complex, index. Mozambique also lags in starting performance for provinces across trailing its regional peers (figure a business. Even Maputo City — the top- Mozambique would score in the bottom 1.5). The complexity of registering a performing province, where the process company — together with the steep fees 8 Doing Business IN MOZAMBIQUE 2019 FIGURE 1.4  Quality of regulation: Mozambican locations perform slightly better than their regional peers in enforcing contracts but not in registering property Ranking on quality indices (1–190 economies) 1 SINGAPORE, THE NETHERLANDS GLOBAL KAZAKHSTAN, CHINA (BEIJING) GLOBAL LITHUANIA, RWANDA BEST BEST RWANDA 20 TAIWAN, CHINA 40 60 MOZAMBIQUE ESWATINI KENYA CABO VERDE Maputo City, Nampula, Sofata, Tete 80 KENYA SOUTH AFRICA NIGERIA 100 ESWATINI Average MOZAMBIQUE SADC CPLP, MADAGASCAR, SOUTH AFRICA, SADC 120 CABO VERDE, ZIMBABWE Tete Cabo Delgado, Gaza, Inhambane, Manica, Niassa, Zambezia SSA, ZIMBABWE SSA Sofala, Zambezia 140 Average TANZANIA CPLP, TANZANIA NIGÉRIA Cabo Delgado, Maputo City, Gaza, Nampula Inhambane, Manica, Niassa 160 SÃO TOMÉ AND PRÍNCIPE 180 Registering Enforcing property contracts CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Rankings are based on the ease of doing business score, which shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in Mozambique 2019.” The average for Mozambique is the average of the locations measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. (Timor-Leste is excluded from the CPLP average as it remains a “no practice” economy in the area of registering property.) for publishing its articles of association —  automation. Ten years ago, transferring In trading across borders, Mauritius has are the main obstacles. The large number property in Rwanda took more than a streamlined the clearance process for of steps required to register property (on year; today, thanks to the web-based both exports and imports by enhancing average 7.4) also weigh on Mozambique’s Land Administration Information System its risk-based management system, performance for registering property. implemented in Kigali, the process improving the portal that connects Port Complex procedures are especially seen takes only a week. Rwanda also made Louis with all relevant stakeholders and during the due diligence phase (property contract enforcement easier by imple- enabling advanced electronic document tax certificate, ownership certificate) menting an electronic filing system for submission. and the postregistration phase (update initial complaints and introduced an of fiscal and urban cadastres). Only one electronic case management system for quarter of the 190 Doing Business econo- judges and lawyers, making judgments in COMPARING REGULATIONS mies have more procedures. commercial cases available to the public ACROSS THE COUNTRY19 through publication on the judiciary’s Local top performers also have room website. In starting a business, several Starting a business to improve and learn from global economies in the region (Burkina Faso, Much of the private sector in Mozambique good practices Cabo Verde, Cameroon, Côte d’Ivoire, remains informal. Approximately 40% of Rwanda could serve as a role model Djibouti, Gabon, Madagascar and Togo) the country’s GDP is currently produced in registering property and enforcing have simplified the registration process in the informal economy — about average contracts, especially as Mozambique by enabling notices of incorporation to be for Sub-Saharan Africa, where levels of steers toward digitization and higher published on the one-stop shop website. informality are among the highest in the EXECUTIVE SUMMARY 9 FIGURE 1.5  The large number of procedures required to start a business and transfer press. Manica’s meanwhile, does not property puts Mozambique behind its peers have representatives from most of the 18.3 agencies involved in the process of Procedures opening and operating a company like (number) the one in the Doing Business case study 15.4 7.4 14.0 (such as the company registry, the tax 13.6 authority, the National Social Security 6.7 Institute and the Provincial Directorate of 6.1 Labor, Employment and Social Security). 6.2 Registering property In terms of time, entrepreneurs outside of Maputo City take at least twice as long 10.9 to start a business as those in Maputo 8.7 City, mainly because of the delay to 7.9 Starting a business 7.4 publish the company’s articles of asso- ciation in the official gazette. Because the national printing press is located only in Mozambique CPLP SADC SSA Maputo City, entrepreneurs across the CPLP = average for the Community of Portuguese Language Countries country must send a hard copy of the SADC = average for the Southern African Development Community publication abstract via post as well as SSA = average for Sub-Saharan Africa provide a digital copy, adding two weeks Source: Doing Business database. to the process. Starting a business in Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. (Timor-Leste is excluded from the CPLP average as it remains a “no Mozambique is expensive, ranging from practice” economy in the area of registering property.) 68.4% of income per capita in Cabo Delgado to 132.8% in Zambezia. On world.20 People who work in the informal income per capita. In Nampula the same average, fees for registering a company sector lack access to legal protection, process requires 11 procedures over 40 and publishing its articles of association social security and pension benefits. days at a cost of 130.9% of income per in the official gazette account for 95% Informal businesses have no access to capita; this is among the seven slowest of the cost of starting a business. The formal finance and may find it difficult places in Sub-Saharan Africa. Only in cost of publishing the company’s articles to recruit skilled labor. The starting a Maputo City can entrepreneurs complete of association is the main driver of cost business indicator measures the number the process in 10 procedures. Because the variation. In provinces where entrepre- of procedures, time, cost and paid-in company registry has a representative of neurs publish a “simplified abstract” of minimum capital required for domestic the national printing press on its prem- the articles of association, such as Cabo small and medium-size limited liability ises, it takes only one step to register the Delgado, Gaza and Tete, publication companies to formally operate. Reforms company and publish its articles of asso- costs are half that of the provinces that making it easier to start a business (such ciation in the official gazette. publish the complete text. as lowering the cost and complexity of registration) as well as better enforce- Starting a business is the area that Registering property ment of the regulations are associated has had the most reforms across the The registering property indicator with lower levels of informality.21 country but room for improvement measures the strength of institutions remains that ensure property rights. It records the Starting a business in Mozambique All provinces have implemented “one- full sequence of procedures necessary takes a week longer, requires three stop shops” (Balcão de Atendimento for a business to purchase a property more steps and costs more than Único, BAÚ), but despite the promising with a registered title from another busi- three times the average among the name, none of these locations house all ness and to transfer the property title SADC economies the agencies that an entrepreneur needs to the buyer’s name. The indicator also The process in Mozambique takes an to visit to open a company. The one-stop includes an index measuring the overall average of 10.9 procedures and 35.2 days shops in Maputo City and Tete are the quality of land administration systems. at a cost of 111.2% of income per capita, most complete, grouping officials from Providing an efficient, transparent and with no paid-in minimum capital require- five out of six public agencies involved affordable system to register new titles ment (figure 1.6). Starting a business in the business startup process22 as and transfer existing ones is an important is easiest in Maputo City, requiring 10 measured by Doing Business; still, they first step toward guaranteeing secure procedures, 17 days at a cost of 120.5% of lack the presence of the national printing access to land and improving access to 10 Doing Business IN MOZAMBIQUE 2019 FIGURE 1.6  It is more time-consuming, more expensive and more burdensome to start points in Inhambane, Manica and Niassa a business in provinces in Mozambique than in comparable countries to 10 points in Tete, out of a maximum of 30. The municipality of Tete stands out Cost Time (% of income per capita) because it has digitized most of its cadas- (days) 40 tral plans and uses an electronic database for recording boundaries and checking 35 111.2% plans and cadastral information. SADC 7.9 procedures and 27.4 days 30 35.3% Mozambique Enforcing contracts 25 19.9 procedures and 35.2 days This indicator focuses on the time and cost SSA 44.4% to resolve a commercial lawsuit between 7.4 procedures and 23.3 days 20 two domestic businesses through the 40.1% filing, trial and enforcement stages before 15 CPLP the competent court.23 Economies with 8.7 procedures and 17.7 days 10 more judicial good practices in place have higher levels of domestic credit provided 5 to the private sector.24 In Mozambique emerging evidence indicates that large 0 0 2 4 6 8 10 12 industries are showing some resilience Procedures to the ongoing economic downturn, (number) but the rest of the private sector faces CPLP = average for the Community of Portuguese Language Countries reduced growth and more difficult access SADC = average for the Southern African Development Community to credit.25 Weak contract enforcement SSA = average for Sub-Saharan Africa keeps firms from formalizing26 and Source: Doing Business database. causes credit to be rationed, as banks fear Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. that they cannot enforce collateral.27 The indicator also includes an index assessing credit. This is particularly relevant for cost of 5.2% of the property value. In the overall judicial infrastructure. Mozambique, which since the end of the Sofala the same process takes more civil war continues to grapple with issues than twice as long and costs 6.2% of the Court efficiency varies throughout of land allocation and first registration of property value. Zambezia benefits from a Mozambique due to differences in a title. While not focusing on first alloca- speedy approval process for paying the adjournment practices at the trial tion of rights, the registering property transfer tax and a faster cadastral update and judgment phase, delays to set indicator examines aspects that are key to because both steps can be authorized by hearing dates and variations in continued land tenure security. The land municipal planning officials instead of by attorney fees registry loses its value if the system does the mayor (figure 1.7). Mozambique’s It takes an average of 612.5 days and not reflect all transfers of title. Inefficient average performance on time and costs 35.1 % of the claim value to procedures for ownership transfers can cost is better than the average for the resolve a commercial dispute across discourage registration, undermining SADC economies. The longest delays Mozambican provinces. The process is institutions that ensure secure land rights. in Mozambique — and the main source easiest in Manica, which has the second of variance in time — are found in steps shortest total time (380 days) and the Transferring property is a lengthy done at the municipality, particularly lowest attorney fees (10% of the claim and cumbersome process involving obtaining the property tax certificate value). Manica also has relatively effi- several visits to the municipality, (certidão matricial), paying the transfer cient internal procedures. Scheduling notary, property registry and, in tax (SISA) and updating the urban conflicts are rare compared with other some locations, the local branch of and fiscal cadastres. With the transfer provinces, and scheduling a hearing takes the tax authority tax and registration fees regulated by only two weeks — a month faster than in An entrepreneur must go through seven national legislation, differences in cost the average of the other provinces. Being or eight procedures, wait on average 47 are mainly driven by postregistration a province with lower economic activity days and pay 5.7% of the property value procedures done at the municipality, may be one reason behind speedy trials; to complete the transfer. Registering such as the update of the urban cadastre. outside the main business cities there are property is easiest in Zambezia, where On the quality of land administration fewer commercial cases, or these tend to it takes seven steps and 39 days at a index, Mozambique’s scores range from 7 be less complex. Resolving a commercial EXECUTIVE SUMMARY 11 FIGURE 1.7  It takes double the time to transfer property in Sofala than in Zambezia Time (days) Total time in Sofala: 83 days 80 Sofala 70 30 * Zambezia 60 Procedure at the municipality * 50 Total time in 15 Zambezia: 40 39 days 4 7* 30 10 * 7 5 20 10 3 * 10 10 7 * 7 days 3 * * Simultaneous with previous procedure 0 (in both provinces) 1 2 3 4 5 6 7 Procedure Source: Doing Business database. Note: The procedures and the agencies reponsible for their execution are the same in both provinces from procedures 3 to 7. dispute is more difficult in Maputo City, resolving a commercial dispute — from When it comes to court and enforce- where enforcing contracts takes the 21.8% of the claim value in Manica to ment fees, Mozambique is the fourth longest time (950 days) — placing the 60.9% in Tete — is largely driven by most expensive of the nine CPLP econo- province among the bottom 30 econo- attorney fees, which range from 10% mies — after Angola, Guinea-Bissau and mies globally in length of time — and is of the claim value in Manica to 49% in São Tomé and Príncipe (figure 1.9). This expensive (costing 53.3% of the claim Tete. Lastly, provinces in Mozambique means that an entrepreneur wishing to value), with high attorney fees (35%). score on average only 7.6 of 18 possible enforce a judgment in the Mozambican Poorly functioning courts in Maputo City points on the quality of judicial processes courts will pay 12.6% of the value of the have a disproportionate impact given index, due to weak case management case for the payment of these costs (5.1% the concentration of businesses within and limited court automation. Maputo for court costs and 7.6% for enforce- that province’s jurisdiction: almost two- City, Nampula, Sofala and Tete score ment costs) — nearly twice as much as thirds of firm growth in the past decade higher due to the existence of specialized in Portugal. This is without counting the happened in the Maputo area.28 Providing commercial court divisions. attorney fees, which in Mozambique local businesses with the ability to amount to 22.4% of the claim amount. enforce contracts swiftly and effectively Although resolving a commercial is especially critical there and in other dispute is two and a half months faster Trading across borders major economic centers. in Mozambique than in the SADC, there Facilitating trade fosters the participation is still room for improvement toward of small and medium-size companies The trial and judgment phase is where best practices. In Rwanda, where Kigali is in international commerce, generating performance varies the most — from equipped with four commercial courts to economies of scale and enabling their about four months in Tete to five times deal with a wide range of cases, an elec- integration in regional and global value longer in Maputo City. The Provincial tronic filing system for initial complaints chains. Trade has always been a funda- Court of Tete has had success in imple- and an electronic case management mental part of life in Mozambique, given menting specialized divisions. These system for judges and lawyers, the the country’s strategic location along divisions — also set up in Inhambane process takes less than one year. That Africa’s southeastern coastline. Almost and Sofala — have allowed for a more is just over nearly a third of the average a third of Mozambique’s trade is with equitable and specialized distribution of time in Mozambique and about a fourth its closest neighbors. In 2017 exports to case dockets. The disparity in the cost of of the time in Maputo City (figure 1.8). SADC economies accounted for 30.7% of 12 Doing Business IN MOZAMBIQUE 2019 FIGURE 1.8  Mozambique tends to enforce contracts faster than its regional peers, but points, Mozambique as a whole would some economies in the region are six months to one year faster rank in the bottom 30 on this indicator component. Time to enforce a contract (days) 987 Average 950 Maputo City The implementation of the electronic (slowest in single window has been instrumental Mozambique) in reducing the time and cost to comply with all documentary 687 Average requirements for exporters and 655 Average 612 Average importers in Mozambique Traders spend an average of 35 hours to complete all documentary requirements 410 Zimbabwe* 425 Cabo Verde* for exports and 27 hours for imports, 348 Tete compared with 52 hours for exports (fastest in and 60 hours for imports in the SADC Mozambique) 228 South Sudan* economies. Even Nacala (48 hours) and Beira (36 hours) — Mozambique’s worst performers in export and import documentary compliance, respec- Mozambique SSA SADC CPLP tively — perform above the regional * Fastest economy within the respective group. SADC average (64 hours for exports and CPLP = average for the Community of Portuguese Language Countries 57 for imports). Enhancing the electronic SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa single window and deepening regional Source: Doing Business database. integration may further facilitate trading Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages across borders. are based on economy-level data for those economies. Mozambican total exports, while imports traders in Mozambique when importing THE WAY FORWARD from SADC represented 32.2% of total by sea (figure 1.10). In fact, all four loca- imports to Mozambique. The country’s tions measured in Mozambique would Good rules create an environment where trade performance is also important to rank in the last quartile of all economies new entrants with drive and good ideas its neighbors, since Mozambique serves on border compliance costs for imports.29 can get started in business and where as a port of entry and transit corridor for Fees related to the electronic single good firms can invest, expand and create products flowing in and out of nearby window system for international trade new jobs. The objective is to encourage landlocked. The trading across borders (Janela Única Electrónica, JÚE) and the regulation that is designed to be efficient, indicator measures the time and cost cargo scanner impose a heavy burden on accessible to all and simple to implement. (excluding tariffs) associated with three traders; on average they make up nearly Onerous regulation diverts the energy sets of procedures — documentary 30% of the border compliance cost for of entrepreneurs away from developing compliance, border compliance and imports. Time to comply with border their businesses. But regulation that is domestic transport — within the overall requirements for exports vary from 52 efficient, transparent and straightforward process of importing and exporting. hours in Beira to 140 hours in Nacala. The facilitates business entry, expansion variation is driven mostly by differences and innovation and makes it easier for It is easiest to trade through the in efficiency in customs procedures and aspiring entrepreneurs to compete on an Ressano Garcia land border crossing dwelling times at the port.30 Exporters face equal footing. due to streamlined terminal handling long delays to complete border compli- The port of Nacala, on the other hand, ance procedures — especially in Nacala, Benchmarking exercises like Doing scores the lowest because of longer as customs clearance takes place mostly Business in Mozambique 2019 can moti- times to complete customs procedures the Special Export Terminal, located 14 vate governments to reform. They reveal and longer container dwelling times. High kilometers from the port. In the other areas where obstacles exist and highlight costs for border compliance — which ports, border compliance procedures are opportunities for improving the quality includes dealing with customs regu- handled at the exporter’s warehouse or and efficiency of regulations. Policy lations, inspections and terminal other legally recognized terminals. With makers in Mozambique could start by handling — are the main obstacles for an average doing business score of 37.58 taking advantage of the findings of this EXECUTIVE SUMMARY 13 FIGURE 1.9  Court and enforcement fees in Mozambique are higher than in several countries with a similar legal tradition Portugal 6 .5 6.5 Total cost (% of claim value) Timor-Leste 4 3.5 7.5 Brazil 7 1.1 8.1 Equatorial Guinea 5.5 4 9.5 Cabo Verde 3 6.8 9.8 Mozambique average 5.1 7.6 12.7 Guinea-Bissau 12 1 13.0 Angola 22.2 22.2 São Tomé and Príncipe 6.5 15.7 22.2 Court costs Enforcement costs Source: Doing Business database. Note: The average for Mozambique is the average of the 10 provinces measured. subnational study to understand the from 174 to 17 days, cutting the cost of the benchmarked provinces it takes more sources of local variations and replicate transferring property from 12% to 5%, than three months for judges to render the good practices identified locally, introducing commercial courts and judgment — six times the legal time limit. regionally and globally. Comparisons streamlining documentary compliance Enforcing time limits would save the between locations in the same country for imports and exports in Maputo. court and its users time, resources and can be strong drivers of reform, because These successful experiences could be increase accountability. Automation of it is more difficult for local governments replicated nationwide. procedures, staff training and an effective and policy makers to justify why doing communication strategy for the public business in their city or province is Common themes could help ensure that deadlines are more burdensome than in neighboring A gap between the introduction of adhered to both by the judiciary and the locations. Even small administrative reforms and implementation on the lawyers, and that reforms are publicized, improvements that do not require major ground is evident across the country. rolled out and implemented, instead of regulatory changes can make a big differ- Several regulatory improvements remaining on the books unnoticed. ence in the life of a small or medium-size have been introduced but have yet to firm. be fully implemented Information on regulatory processes A recent example is the business is diffuse and hard to access, making Promoting peer-to-peer learning would licensing reform that introduced the it difficult to implement reforms provide opportunities for national, license by simple notice (mera comu- beyond Maputo City provincial and municipal policy makers nicação prévia), removing the cost and Along with implementing an outreach to share their good practices in some reducing the time for obtaining a business campaign, Mozambique must improve areas while learning from others about license.31 In theory, one-stop shops in all public access to laws and regulations what has worked better elsewhere. The provinces can issue the license by simple must be improved at the subnational results would benefit all. Designing and notice. However, only in Cabo Delgado, level. To consult laws in Mozambique, implementing a reform plan to improve Inhambane, Manica, Maputo City and lawyers, entrepreneurs and even judges the business climate in a country can Niassa do entrepreneurs prefer using this need to go in person to the national be a challenging task, one that requires procedure. In Sofala, Tete or Zambezia printing press archives (Imprensa the participation of multiple government few such licenses have been issued since Nacional de Mozambique), located in agencies as well as coordination efforts the law went into effect. In Gaza and Maputo, or request a copy of a law in and technical capacity. The government Nampula the one-stop shop does not writing — both for a fee. Moreover, prop- of Mozambique has started to make have experience in processing a simple erty registries and municipalities do not important strides in this direction with notice, and entrepreneurs are unaware make information on fee schedules or the implementation of reforms. As the that they can apply for this new simpli- documentary requirements for property global Doing Business study has docu- fied license. As for enforcing contracts, transactions publicly available. Providing mented, these reforms were responsible time limits for some legal proceedings accessible, user-friendly information on for reducing the time to start a business go mostly unenforced. In practice, across regulations and procedures is important 14 Doing Business IN MOZAMBIQUE 2019 FIGURE 1.10  Except for Ressano Garcia, the highest costs are found in the process to comply with customs and port procedures when importing Ressano Garcia 70 245 315 Cost to export (USD) Beira 170 335 505 Mozambique 135 441 576 Maputo 160 500 660 South Africa 60 666 726 SSA 169 606 775 Nacala 140 685 825 SADC 195 654 849 Durban 55 1,257 1.312 Documentary compliance Border compliance Ressano Garcia 60 399 459 Cost to import (USD) Durban 73 676 749 South Africa 73 676 749 Mozambique 112 649 761 Nacala 125 670 795 SADC 188 636 824 Beira 140 710 850 Maputo 125 815 940 SSA 283 684 967 Documentary compliance Border compliance CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The average for Mozambique is the average of the 4 trade locations measured while the SADC and SSA averages are based on economy-level data for those economies. in all areas of business regulation — and it requirement — a relic of the days when Code of Judicial Costs of Mozambique. does not necessarily require substantial newspaper announcements were the With more than 200 articles,33 it is more resources. Where applicants lack such only way to ensure that the public had than six times lengthier than similar information, they have greater difficulty notice of new companies setting up national legislation in Portugal and state- holding government bodies accountable, shop — is no longer observed in most level legislation in Brazil, with a combined a situation that fosters informality and countries. Similarly, fee schedules for average of 37 articles. corruption. notary services and company registra- tion have been updated twice in the last Despite the various reforms to improve While most laws governing business 20 years, but they continue to follow the it, Mozambique’s licensing regime still regulations have been updated same complicated structure found in falls short when compared with best in the last 20 years, some fail to mid-20th century Portuguese law. Fees global practices. Business licenses are capture longstanding good practices for business and property registration still required for all companies to operate and instead maintain antiquated are covered in several scattered articles in Mozambique, even those performing regulations compiled in extensive laws, leaving ample low-risk activities. Global best practice is To incorporate a company, publica- room for interpretation. Difficulties in to take a risk-based approach and require tion of the articles of incorporation is interpreting the law lead to different fees licenses only for activities that pose risk to still required by law and stands as a being charged across Mozambique for public health, safety or the environment. major bottleneck in the process.32 This the same service. A case in point is the In terms of international trade, a customs EXECUTIVE SUMMARY 15 broker is legally required in Mozambique process of company incorporation, effi- which would provide direct revenue for and is the only clearing agent who can ciency gains will be a result of increased municipal coffers. The government of submit a customs declaration in the single coordination and information sharing, Mozambique is trying to improve its window.34 Global best practices compiled either automated or manual, among infrastructure by revising legislation and by the World Trade Organization’s Trade agencies. introducing pilot tests for new systems. Facilitation Agreement (WTO-TFA), Building capacity at a local level will be which Mozambique ratified in 2017, Reducing the regulatory burden for key to the success of ambitious reforms dictate that there should be no such companies will also require building in the pipeline — especially the introduc- requirement. And as for contract enforce- subnational capacity to deliver tion of the electronic land registration ment, judges still perform unnecessary business regulation services system property registration system administrative tasks such as organizing This would facilitate the implementation (SIRP, Sistema Integrado de Registo); the and presiding over the public sale of the of reforms beyond Maputo City. Lack of initiative to install an electronic court debtor’s assets — steps that could be capacity presents itself in two areas: infra- case management system for judges exclusively undertaken by administrative structure and human capital. In enforcing and lawyers; and the development of an staff or specialized auctioneers. Reducing contracts, there are not enough trained electronic one-stop shop to integrate the the number of nonjudicial functions that clerks to support judges in administrative systems of the different agencies involved judges are required to perform would tasks and no regular program for judge in the process of opening a business. help them redirect their efforts toward and clerk training. Additionally, insuf- improving the efficiency of resolving ficient or misallocated funding for the What can be improved in each disputes. transfer and placement of judges results area? in positions being unfilled for months at To complement the reforms addressing Promoting greater coordination a time. Between 2017 and 2018, the time cross-cutting issues, the government of between municipal, provincial and to resolve cases in the civil division of the Mozambique would also benefit from national governments can result in Provincial Court of Zambezia increased, improvements that are specific to each efficiency gains in business start-up largely because there was no judge to topic measured by Doing Business. Each and property registration hear civil and commercial disputes for topic chapter under the “What can be Agencies in these areas tend to work in eight months.36 improved?” section identifies opportuni- silos, making processes more burden- ties for improvement and global good some for entrepreneurs. For property In terms of infrastructure, most practices that can guide the way forward registration, municipalities and registries procedures are done manually (table 1.3). Some of these reforms include do not share information on ownership; across indicators, and in most administrative changes that can be property owners must visit the two agen- agencies employees share the use of implemented in a short period of time. cies to complete all requirements for computers Others may be more complex and require registration. Improving communication At the ports, despite the presence of an more financial and human resources, between the agencies would help reduce electronic single window, authorities in addition to more technical capacity. interactions with the public, cutting steps continue to require paper documents. Cross-cutting issues emerge that require and costs. Most importantly, it would Courts are not automated, and the leadership from national and local policy enhance the quality of the land adminis- database of property ownership is kept makers; these include a lack of coordina- tration system by helping both databases in books, and courts are not automated. tion among agencies and limited capacity stay up to date. In starting a business, lack In the ports, despite the presence of an at the subnational level to implement of coordination still stands in the way of electronic single window, authorities more reforms locally. efficiency. In the provinces where starting continue to require paper documents. a business is easiest — Maputo City and On land management, a geographic Starting a business Tete — one-stop shops house five of the information system for urban and Starting a business could be made agencies35 entrepreneurs must engage rural land developed in 2012 by the more efficient by streamlining the back- with to start a company. These agen- Ministry of Land, Environment and Rural office workflow of the one-stop shop is cies, however, have not fully integrated Development (MITADER) is fully opera- streamlined and integrating institution’s their front- and back-office operations. tional in only three provincial capitals. procedures. In 2014 the government Ideally, the one-stop shop should receive As they build capacity, local govern- of Mozambique launched the e-BAÚ the application and circulate it internally ments will also have more autonomy to system, an integrated platform for service to each agency. As evidenced in other implement reforms. The municipality of delivery that aims to connect the one- countries, while implementing a one-stop Lichinga, for example, still does not have a stop shops and other institutions relevant shop may be a first step in simplifying the system set up to collect real estate taxes, for business startup. Nonetheless, the 16 Doing Business IN MOZAMBIQUE 2019 platform is currently being used for than the mayor. Municipalities should their caseloads. Lawyers are still not business licensing only. Further imple- consider leveraging the SiGIT (Sistema connected to the system. This initiative mentation of the e-BAÚ platform will de Gestão de Informação sobre Terras em could be replicated across the country improve communication between the Moçambique) to create a database of and expanded to the Civil Court divisions. various government agencies; allow for a property values and automate property single access point for all the procedures assessments. Linking it to the future To better understand bottlenecks, needed to register a company; provide registrars’ database (SIRP) would estab- carrying out a process-mapping exercise information on requirements for starting lish quick and reliable access to cadastral to analyze the dynamics of how cases a business, such as what fees apply; plans, ownership data and tax records, are handled internally will help to diag- and could even introduce the possi- and ensure automated updates and nose inefficient procedures, from filing bility of making electronic payments, or streamlined communication between the to enforcement. Process mapping should publishing a company’s articles of asso- agencies. To benefit from the electronic be followed by the relevant reforms to ciation or the basic information on each system, registries also need to digitize all the Code of Civil Procedure, given that company registered, at no cost. In the their ownership records. the existing unnecessary procedures long run, greater time efficiency could be achieved by having a company registra- tion process that is completely online. Some of the recommended reforms include administrative changes that can be implemented in a short period of time. Registering property In registering property, transparency in the urban land management system Enforcing contracts stem from statutory requirements. should be reinforced. Municipalities and In enforcing contracts, access to court Reducing the number of nonjudicial land registries have fee schedules, but decisions is central to a well-functioning functions that judges are required to these are mostly incomplete and not judiciary and key to a strong investment perform would help judges redirect their publicly accessible. To make information climate. Mozambique has no systematic efforts toward improving the quality of accessible, municipalities could publish way of making judgments in commercial judgments by concentrating on adjudi- fee schedules and distribute brochures. cases at all levels available to the public. cation. Additionally, an institutionalized Until 2016 Maputo City distributed a Making judgments available does not country-wide program to continuously brochure with guidance on the process, necessarily require substantial resources, train support staff would help bridge which specified the documents that but it does require internal organization, the current deficits found in internal needed to be delivered, the fees and the such as deploying a centralized govern- case processing throughout the trial and expected time frame. When notary and ment gazette database made available enforcement phases. To achieve an effi- registry fees were updated in 2016, the online to the public. Laws could also be cient judiciary, it is critical to have judges brochure became obsolete and fell into published and freely accessible at the that deliver. For this to happen, judges disuse. Provinces should also consider national level on the websites of the not only require adequate resources, but consolidating property transaction government portal (Portal do Governo) they also need to be held accountable information on property transaction or the national press’ website. To improve for timeliness and quality of service. One from provincial and municipal agencies court efficiency, reduce trial and judg- way to increase judges’ accountability is and making it available. To improve effi- ment time, and make legal services by implementing periodic judicial inspec- ciency, municipalities can streamline the more affordable, improvements to the tions and compiling and disseminating transfer tax payment, which currently is case management system would be performance statistics. a major bottleneck to transfer property. key. Case tracking, would allow the The transfer tax is an important source court to screen and categorize cases to Trading across borders of revenue, and the process of paying it manage them strategically.37 While it is In trading across borders, an efficient should not discourage businesses from too early to have had any pronounced risk-based management system can participating in the formal economy. impact on time, a pilot program that help streamline customs procedures. Under Mozambique’s Municipal Tax integrated judicial process management Currently, almost all consignments are Code, the mayor is entrusted with the systems (SIGAJUS) is being rolled out subjected to physical inspection. While review and approval of the assessment of and was implemented in the second compliance issues with traders, customs the property value, which in turn deter- commercial division of the Maputo City brokers and forwarding agents exist in mines the tax to be paid. To streamline Court, enabling court officers and judges Mozambique,38 it is essential to devise a the process, this requirement should fall to search all commercial cases in the balance between enforcement and trade to an expert in property valuation, rather database and deal more efficiently with facilitation. To do so, the tax authority EXECUTIVE SUMMARY 17 could improve its automated risk- dredging to allow the port to remain in management system by more precisely operation. The long times recorded for defining the criteria used to assess risk domestic transport are also related to within the electronic single window. truck congestion due to poorly main- Despite having a working electronic tained access roads and entrances. single window, Mozambique falls short of reaping its full benefits. Moving toward a paperless trade environment would cut time, avoiding delays in clearing consignments that occur while waiting for the relevant paper documentation. To take full advantage of the electronic single window, Mozambique could electronically link more stakeholders to the platform. Mozambique could also remove the mandatory use of customs brokers. According to WTO-TFA prin- ciples, the use of customs brokers should not be mandatory. Mozambique could enable traders to be registered as users of the electronic single window and provide training so that they can input the relevant data for their transactions directly into the system. Costs associated with complying with border requirements are likely to be reduced; overall, traders in Mozambique must pay heavy adminis- trative fees, specifically those charged by the electronic single window and scanner. Border compliance procedures could be enhanced by strengthening regional inte- gration. Despite its strategic location,39 Mozambique has yet to achieve a high level of regional cooperation and regional trade.40 Among all Mozambique’s land border crossings with its neighbors, Ressano Garcia is the only one with a one-stop border post. Sharing informa- tion, avoiding duplicate procedures and conducting joint inspections are among the benefits of border coop- eration. Mozambique may strengthen regional integration by participating in customs union agreements. Lastly, focus should also be placed on upgrading trade logistics infrastructure to reduce delays and transaction costs as well as increase traffic volumes, enhancing competitiveness. Deficient infrastructure is a common concern for all the ports analyzed; for example, in November 2017 Beira port had to do an emergency 18 Doing Business IN MOZAMBIQUE 2019 TABLE 1.3  Summary of reform recommendations to improve the ease of doing business across Mozambique Suggested reform Locations that have partially or fully imple- Key players to champion the reform Implementation timeframe mented the reform Starting a business Improve the implementation of Cabo Delgado, Inhambane, Manica, Maputo City, • Ministério da Indústria e Comércio Short term the license by simple notice at Niassa. • BAÚ the one-stop shop Reduce the cost and remove Partially implemented by Cabo Delgado, Gaza and • Ministério da Indústria e Comércio (MIC) Short to medium term or streamline the process of Tete as the publication of the simplified abstract is • National printing press publishing the articles of asso- common practice • BAÚ ciation in the official gazette • Company registry Simplify the current fee sched- Not present in any of the provinces • Company registrars and notaries Creating a table with fees in the ules for company incorporation • Ministério da Indústria e Comércio short term; simplifying legislation in and make them publicly avail- • BAÚ the medium to long term. able at the company registries and online Improve coordination among Not present in any of the provinces • Ministério da Indústria e Comércio Medium to long term stakeholders and enhance • BAÚ back-office workflow in one- • Company registrars and notaries stop shops • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving Not present in any of the provinces • Ministério da Indústria e Comércio Long term the implementation of the • BAÚ e-BAÚ and introducing online • Company registrars and notaries procedures • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Registering property Reinforce transparency in the Not present in any of the provinces • Ministry of Justice, Constitutional and Religious Producing a brochure with compiled land administration system Affairs information as well as producing • Property registrars and notaries a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules Not present in any of the provinces • Property registrars and notaries Creating a table with fees in the for registration and notary ser- short term; simplify legislation, in vices at the property registries the medium to long term. and online Streamline the transfer tax Partially implemented in Quelimane, Inhambane • Ministry of Justice, Constitutional and Religious Delegation to urban land officials in payment process and Xai-Xai by delegating the review of the prop- Affairs the short term; amending legislation erty assessment to officials in the urban planning • Municipalities in the medium to long term. department. Improve coordination among Not present in any of the provinces • Ministry of Justice, Constitutional and Religious Short to medium/long term stakeholders by establish- Affairs ing communication systems • Property registrars and notaries between the property registries • Municipalities and the municipalities Increase digitization of Partially implemented in Beira, Quelimane and Tete • Ministry of Justice, Constitutional and Religious Medium to long term cadastral plans and ownership that digitalized most of their cadastral plans while Affairs records Maputo City has scanned most of their cadastral • Property registrars plans. Maputo City is the only province that scanned • Municipalities most of their ownership records Enforcing Contracts Publish laws and judgments Not present in any of the provinces although some • Ministry of Justice, Constitutional and Religious Short term judgments from the higher courts are made publicly Affairs available, either through publication in the official • National printing press gazette or on the website of the Supreme Court, • Provincial courts these are very few and cover only certain civil and criminal cases. Enhance training for judges and Not present in any of the provinces • Supreme Court While a training plan could start be- judiciary support staff • Superior appeal courts ing implemented in the short term, • Provincial courts the effects of such could be felt from the medium to the long term. Consider limiting adjournments Not present in any of the provinces • Ministry of Justice, Constitutional and Religious Short term and enforcing time limits Affairs • Supreme Court • Superior Council of the Judiciary EXECUTIVE SUMMARY 19 TABLE 1.3  Summary of reform recommendations to improve the ease of doing business across Mozambique Suggested reform Locations that have partially or fully imple- Key players to champion the reform Implementation timeframe mented the reform Increase judge’s accountability Not present in any of the provinces • Superior Council of the Judiciary Short-term through periodic judicial inspec- • Provincial courts tions and performance statistics Use process mapping to identify Not present in any of the provinces • Ministry of Justice, Constitutional and Religious Process mapping in the short term; bottlenecks in the court system Affairs the relevant reforms to the Code of • Provincial courts Civil Procedure in the medium to long term. Streamline the case manage- Partially implemented. All 10 provinces make pretrial • Ministry of Industry and Commerce Medium to long term. Approaches ment system conferences available to narrow down issues and • Supreme Court to electronic or web-based tools de- have established legal time limits for at least three • Provincial courts pend on the priorities of the judiciary key court events. Each court produces its quarterly and budget allocation and a gradual and annual performance reports. Nonetheless, with approach could be considered. the exception of a pilot project in Maputo City, there is no integrated judicial process management system in the provinces. Trading across Borders Remove the mandatory use of Not present in any of the border crossings • Customs Office (tax authority) Short term customs brokers and increasing competition in the brokerage profession Streamline customs procedures Partially implemented in Beira when exporting coal • Customs office (tax authority) Short to medium/long term and apply efficient risk-based management Fully implement the electronic Not present in any of the border crossings • Customs Office (tax authority) Creating a paperless environment single window by going pa- • Mozambique Community Network, SA (MCNET) in the short term; connecting more perless, and connect more • Ministry of Agriculture and Food Security (MASA) stakeholders in the short to medium/ stakeholders to the platform • Ministry of Industry and Commerce long term. • Ports and Railways of Mozambique (CFM) Strengthen regional integration Ressano Garcia with the one-stop border post • Ministry of Foreign Affairs Medium to long term through the effective implemen- project • Customs Office (tax authority) tation of border cooperation • Mozambique Community Network, SA (MCNET) and customs union agreements • Ministry of Agriculture and Food Security (MASA) • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) • Gestão de Terminais S.A. (GT) Upgrade trade logistics infra- Maputo and Ressano Garcia • Ports and Railways of Mozambique (CFM) Medium to long term structure with a special focus • Cornelder de Moçambique (CdM) on access roads to the ports • Maputo Port Development Company (MPDC) • Corredor de Desenvolvimento do Norte (CDN) Consider reducing administra- Not present in any of the border crossings • Customs Office (tax authority) Medium to long term tive fees • Mozambique Community Network, SA (MCNET) • Kudumba Investments Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific infor- mation on each reform, please refer to the “What can be improved?’’ section of each indicator chapter. 20 Doing Business IN MOZAMBIQUE 2019 13. In evaluating the export process, the Doing phytosanitary certification requirements to Business methodology assumes that each port be completed. While the assumptions for the NOTES is shipping its top product in export value. comparator ports consider plant products that In the case of Mozambique’s largest port, require phytosanitary certification, these also 1. World Economic Forum. 2017. The Global Maputo, this study also assesses the country’s require supervision of packing and scanning Competitiveness Report 2017-2018. Available at number two export product (sugars and sugar inspections, which are not specifically related http:/ /www3.weforum.org/docs/GCR2017- confectionery — HS 17 under the Harmonized to plant products. 2018/05FullReport/TheGlobalCompetitivenes System classification code) to complement 31. The provinces that would benefit from sReport2017%E2%80%932018.pdf. the data used in the global Doing Business time reduction in implementing the mera 2. Among the 48 economies of Sub-Saharan study, which assumes exports from Maputo of comunicação prévia are those where the time Africa, Mozambique ranks number 7 in dealing Mozambique’s top export (HS 76 — aluminum to obtain a simplified operating license is with construction permits and 8 in resolving and articles thereof). For more details, please greater than one day, such as Gaza, Nampula, insolvency. But it has low rankings in starting see Table 6.1, Case study assumptions, in the Tete and Zambezia; and as opposed to Sofala a business (174 among the 190 economies chapter on trading across borders. where obtaining such license is one day. measured by Doing Business) and in resolving 14. Gaza, Inhambane, Manica, Niassa, Sofala and 32. This requirement is established in Commercial commercial disputes through the courts (167). Zambezia. Code Decree 2/2005 of December 27. 3. Megaprojects are large-scale, complex 15. Ressano Garcia would stand at 67 globally on 33. A recent revision of the law currently being ventures that typically cost millions or trading across borders. drafted proposes to reduce the number to 187 even billions of dollars, take many years 16. The averages for Sub-Saharan Africa (SSA) are articles. to develop and involve multiple public and based on economy-level data for the 48 SSA 34. Decree No. 18/2011 and Article 82 of the private stakeholders. While they are often economies. See http://www.doingbusiness. Chamber of Customs Brokers Statute establish not major job creators, given their capital- org/en/rankings?region=sub-saharan-africa. the requirement that licensed customs intensive nature, megaprojects do generate 17. The Community of Portuguese Language brokers conduct all import, export and transit employment indirectly, either through Countries (CPLP) has 9 members: Angola, operations. infrastructure construction or through local Brazil, Cabo Verde, Guinea-Bissau, Equatorial 35. The seven entities common to all provinces firms supplying goods or services. Guinea, Mozambique, Portugal, São Tomé and are the company registry, the banks, the 4. World Bank. 2017. Mozambique Economic Príncipe, and Timor-Leste. tax authority, the one-stop shop, the Update: A Two Speed Economy. Washington, 18. The Southern Africa Development Provincial Directorate of Labor, the National DC: World Bank. Community (SADC) has 16 members: Angola, Social Security Institute and the insurance 5. Mozambique’s annual population growth Botswana, Comoros, Democratic Republic company. In all provinces except Maputo averaged 2.9% from 2000 to 2017. Fertility of Congo, Eswatini, Lesotho, Madagascar, City, entrepreneurs must also interact with rates averaged 5.5 children per woman Malawi, Mauritius, Mozambique, Namibia, the national printing press, and in Manica and between 2007 and 2016. Source: World Bank, Seychelles, South Africa, Tanzania, Zambia Gaza they must visit the public notary. World Development Indicators database. and Zimbabwe. 36. According to court statistics provided by the 6. Lachler, Ulrich, and Ian Walker. 2018. Jobs 19. Please refer to the corresponding indicator Statistics and Judicial Information Unit of the Diagnostic Mozambique. Washington, DC: chapter and the data note for more Provincial Court of Zambezia, 15 cases and 4 World Bank. information about the methodology. enforcement proceedings were closed in 2017, 7. International Labour Organization (ILO), 20. IMF Regional Economic Outlook 2017. down from 64 and 21, respectively, in 2015. ILOSTAT database. Data retrieved in 21. Bruhn, Miriam, and David McKenzie. 37. Source: Doing Business in Kenya 2016. September 2018. Available at https:/ /data. 2013. Entry Regulation and Formalization of 38. These include tariff misdeclarations, worldbank.org/indicator/SL.UEM.TOTL. Microenterprises in Developing Countries. under-invoicing, undervaluation of goods, ZS?locations=LB-MZ. Policy Research Working Paper No. 6507. misclassification and smuggling as discussed 8. Deijl, Claudia, Jan de Kok and Christi Veldhuis- Washington, DC: World Bank. in Baker, Raymond, Christine Clough, Dev Kar, Van Essen. 2013. Is Small Still Beautiful? 22. Banks and insurance companies are also Brian LeBlanc and Joshua Simmons. Hiding in Literature Review of Recent Empirical Evidence involved in the process. Plain Sight: Trade Misinvoicing and the Impact on the Contribution of SMEs to Employment 23. According to the Doing Business case study, of Revenue Loss in Ghana, Kenya, Mozambique, Creation. Eschborn and Geneva: GIZ and ILO. the competent court is the civil division of the Tanzania, and Uganda: 2002-2011. Washington 9. Number of firms per province: Maputo City specific provincial court. D.C.: Global Financial Integrity. (14,904), Maputo (5,427), Sofala (4,839), 24. Gramckow, Heike, Omniah Ebeid, Erica Bosio 39. Mozambique’s trade corridors connect its Zambezia (3,372), Gaza (3,230), Nampula and Jorge Luis Silva Mendez. 2016. Good landlocked neighbors and the Gauteng region (2,605), Inhambane (2,247), Cabo Delgado Practices for Courts: Helpful Elements for Good in South Africa to the Indian Ocean. (1,840), Tete (1,762), Manica (1,510) Court Performance and the World Bank’s Quality 40. In 2015, exports from Mozambique to other and Niassa (1,273). Based on data from of Judicial Process Indicators. Washington, DC: SSA economies amounted to 24.8% (South the recently completed business census: World Bank. Africa alone representing 18.3%), while 2014/2015 Censo de Empresas (CEMPRE). 25. World Bank. 2017. Mozambique Economic imports from SSA economies amounted to The census covers formally registered Update: A Two Speed Economy. 33.6% ((South Africa alone representing businesses only. 26. Dabla-Norris and Inchauste (2007). 30.10%). World Bank Group World Integrated 10. National Institute of Statistics (Instituto 27. Economies with a more efficient judiciary, Trade Solution. Available at https://wits. Nacional de Estatística). Available at http:// in which courts can effectively enforce worldbank.org/countryprofile/en/country/ www.ine.gov.mz/estatisticas/estatisticas- contractual obligations, have been found to MOZ/startyear/2012/endyear/2016/ demograficas-e-indicadores-sociais/ have more developed credit markets and a indicator/NE-TRD-GNFS-ZS. projeccoes-da-populacao/populacao- higher level of development overall. See, for projectada-por-distritos-maputo- example, Mehnaz Safavian and Siddharth cidade-2007_2040.xls/view. Sharma (2007). 11. For more information about the parameters of 28. World Bank. 2017. Mozambique Economic this study, the indicators selected and changes Update: A Two Speed Economy. to Doing Business indicators, see the chapter 29. On a global scale, Mozambique scores 45.96 “About Doing Business and Doing Business in points on this indicator component. Mozambique 2019.” 30. Coal exports from Beira benefit from an 12. The data in this report are valid as of expedited process as there are no supervision September 2018. of packing, scanning inspections or ABOUT Doing Business AND Doing Business IN MoZambique 2019 21 About Doing Business and Doing Business in Mozambique 2019 MAIN FINDINGS ¡ Doing Business measures aspects of business regulation affecting small and medium-size domestic firms defined based on standardized case scenarios and located in the largest business city of 190 economies. In addition, for 11 economies a second city is covered. ¡ Doing Business covers 11 areas of business regulation. Ten of these areas — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors paying taxes, trading across borders, enforcing contracts and resolving insolvency — are included in the ease of Doing Business score and ease of Doing Business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. ¡ Doing Business in Mozambique 2019 covers four of these areas: starting a business, registering property, enforcing contracts and trading across borders. ¡ Doing Business and Doing Business in Mozambique 2019 relies on four main sources of information: relevant laws and regulations, expert respondents, government authorities (national and local) and World Bank Group specialists. ¡ Doing Business data are widely used by governments, researchers, international organizations and think tanks to guide policies, conduct research and develop new indexes. ¡ There are no methodological changes in Doing Business 2019 data. 22 Doing Business IN MOZAMBIQUE 2019 D oing Business is founded on the Doing Business also measures features of in the implementation of national laws principle that economic activity labor market regulation. Although Doing across locations within an economy (as benefits from clear and coherent Business does not present rankings of in Mozambique) or a region (as in the rules: rules that set out strong property economies on the labor market regula- European Union). Projects are undertaken rights, facilitate the resolution of disputes tion indicators or include the topic in the at the request of governments. and provide contractual partners with aggregate score or ranking on the ease of protections against arbitrariness and doing business, it does present the data Data collected by subnational studies abuse. Such rules are much more effective for these indicators. Subnational Doing show that there can be substantial varia- in promoting growth and development Business studies cover a subset of the 11 tion within an economy (figure 2.1). In when they are efficient, transparent and areas of business regulation that Doing Mexico in 2016, for example, registering accessible to those for whom they are Business covers across 190 economies a property transfer took as few as 9 days intended. The strength and inclusivity of (table 2.1). These studies focus on indi- in the state of Puebla and as many as the rules also have a crucial bearing on cators that are most likely to vary from 78 in Oaxaca. Indeed, within the same how societies distribute the benefits and city to city, such as those on dealing with economy one can find locations that finance the costs of development strate- construction permits or registering prop- perform as well as economies ranking gies and policies. erty. Indicators that use a legal scoring in the top 20 on the ease of registering methodology, such as those on getting property and locations that perform Good rules create an environment where credit or protecting minority investors, as poorly as economies ranking in the new entrants with drive and innova- are typically excluded because they bottom 40 on that indicator. tive ideas can get started in business mostly look at national laws with general and where productive firms can invest, applicability. The subnational Doing Business studies expand and create new jobs. The role of produce disaggregated data on business government policy in the daily operations The subnational Doing Business studies regulation. But they go beyond a data of small and medium-size domestic firms expand the Doing Business analysis beyond collection exercise. They have proved is a central focus of the Doing Business the largest business city of an economy. to be strong motivators for regulatory data. The objective is to encourage regu- They measure variation in regulations or reform at the local level: lation that is efficient, transparent and easy to implement so that businesses can thrive and promote economic and social TABLE 2.1 What Doing Business and subnational Doing Business studies measure— 11 areas of business regulation progress. Doing Business data focus on the 11 areas of regulation affecting small and Indicator set What is measured medium-size domestic firms in the largest Typically included in subnational Doing Business reports business city of an economy. The project Starting a business Procedures, time, cost and paid-in minimum capital to start a uses standardized case studies to provide limited liability company objective, quantitative measures that can Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the be compared across 190 economies. construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs FACTORS MEASURED BY Registering property Procedures, time and cost to transfer a property and the quality of DOING BUSINESS AND the land administration system SUBNATIONAL DOING Trading across borders Time and cost to export the product of comparative advantage and BUSINESS STUDIES import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Doing Business captures several impor- tant dimensions of the regulatory Not typically included in subnational Doing Business reports environment as it applies to local firms. Getting credit Movable collateral laws and credit information systems It provides quantitative indicators on Protecting minority investors Minority shareholders’ rights in related-party transactions and in regulation for starting a business, dealing corporate governance with construction permits, getting elec- Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as postfiling processes tricity, registering property, getting credit, Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency protecting minority investors, paying and the strength of the legal framework for insolvency taxes, trading across borders, enforcing Labor market regulation Flexibility in employment regulation and aspects of job quality contracts and resolving insolvency. ABOUT Doing Business AND Doing Business IN MoZambique 2019 23 FIGURE 2.1 Different locations, different regulatory processes, same economy Time to register property (days) 80 Oaxaca (78) Isiolo (73) 60 58 Wroclaw (51) Mangaung (52) Mombasa (41) 40 33 32 26 Johannesburg Melilla (26) Bialystok (23) 20 (18) 17 Madrid Puebla (12.5) (9) 0 Kenya Mexico Poland South Africa Spain Least time Most time Average time Source: Subnational Doing Business database. Note: The average time shown for each economy is based on all locations covered by the data: 11 cities in Kenya in 2016, 32 states in Mexico in 2016, 18 cities in Poland in 2015, 9 cities in South Africa in 2015 and 19 cities in Spain in 2015. ƒƒ The data produced are comparable Africa — have undertaken two or more Business indicator sets have established across locations within the economy rounds of subnational data collection to the importance of the rules and regula- and internationally, enabling loca- measure progress over time. Recently tions that Doing Business focuses on tions to benchmark their results both subnational studies were completed in for such economic outcomes as trade locally and globally. Comparisons of Afghanistan, Colombia, the European volumes, foreign direct investment (FDI), locations within the same economy Union (Bulgaria, Hungary and Romania market capitalization in stock exchanges that share the same legal and regula- in in one report and Croatia, the Czech and private credit as a percentage of GDP.2 tory framework can be revealing: local Republic, Portugal and Slovakia in officials find it hard to explain why another), Kazakhstan and the United The choice of the 11 sets of Doing Doing Business is more difficult in their Arab Emirates. Ongoing studies include Business indicators has also been guided jurisdiction than in a neighboring one. those in the European Union (Greece, by economic research and firm-level ƒƒ Pointing out good practices that exist Ireland and Italy) and Kazakhstan. data, specifically data from the World in some locations but not others Bank Enterprise Surveys.3 These surveys within an economy helps policy Doing Business in Mozambique 2019 is the provide data highlighting the main makers recognize the potential for first subnational Doing Business study obstacles to business activity as reported replicating these good practices. This for Mozambique. It benchmarks busi- by entrepreneurs in more than 136,880 can prompt discussions of regula- ness regulations and their enforcement companies in 139 economies. Access tory reform across different levels of in ten provinces across three regulatory to finance and access to electricity, for government, providing opportunities areas (starting a business, registering example, are among the factors identified for local governments and agencies to property and enforcing contracts). It also by the surveys as important to busi- learn from one another and resulting measures trading across borders at three nesses — inspiring the design of the Doing in local ownership and capacity ports and one border crossing. Business indicators on getting credit and building. getting electricity. Since 2005 subnational reports have How the indicators are selected covered 510 locations in 75 economies, The design of the Doing Business indicators Some Doing Business indicators give a including Colombia, the Arab Republic has been informed by theoretical insights higher score for more regulation and of Egypt, Italy, the Philippines and gleaned from extensive research and the better-functioning institutions (such Serbia (figure 2.2). Seventeen econo- literature on the role of institutions in as courts). For example, in the area of mies — including Colombia, Indonesia, enabling economic development.1 In addi- protecting minority investors higher Kenya, Mexico, Nigeria, the Philippines, tion, the background papers developing scores are given for stricter disclo- the Russian Federation, and South the methodology for each of the Doing sure requirements for related-party 24 Doing Business IN MOZAMBIQUE 2019 FIGURE 2.2 Comparing regulation at the local level: subnational Doing Business studies Source: Subnational Doing Business database. transactions. Higher scores are also with the Ministry of Industry and for local entrepreneurs in an economy given for a simplified way of applying Commerce. They are based on their has changed over time in absolute terms, regulation that keeps compliance costs relevance for the country’s development while the ease of doing business ranking for firms low — such as by easing the and their ability to show variation across can show only how much the regulatory burden of business start-up formalities the locations covered. environment has changed relative to that with a one-stop shop or through a single in other economies. online portal. Finally, Doing Business scores reward economies that apply a EASE OF DOING BUSINESS Ease of doing business score risk-based approach to regulation as a SCORE AND EASE OF DOING The ease of doing business score way to address social and environmental BUSINESS RANKING captures the gap between an economy’s concerns — such as by imposing a greater performance and a measure of best regulatory burden on activities that pose The Doing Business report presents results practice across the entire sample of 41 a high risk to the population and a lesser for two aggregate measures: the ease of indicators for 10 Doing Business topics one on lower-risk activities. Thus the doing business score (formerly called (the labor market regulation indicators economies that rank highest on the ease the distance to frontier score) and the are excluded). For starting a business, of Doing Business are not those where ease of doing business ranking, which for example, New Zealand and Georgia there is no regulation — but those where is based on the ease of doing busi- have the lowest number of procedures governments have managed to create ness score. The ease of doing business required (1). New Zealand also holds the rules that facilitate interactions in the ranking compares economies with one shortest time to start a business (0.5 marketplace without needlessly hindering another; the ease of doing business score days), while Slovenia has the lowest cost the development of the private sector. benchmarks economies with respect to (0.0). Australia, Colombia and 115 other regulatory best practice, showing the economies have no paid-in minimum The four Doing Business indicator absolute distance to the best regulatory capital requirement (table 2.2). sets included in this study — starting performance on each Doing Business a business, registering property, indicator. When compared across years, enforcing contracts and trading across the ease of doing business score shows borders — were selected in collaboration how much the regulatory environment ABOUT Doing Business AND Doing Business IN MoZambique 2019 25 Calculation of the ease of doing rescaled using the linear transforma- established every five years based on business score tion (worst − y)/(worst − best). In this the Doing Business data for the year in Calculating the ease of doing business formulation the highest score represents which they are established and remain score for each economy involves two the best regulatory performance on the at that level for the five years regardless main steps. In the first step individual indicator across all economies since of any changes in data in interim years. component indicators are normalized 2005 or the third year in which data Thus an economy may establish the best to a common unit where each of the for the indicator were collected. Both regulatory performance for an indicator 41 component indicators y (except for the best regulatory performance and even though it may not have the highest the total tax and contribution rate) is the worst regulatory performance are score in a subsequent year. Conversely, TABLE 2.2  Which economies set the best regulatory performance? Best regulatory Worst regulatory Topic and indicator Economy establishing best regulatory performance performance performance Starting a business Procedures (number) Georgia;New Zealand 1 18a Time (days) New Zealand 0.5 100b Cost (% of income per capita) Slovenia 0.0 200.0b Minimum capital (% of income per capita) Australia; Colombia c 0.0 400.0b Registering property Procedures (number) Georgia; Norway; Portugal; Sweden 1 13a Time (days) Georgia; New Zealand 1 210b Cost (% of property value) Saudi Arabia 0.0 15.0b Quality of land administration index (0–30) No economy has attained the performance yet. 30 0d Trading across borders Time to export Documentary compliance (hours) Canada; Poland; Spaine 1f 170b Border compliance (hours) Austria; Belgium; Hong Kong SAR. Chinag 1f 160b Cost to export Documentary compliance (US$) Hungary; Luxembourg; Norwayh 0 400b Border compliance (US$) France; Netherlands; Portugal i 0 1,060b Time to import Documentary compliance (hours) Republic of Korea; Latvia; Maltaj 1f 240b Border compliance (hours) Bulgaria; France; Germany k 1f 280b Cost to import Documentary compliance (US$) Iceland; Latvia; United Kingdoml 1 700b Border compliance (US$) Armenia; Denmark; Estonia m 1 1,200b Enforcing contracts Time (days) No economy was a best performer as of May 1. 2018. 120 1,340b Cost (% of claim) No economy was a best performer as of May 1. 2018. 0.1 89.0b Quality of judicial processes index (0–18) No economy has reached the best performance yet. 18 0d Source: Subnational Doing Business database. a. Worst performance is defined as the 99th percentile among all economies in the Doing Business sample. b. Worst performance is defined as the 95th percentile among all economies in the Doing Business sample. c. Another 115 economies also have a paid-in minimum capital requirement of 0.0. d. Worst performance is the worst value recorded. e. Another 23 economies also have a documentary compliance time to export of no more than 1 hour. f. Defined as 1 hour even though in many economies the time is less. g. Another 16 economies also have a border compliance time to export of no more than 1 hour. h. Another 17 economies also have a documentary compliance cost to export of 0.0. i. Another 16 economies also have a border compliance cost to export of 0.0. j. Another 27 economies also have a documentary compliance time to import of no more than 1 hour. k. Another 22 economies also have a border compliance time to import of no more than 1 hour. l. Another 27 economies also have a documentary compliance cost to import of 0.0. m. Another 25 economies also have a border compliance cost to import of 0.0. 26 Doing Business IN MOZAMBIQUE 2019 an economy may score higher than FIGURE 2.3 How are scores calculated for indicators? the best regulatory performance if the A time-and-motion topic: getting electricity economy reforms after the best regula- Getting electricity tory performance is set. For example, the score for procedures 100 Best regulatory performance best regulatory performance for the time to get electricity is set at 18 days. In the Best regulatory performance: Republic of Korea it now takes 13 days to 80 3 procedures get electricity while in the United Arab Emirates it takes just 10 days. Although 60 the two economies have different times, both economies score 100 on the time to get electricity because they have 40 exceeded the threshold of 18 days. Worst regulatory performance 20 (99th percentile): For scores such as those on the strength 9 procedures of legal rights index or the quality of land 0 administration index, the best regula- 0 1 2 3 4 5 6 7 8 9 10 tory performance is set at the highest Procedures (number) possible value (although no economy Source: Doing Business database. has yet reached that value in the case of the latter). For the total tax and contri- payments to pay taxes, and the time and An economy’s score is indicated on a bution rate, consistent with the use of cost indicators), and the 99th percentile scale from 0 to 100, where 0 represents a threshold in calculating the rankings is used for number of procedures. No the worst regulatory performance and on this indicator, the best regulatory outlier is removed for component indica- 100 the best. All score calculations are performance is defined as the total tax tors bound by definition or construction, based on a maximum of five decimals. and contribution rate at the 15th percen- including legal index scores (such as the However, topic ranking calculations tile of the overall distribution for all depth of credit information index, extent and the ease of doing business ranking years included in the analysis up to and of disclosure index and strength of insol- calculations are based on two decimals. including Doing Business 2015. For the vency framework index) and the recovery The difference between an economy’s time to pay taxes, the best regulatory rate (figure 2.3). score in any previous year and its score in performance is defined as the lowest Doing Business 2019 illustrates the extent time recorded among all economies that In the second step for calculating the to which the economy has closed the gap levy the three major taxes: profit tax, ease of doing business score, the scores between its score and the best regulatory labor taxes and mandatory contributions, obtained for individual indicators for performance over time. In any given year and value added tax (VAT) or sales tax. each economy are aggregated through the score measures how far an economy For the different times to trade across simple averaging into one score, first is from the best regulatory performance borders, the best regulatory performance for each topic and then across all 10 at that time. is defined as 1 hour even though in many topics: starting a business, dealing with economies the time is less than that. In the construction permits, getting electricity, Ease of doing business ranking same formulation, to mitigate the effects registering property, getting credit, The ease of doing business ranking ranges of extreme outliers in the distributions of protecting minority investors, paying from 1 to 190. The ranking of economies the rescaled data for most component taxes, trading across borders, enforcing is determined by sorting the aggregate indicators (very few economies need contracts and resolving insolvency. More ease of doing business scores, rounded 700 days to complete the procedures to complex aggregation methods — such as to two decimals. start a business, but many need 9 days), principal components and unobserved the worst performance is calculated after components — yield a ranking nearly the removal of outliers. The definition of identical to the simple average used FACTORS NOT MEASURED outliers is based on the distribution for by Doing Business.4 Thus Doing Business BY DOING BUSINESS AND each component indicator. To simplify uses the simplest method: weighting all SUBNATIONAL DOING the process two rules were defined: the topics equally and, within each topic, BUSINESS STUDIES 95th percentile is used for the indicators giving equal weight to each of the topic with the most dispersed distributions components.5 Many important policy areas are not (including minimum capital, number of covered by Doing Business; even within ABOUT Doing Business AND Doing Business IN MoZambique 2019 27 the areas it covers its scope is narrow TABLE 2.3 What Doing Business and Country Policy and Institutional (table 2.3). Doing Business does not does not cover Assessments, which measure the measure the full range of factors, policies quality of policies and institutions in Examples of areas not covered and institutions that affect the quality International Development Association of an economy’s business environment Macroeconomic stability (IDA) economies.6 or its national competitiveness. It does Development of the financial system not, for example, capture aspects of Quality of the labor force macroeconomic stability, development ADVANTAGES AND Incidence of bribery and corruption of the financial system, market size, the LIMITATIONS OF THE incidence of bribery and corruption or the Market size METHODOLOGY quality of the labor force. Lack of security The Doing Business methodology is The focus is deliberately narrow even designed to be an easily replicable way within the relatively small set of indica- provides only one input into the debate to benchmark specific characteristics tors included in Doing Business. The on the regulatory burden associated of business regulation — how they are time and cost required for the logistical with achieving regulatory objectives, implemented by governments and expe- process of exporting and importing which can differ across economies. Doing rienced by private firms on the ground. goods is captured in the trading across Business provides a starting point for Its advantages and limitations should be borders indicators, for example, but they this discussion and should be used in understood when using the data (table do not measure the cost of tariffs or of conjunction with additional data sources. 2.4). international transport. Doing Business Other World Bank Group databases that provides a narrow perspective on the provide comprehensive data related to Ensuring comparability of the data across infrastructure challenges that firms face, some areas of Doing Business include: a global set of economies is a central particularly in the developing world, Women, Business and the Law, which consideration for the Doing Business through these indicators. It does not measures legal restrictions on women’s indicators, which are developed around address the extent to which inadequate economic opportunities in 189 econo- standardized case scenarios with specific roads, rail, ports and communications mies; the Logistic Performance Index, assumptions. One such assumption may add to firms’ costs and undermine which benchmarks the performance of is the location of a standardized busi- competitiveness (except to the extent trade logistics in 160 economies; the ness — the subject of the Doing Business that the trading across borders indicators World Governance Indicators, which case study — in the largest business city indirectly measure the quality of ports provides data on different dimen- of the economy. The reality is that busi- and border connections). Similar to the sions of governance in 214 economies; ness regulations and their enforcement indicators on trading across borders, all aspects of commercial legislation are not TABLE 2.4 Advantages and limitations of the Doing Business methodology covered by those on starting a business Feature Advantages Limitations or protecting minority investors. Given Use of standardized case Makes data comparable across Reduces scope of data; only that Doing Business measures only a few scenarios economies and methodology regulatory reforms in areas features of each area that it covers, busi- transparent measured can be systematically tracked ness regulatory reforms should not focus Focus on largest business citya Makes data collection Reduces representativeness of only on these narrow areas and should be manageable (cost-effective) and data for an economy if there are evaluated within a broader perspective. data comparable significant differences across locations Doing Business does not attempt to quan- Focus on domestic and formal Keeps attention on formal Unable to reflect reality for informal private sector sector — where regulations are sector — important where that is tify all costs and benefits of a particular relevant and firms are most large — or for foreign firms facing a law or regulation to society as a whole. The productive different set of constraints paying taxes indicators measure the total Reliance on expert respondents Ensures that data reflect Indicators less able to capture knowledge of those with most variation in experiences among tax and contribution rate, which, in isola- experience in conducting types entrepreneurs tion, is a cost to businesses. However, the of transactions measured indicators do not measure — nor are they Focus on the law Makes indicators Where systematic compliance intended to measure — the benefits of the “actionable” — because the with the law is lacking, regulatory law is what policy makers can changes will not achieve full results social and economic programs funded change desired with tax revenues. Measuring the quality a. In economies with a population of more than 100 million as of 2013, Doing Business covers business and efficiency of business regulation regulation in both the largest and the second largest business city. Subnational Doing Business studies go beyond the largest business city within a country or region. 28 Doing Business IN MOZAMBIQUE 2019 may differ within a country, particularly FIGURE 2.4 Typical stages of a subnational Doing Business project in federal states and large economies. But gathering data for every relevant jurisdiction in each of the 190 economies covered by Doing Business is not feasible. Stage 1 Stage 2 Stage 4 Client inquiry Project setup and Stage 3 Data collection Beginning in 2014, Doing Business and request engagement with Project kickoff and preparation of extended its global coverage to include local partners preliminary results the second largest business city in econo- mies with a population of more than 100 million as of 2013. To complement the global assessment, subnational Doing Business studies generate data at the local Stage 6 Stage 5 Stage 7 level, beyond the largest business city — a Data verification, Presentation of Launch of construction of preliminary results potentially useful tool for policy makers. final results final indicators and to public officials report drafting (”right of reply”) Doing Business recognizes the limitations of the standardized case scenarios and assumptions. But while such assump- tions come at the expense of generality, de jure data provided by Doing Business private sector practitioners and govern- they also help to ensure the compara- and the de facto insights offered by ment officials), through responses to bility of data. Some Doing Business topics the World Bank Enterprise Surveys.7 questionnaires, conference calls, written are complex, and so it is important that Levels of informality tend to be higher in correspondence and visits by the team. the standardized cases are defined care- economies with particularly burdensome Doing Business relies on four main sources fully. For example, the standardized case regulation. Compared with their formal of information: the relevant laws and regu- scenario usually involves a limited liability sector counterparts, firms in the informal lations, Doing Business respondents, the company or its legal equivalent. There sector typically grow more slowly, have governments of the economies covered are two reasons for this assumption. poorer access to credit and employ fewer and the World Bank Group regional staff. First, private, limited liability companies workers — and these workers remain For a detailed explanation of the Doing are the most prevalent business form outside the protections of labor law Business methodology, see the data notes (for firms with more than one owner) and, more generally, other legal protec- at http:// www.doingbusiness.org. in many economies around the world. tions embedded in the law.8 Firms in the Second, this choice reflects the focus of informal sector are also less likely to pay Subnational Doing Business follows similar Doing Business on expanding opportuni- taxes. Doing Business measures one set of data collection methods. However, ties for entrepreneurship: investors are factors that help explain the occurrence subnational Doing Business studies are encouraged to venture into business of informality and give policy makers driven by client demand and do not follow when potential losses are limited to their insights into potential areas of regulatory the same timeline as global Doing Business capital participation. reform. publications. They incorporate a “right of reply” period, which consists of a series Another assumption underlying the of consultative working meetings with Doing Business indicators is that entre- DATA COLLECTION IN local authorities in each of the locations preneurs have knowledge of and comply PRACTICE measured to discuss the preliminary data with applicable regulations. In practice, and gather their feedback (figure 2.4). entrepreneurs may not be aware of what The Doing Business data are based on a needs to be done or how to comply with detailed reading of domestic laws, regula- Relevant laws and regulations regulations and may lose considerable tions and administrative requirements as Indicators presented in Doing Business in time trying to find out. Alternatively, they well as their implementation in practice as Mozambique 2019 are based mostly on may intentionally avoid compliance — by experienced by private firms. The report laws and regulations. Besides partici- not registering for social security, for covers 190 economies — including some pating in interviews or filling out written example. Firms may opt for bribery and of the smallest and poorest economies, questionnaires, expert respondents other informal arrangements intended for which little or no data are available provided references to the relevant laws, to bypass the rules where regulation is from other sources. The data are collected regulations and fee schedules, which particularly onerous — an aspect that through several rounds of communica- were collected and analyzed by the helps explain differences between the tion with expert respondents (both Subnational Doing Business team. ABOUT Doing Business AND Doing Business IN MoZambique 2019 29 The Doing Business indicators are based Expert respondents individual firms. They also have access to mostly on laws and regulations: approxi- For Doing Business in Mozambique 2019 current regulations and practices, while a mately two-thirds of the data embedded nearly 230 professionals across all firm may have faced a different set of rules in the Doing Business indicators are based locations assisted in providing the data when incorporating years before. The on a reading of the law. In addition to filling that inform the four areas covered. The second reason is that the Doing Business out questionnaires, Doing Business respon- Subnational Doing Business website and questionnaires mostly gather legal infor- dents submit references to the relevant the acknowledgments section of this mation, which firms are unlikely to be laws, regulations and fee schedules. The report list the names and credentials of fully familiar with. For example, few firms Doing Business team collects the texts those respondents who wished to be will know about all the main legal proce- of the relevant laws and regulations and acknowledged. Selected on the basis of dures involved in resolving a commercial checks the questionnaire responses for their expertise, respondents are profes- dispute through the courts, even if they accuracy. The team will examine the civil sionals who routinely administer or advise have gone through the process them- procedure code, for example, to check the on the legal and regulatory requirements selves. But a litigation lawyer should have maximum number of adjournments in a in the specific areas covered by Doing little difficulty in providing the requested commercial court dispute, and read the Business in Mozambique 2019. Because information on all the procedures. insolvency code to identify if the debtor of the focus on legal and regulatory can initiate liquidation or reorganization arrangements, most of the respondents Governments and World Bank proceedings. These and other types of are legal professionals such as lawyers or Group staff laws are available on the Doing Business conveyancers. For trading across borders, After analyzing laws and regulations law library website.9 Since the data collec- information was provided by clearing and and conducting follow-up interviews tion process involves an annual update freight forwarding agencies. Information with respondents for Doing Business in of an established database, having a very incorporated in the indicators was also Mozambique 2019, the Subnational Doing large sample of respondents is not strictly provided by public officials and judicial Business team shared the preliminary necessary. In principle, the role of the and municipal authorities. findings with the relevant government contributors is largely advisory — helping and public authorities in each location. the Doing Business team to locate and The Doing Business approach is to work Through this process, government offi- understand the laws and regulations. with legal practitioners or other profes- cials have the opportunity to provide their There are quickly diminishing returns to sionals who regularly undertake the feedback on the preliminary data, give an expanded pool of contributors. This transactions involved. Following the updates on their new and ongoing regu- notwithstanding, the number of contribu- standard methodological approach for latory reform initiatives, and share their tors rose by 70% between 2010 and 2018. time-and-motion studies, Doing Business reform experiences and stories. Over in Mozambique 2019 breaks down each time, these right of reply meetings have Extensive consultations with multiple process or transaction, such as starting become an essential milestone of subna- contributors are conducted by the team a business or registering a building, tional Doing Business projects to enhance to minimize measurement errors for the into separate steps to ensure a better the quality of the studies and motivate rest of the data. For some indicators — for estimate of time. The time estimate for local governments to have greater owner- example, those on dealing with construc- each step was given by practitioners with ship of the reform process. The final data tion permits, enforcing contracts and significant and routine experience in the are analyzed and incorporated into a resolving insolvency — the time compo- transaction. comprehensive written report, which is nent and part of the cost component shared and peer-reviewed by World Bank (where fee schedules are lacking) are There are two main reasons that Doing Group specialists. based on actual practice rather than Business does not survey firms. The first the law on the books. This introduces a relates to the frequency with which firms degree of judgment by respondents on engage in the transactions captured by USES OF THE DOING what actual practice looks like. When the indicators, which is generally low. For BUSINESS DATA respondents disagree, the time indicators example, a firm goes through the start- reported by Doing Business represent the up process once in its existence, while Doing Business was designed with two median values of several responses given an incorporation lawyer may carry out main types of users in mind: policy makers under the assumptions of the standard- 10 such transactions each month. The and researchers. It is a tool that govern- ized case. incorporation lawyers and other experts ments can use to design sound business providing information to Doing Business regulatory policies. Nevertheless, the are therefore better able to assess the Doing Business data are limited in scope process of starting a business than are and should be complemented with other 30 Doing Business IN MOZAMBIQUE 2019 sources of information. Doing Business location of their economy, a factor that Asia: Afghanistan, Bangladesh, India and focuses on a few specific rules relevant to can adversely affect businesses. Pakistan. In Europe and Central Asia: the specific case studies analyzed. These Albania, Azerbaijan, Croatia, Georgia, rules and case studies are chosen to be While many Doing Business indicators Kazakhstan, Kosovo, the Kyrgyz Republic, illustrative of the business regulatory are actionable, this does not necessarily the former Yugoslav Republic of North environment, but they are not a compre- mean that they are all “action-worthy” Macedonia, Moldova, Montenegro, hensive description of that environment. in a particular context. Business regula- Poland, Tajikistan, Turkey, Ukraine and By providing a unique data set that tory reforms are only one element of a Uzbekistan. In Sub-Saharan Africa: Benin, enables analysis aimed at better under- strategy aimed at improving competitive- Burundi, the Comoros, the Democratic standing the role of business regulation ness and establishing a solid foundation Republic of Congo, the Republic of Congo, in economic development, Doing Business for sustainable economic growth. There Côte d’Ivoire, Guinea, Guinea-Bissau, is also an important source of information are many other important goals to Kenya, Liberia, Madagascar, Malawi, for researchers. pursue — such as effective management Mali, Mauritius, Niger, Nigeria, Rwanda, of public finances, adequate attention to Senegal, Sierra Leone, Sudan, Tanzania, Governments and policy makers education and training, adoption of the Togo, Zambia and Zimbabwe. And in Latin Doing Business offers policy makers a latest technologies to boost economic America and the Caribbean: Argentina, benchmarking tool useful in stimulating productivity and the quality of public Brazil, Chile, Costa Rica, the Dominican policy debate, both by exposing potential services, and appropriate regard for air Republic, Guatemala, Jamaica, Mexico, challenges and by identifying good prac- and water quality to safeguard public Nicaragua, Panama, Peru and St. Lucia. tices and lessons learned. Despite the health. Governments must decide what Governments have reported more than narrow focus of the indicators, the initial set of priorities best suits their needs. 3,500 regulatory reforms, 1,116 of which debate in an economy on the results they To say that governments should work have been informed by Doing Business highlight typically turns into a deeper toward a sensible set of rules for private since 2003.10 discussion on areas where business regu- sector activity (as embodied, for example, latory reform is needed, including areas in the Doing Business indicators) does not Many economies share knowledge on the well beyond those measured by Doing suggest that doing so should come at the regulatory reform process related to the Business. expense of other worthy policy goals. areas measured by Doing Business. Among the most common venues for this knowl- Many Doing Business indicators can be Over the past decade governments have edge sharing are peer-to-peer learning considered “actionable.” For example, increasingly turned to Doing Business events — workshops where officials from governments can set the minimum as a repository of actionable, objective different governments across a region or capital requirement for new firms, invest data providing unique insights into good even across the globe meet to discuss the in company and property registries to practices worldwide as they have come challenges of regulatory reform and to increase their efficiency, or improve to understand the importance of business share their experiences. the efficiency of tax administration by regulation as a driving force of competi- adopting the latest technology to facili- tiveness. To ensure the coordination of Researchers tate the preparation, filing and payment efforts across agencies, economies such Doing Business data are widely used by of taxes by the business community. as Colombia, Malaysia and the Russian researchers in academia, think tanks, And they can undertake court reforms Federation have formed regulatory international organizations and other to shorten delays in the enforcement reform committees. These committees institutions. Since 2003, thousands of of contracts. But some Doing Business use the Doing Business indicators as researchers have utilized Doing Business indicators capture procedures, time one input to inform their programs for data or its conceptual framework to and costs that involve private sector improving the business environment. analyze the impact of business regula- participants, such as lawyers, nota- More than 70 other economies have tion on various economic outcomes. ries, architects, electricians or freight also formed such committees. In East This section provides a brief overview forwarders. Governments may have little Asia and the Pacific, they include Brunei of studies published in the top 100 jour- influence in the short run over the fees Darussalam; Indonesia; the Republic nals during the last 10 years or recently these professions charge, though much of Korea; Myanmar; the Philippines; distributed as a working paper of a well- can be achieved by strengthening profes- Sri Lanka; Taiwan, China; and Thailand. established institution.11 The papers cited sional licensing regimes and preventing In the Middle East and North Africa: here are just a few examples of research anticompetitive behavior. And govern- Algeria, the Arab Republic of Egypt, Israel, done in the areas measured by Doing ments have no control over the geographic Kuwait, Morocco, Qatar, Saudi Arabia Business.12 A comprehensive review of and the United Arab Emirates. In South the literature is provided in the research ABOUT Doing Business AND Doing Business IN MoZambique 2019 31 chapters of Doing Business 2014 and Doing In many economies, companies engaged A reform making bankruptcy laws more Business 2015. in international trade struggle with high efficient in Colombia, for example, trade costs arising from transport, logis- improved the recovery rate of viable firms Regulation of firm entry is one of the most tics and regulations that impede their significantly.29 In India the establishment investigated areas of business regula- competitiveness and growth potential. of debt recovery tribunals reduced non- tion. The results of this body of research With the Doing Business indicators on performing loans by 28% and lowered suggest that excessive regulation of trading across borders, several empirical interest rates on larger loans, suggesting entry increases the number of informal studies have assessed how trade costs that faster processing of debt recovery businesses and employment. A natural affect the export and import performance cases cut the cost of credit.30 A recent experimental study in Mexico found that of economies. A rich body of empirical study using Doing Business data showed reforms that simplified business registra- research shows that efficient infrastruc- that insolvency resolution is one of the tion increased registration by 5% and wage ture and a healthy business environment main drivers behind “missing” corporate employment by 2.2%.13 These reforms are positively linked to export perfor- bond markets in many economies.31 also resulted in 14.9% of informal business mance.20 According to a study, a 1-day owners shifting to the formal economy.14 increase in transit time reduces exports by More borrowers gain access to credit in In Portugal, reforms reducing the time and an average of 7% in Sub-Saharan Africa.21 economies with a robust legal system cost for company formalization increased Another study found that a 1-day delay in that supports the use of movable assets the number of business start-ups by 17% transport time for landlocked economies as collateral and a well-developed credit and created seven new jobs per 100,000 and for time- sensitive agricultural and information sharing system. In a multi- inhabitants per month. These new start- manufacturing products reduce trade economy study, the introduction of ups were more likely to be female-owned, by more than 1% for each day of delay.22 collateral registries for movable assets were smaller and headed by less experi- Delays in customs clearance also nega- was shown to increase firms’ access to enced and less-educated entrepreneurs tively impact a firm’s ability to export, finance by approximately 8%.32 Creditors’ compared to others, suggesting that the particularly when goods are destined for ability to use movable assets, vis-à-vis reform created a more inclusive environ- new clients.23 In economies with flexible real estate, is shown to increase the debt ment for aspiring entrepreneurs.15 entry regulations, a 1% increase in trade capacity of firms.33 An in-depth review of is associated with an increase of more global bank flows revealed that firms in Efficient and non-distortionary business than 0.5% in income per capita but has economies with better credit information regulations are crucial for productivity. no positive income effects in economies sharing systems and higher branch pene- A study on India, for example, shows with more rigid regulation.24 Research tration evade taxes to a lesser degree.34 that inefficient licensing and size restric- has also shown that potential gains for tions cause a misallocation of resources, consumers from import competition are There is also a large body of work inves- reducing total factor productivity (TFP) by reduced in economies with cumbersome tigating the distortionary effects of high preventing efficient firms from achieving regulation.25 tax rates and cumbersome tax codes their optimal scale and allowing inefficient and procedures. After a tax reform in firms to remain in the market.16 The study Even though Doing Business measures Brazil, business licensing among retail concludes that removing these restric- aspects of business regulation affecting firms rose by 13%.35 Research shows tions would boost TFP by 40-60%. In the domestic firms, several studies indicate that a 10% reduction in tax complexity is European Union and Japan, implicit taxes that better business regulation is associ- comparable to a 1% reduction in effective on capital use were shown to reduce the ated with higher levels of FDI.26 Also, the corporate tax rates36 and higher tax rates average size of firms by 20%, output by impact of FDI on domestic investment discourage entry.37 A recent study finds 8.1% and output per firm by 25.6%.17 A depends on how business- friendly entry that a lower tax compliance burden has recent study on Côte d’Ivoire, Ethiopia, regulations are in the host economy. a positive impact on the productivity of Ghana and Kenya demonstrates large A study shows that FDI can crowd out small and young firms.38 productivity gains following the removal domestic investment in economies with of firm-level distortions caused by uneven costly processes for starting a business.27 Labor market regulation — as measured regulations and a poor business environ- Another study points out that economies by Doing Business — has been shown ment.18 Research also shows that raising with simpler processes for starting a busi- to have important implications for the efficiency level of bankruptcy laws in ness have higher international market economies. According to one study, select OECD high-income economies to integration on average.28 graduating from school during a time that of the United States would increase of adverse economic conditions has a the TFP of the former by about 30% A well-designed insolvency framework persistent, harmful effect on workers’ through a rise in bank loans to large firms.19 is a vital determinant of debt recovery. subsequent employment opportunities. 32 Doing Business IN MOZAMBIQUE 2019 The persistence of this negative effect business environment data generated peer-reviewed academic journals and 1,360 of these are published in the top 100 journals. is stronger in economies with stricter by Doing Business by incorporating it into Another 9,450 are published as working employment protection legislation.39 the study of other important social and papers, books, reports, dissertations or Rigid employment protection legislation economic issues across economies and research notes. 13. Bruhn 2011. can also have negative distributional regions. They prove that, taken individu- 14. Bruhn 2013. consequences. A study analyzing the ally, Doing Business indicators remain a 15. Branstetter and others 2014. labor market regulation literature points useful starting point for a rich body 16. Hsieh and Klenow 2009. 17. Guner, Ventura and Xu 2008. out that the impact of labor market of analysis across different areas and 18. Cirera, Fattal Jaef and Maemir 2017. regulation on productivity could be in dimensions in the research world. 19. Neira 2017. either direction, and the magnitude of 20. Portugal-Perez and Wilson 2011 21. Freund and Rocha 2011. the impact is modest. The study provides 22. Djankov, Freund and Pham 2010. clear evidence that labor market regula- NOTES 23. Martincus, Carballo and Graziano 2015. tion equalizes the income of the covered 24. Freund and Bolaky 2008. 1. Djankov 2016. 25. Amiti and Khandelwal 2011. workers, but youth, women and less- 26. Corcoran and Gillanders 2015. 2. These papers are available on the Doing skilled workers generally are left outside Business website at http://www.doingbusiness. 27. Munemo 2014. this coverage and the benefits40. org/methodology. 28. Norbäck, Persson and Douhan 2014. 3. For more on the World Bank Enterprise 29. Giné and Love 2010. Surveys, see the website at http://www. 30. Visaria 2009. Indexes enterprisesurveys.org. 31. Becker and Josephson 2016. Doing Business identified 20 different 4. See Djankov and others 2005. Principal 32. Love, Martínez Pería and Singh 2016. components and unobserved components 33. Calomiris and others 2017. data projects or indexes that use Doing 34. Beck, Lin and Ma 2014. methods yield a ranking nearly identical to Business as one of its sources of data.41 that from the simple average method because 35. Monteiro and Assunção 2012. Most of these projects or institutions use both these methods assign roughly equal 36. Lawless 2013. weights to the topics, since the pairwise 37. Belitski, Chowdhury and Desai 2016. indicator level data and not the aggregate 38. Dabla-Norris and others 2017. correlations among topics do not differ much. ease of Doing Business ranking. The indi- An alternative to the simple average method 39. Kawaguchi and Murao 2014. cator set most widely used is starting a is to give different weights to the topics, 40. Betcherman 2015. depending on which are considered of more 41. The projects or indexes using Doing Business business, followed by labor market regu- as a source of data are the following: Citi or less importance in the context of a specific lation and paying taxes. These indexes economy. and Imperial College London’s Digital typically combine Doing Business data 5. For getting credit, indicators are weighted Money Index; Cornell University and the proportionally, according to their contribution World Intellectual Property Organization’s with data from other sources to assess Global Innovation Index (GII); DHL’s Global to the total score, with a weight of 60% an economy along a particular aggregate assigned to the strength of legal rights index Connectedness Index (GCI); Fraser Institute’s dimension such as competitiveness or and 40% to the depth of credit information Economic Freedom of the World (EFW) index; index. Indicators for all other topics are Heritage Foundation’s Index of Economic innovation. The Heritage Foundation’s Freedom (IEF); INSEAD’s Global Talent assigned equal weights. Index of Economic Freedom, for example, 6. For more information on these databases, Competitiveness Index (GTCI); International has used 22 Doing Business indicators see their websites: Women, Business and the Institute for Management Development’s Law (https://wbl.worldbank.org/); Logistic World Competitiveness Yearbook; KPMG’s to measure the degree of economic Change Readiness Index (CRI); Legatum Performance Index (https://lpi.worldbank. freedom in the world in four areas, org/); World Governance Indicators (http:// Institute’s Legatum Prosperity Index; including rule of law, government size, info.worldbank.org/governance/wgi/#home); Millennium Challenge Corporation’s Open Country Policy and Institutional Assessments Data Catalog; Oxford University’s International regulatory efficiency and market open- Civil Service Effectiveness (InCiSE) Index; (https:/ /datacatalog.worldbank.org/dataset/ ness.42 Economies that score better in country-policy-and-institutional-assessment). PricewaterhouseCoopers’ Paying Taxes these four areas also tend to have a high 7. Hallward-Driemeier and Pritchett 2015. 2018: In-depth Analysis on Tax Systems 8. Schneider 2005; La Porta and Shleifer 2008. in 190 Economies Report; TRACE’s Bribery degree of economic freedom. Risk Matrix; U.S. Chamber of Commerce’s 9. For the law library, see the website at http:// www.doingbusiness.org/law-library. Global Rule of Law and Business Dashboard; Similarly, the World Economic Forum 10. These are reforms for which Doing Business University of Gothenburg’s Quality of is aware that information provided by Doing Government (QoG) Standard Dataset; and uses Doing Business data in its Global World Economic Forum’s Enabling Trade Business was used in shaping the reform Competitiveness Index to demonstrate agenda. Index (ETI), Global Competitiveness Index how competitiveness is a global driver 11. The journal and institution rankings are from (GCI); Human Capital Index (HCI), Networked Research Papers in Economics (RePEc) and Readiness Index (NRI) and Travel and Tourism of economic growth. The organization Competitiveness Index (TTCI). cover the last 10 years. They can be accessed also uses 13 Doing Business indicators in at https://ideas.repec.org/top/top.journals. 42. For more on the Heritage Foundation’s Index five indexes that measure institutions, simple10.html and https://ideas.repec.org/ of Economic Freedom, see the website at top/top.inst.allbest10.html. http://heritage.org/index. product market efficiency, labor market 12. Since 2003, when the Doing Business report efficiency, financial market development was first published, more than 3,400 research and business dynamism. These publicly articles discussing how regulation in the accessible sources expand the general areas measured by Doing Business influence economic outcomes have been published in STARTING A BUSINESS 33 Starting a business MAIN FINDINGS ¡ Starting a business is a lengthy and costly process across Mozambique, requiring three more procedures than the average for economies in Sub-Saharan Africa and the Southern African Development Community. ¡ The complexity of registering a company, as well as the steep fees for publishing its articles of association in the official gazette, are the main obstacles for entrepreneurs in Mozambique. ¡ As of May 2018, entrepreneurs can publish a simplified abstract of the articles of association. In provinces that have implemented this reform — Cabo Delgado, Gaza and Tete — publishing costs are 50% lower than elsewhere. ¡ In Maputo City entrepreneurs can go to a single location — the company registry — to both register a company and publish its articles of association in the official gazette, which makes starting a business three weeks faster there than in the other nine provinces. ¡ The government has initiated reforms toward electronic transaction systems. Nonetheless, efforts to make starting a business faster and less cumbersome should focus on further streamlining the process through the electronic one-stop shop platform — e-BAÚ. 34 Doing Business IN MOZAMBIQUE 2019 S mall and medium-size enter- The most problematic factors for doing prises (SMEs) have been broadly business in Mozambique include corrup- HOW DOES STARTING acknowledged as key drivers of job tion, inefficient government bureaucracy A BUSINESS WORK IN creation and inclusive growth. However, and limited access to financing.4 Over MOZAMBIQUE? much of the country’s economic activity the past decade, improving business takes place in the informal sector, which competitiveness has been a focus for the The requirements for operating a busi- accounted for close to 40% of gross government.5 Although various govern- ness are governed at the national level by domestic product between 2010 and ment initiatives have moved to simplify the Commercial Code (Decree 2/2005 of 2014.1 A good business environment formal requirements, starting a business December 27). Although the legal frame- that enables formal entrepreneurship continues to be a lengthy process and can work is the same nationwide, there are is critical to unleashing the potential cost a significant proportion of income differences in time and cost, with entre- of SMEs.2 Fostering a sound business per capita. Mozambique’s performance preneurs generally spending the most climate — one that removes potential lags far behind regional good practices. time and money on legally registering obstacles to business initiative, invest- Economies such as Mauritius — among the company with the official company ment and innovation — can contribute the top performers in Sub-Saharan registry (Conservatória do Registo de to formal entrepreneurship and limit Africa — have proved that starting a busi- Entidades Legais or CREL) and publishing opportunities for corruption. Faced with ness can be relatively simple and efficient. the articles of association in the official all the challenges of getting a business Regulatory reforms in such economies gazette (Boletim da República). Among off the ground, SMEs generally lack the have revolved around simplifying the the 10 provinces measured, starting a time and resources to navigate exces- registration process, expanding the use business is easiest in Maputo City, where sive bureaucracy and complex regulatory of online platforms and streamlining it takes 10 procedures (instead of the requirements. When such conditions procedures. 11 required in the other provinces) and exist, entrepreneurs are more likely to 17 days, at a cost of 120.5% of income proceed informally.3 per capita. It is most burdensome in Nampula, where the process takes 40 TABLE 3.1  Starting a business in Mozambique—where is it easier? Cost Rank Starting a business score Procedures Time (% of income per Provínce (City) (1–10) (0-100) (number) (days) capita) CPLP 77.93 8.7 17.7 40.1 SADC 78.58 7.9 27.4 35.3 SSA 78.52 7.5 23.4 44.4 Mozambique 62.83 10.9 35.2 111.2 Maputo City (Maputo) 1 67.56 10 17 120.5 Cabo Delgado (Pemba) 2 67.32 11 38 68.4 Gaza (Xai-Xai) 3 66.65 11 36 77.8 Tete (Tete) 4 66.16 11 39 75.7 Niassa (Lichinga) 5 61.33 11 34 124.4 Inhambane (Inhambane) 6 61.07 11 35 124.5 Manica (Chimoio) 7 60.38 11 38 124.0 Zambezia (Quelimane) 8 59.77 11 36 132.8 Sofala (Beira) 9 59.04 11 39 132.6 Nampula (Nampula) 10 59.01 11 40 130.9 CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Rankings are based on the average ease of doing business score for the number of procedures, time, cost and paid-in minimum capital associated with starting a business. (There is no paid-in minimum capital requirement across Mozambique.) The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019.” The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. STARTING A BUSINESS 35 authority must authenticate the signa- WHAT DOES STARTING A BUSINESS MEASURE? tures. A recent reform of the Commercial Doing Business records all procedures o cially required, or commonly done in Code7 allows partners to sign the articles practice, for an entrepreneur to start up and formally operate an industrial or com- of association without the presence of a mercial business, as well as the time and cost to complete these procedures and notary. Subsequently, one of the partners the paid-in minimum capital requirement (see figure). To make the data compara- or a company representative takes the ble across locations, Doing Business uses a standardized limited liability company signed document to a notary or relevant that is 100% domestically owned, has five owners, has start-up capital equivalent authority in the company registry or the to 10 times income per capita, engages in general industrial or commercial activi- one-stop shop (Balcão de Atendimento ties and employs between 10 and 50 people within the first month of operations. Único or BAÚ)8 for official recognition of the partners’ signatures. Most entrepre- Cost neurs in Cabo Delgado, Nampula, Sofala, (% of income per capita) Tete and Zambezia now sign the articles Formal operation of association in this way. However, this reform has still not been fully adopted Paid-in in practice in Gaza, Inhambane, Manica, $ Number of minimum capital procedures Maputo City and Niassa, where all part- ners still sign the articles of association in the presence of a notary. Entrepreneur Prior to registration, the company registry Time Preregistration Registration, Postregistration (days) calculates the required fees. The company incorporation then opens a bank account and pays the registration fees via bank deposit. In all provinces except for Tete, company regis- In 2017 the already simplified licensing process was tration is most often done directly at the further streamlined for certain sectors with the creation company registry. Entrepreneurs in Tete, of the license by simple notice for commencement of Maputo City and Zambezia can register operations, which is submitted in one day and at no cost. companies in two different ways: at the company registry or at the one-stop shop, which has registry representatives on its days and costs 130.9% of income per Burundi and Rwanda can open a business premises. However, only in Tete do entre- capita (table 3.1).6 in less than a week, while in South Africa preneurs prefer using the one-stop shop the cost for an entrepreneur to start up over the company registry for this service. How does the process compare? and formally operate a business is less This is mainly because it is faster, but it is Across Mozambique starting a business than 0.5% of income per capita (figure also a result of Tete´s promotional efforts has no paid-in minimum capital require- 3.1). around the province, which have made ment and requires an average of 10.9 businesses more aware of the services procedures and 35.2 days at a cost of Mozambique is one of  32 econo- available through the one-stop shop. 111.2% of income per capita. These figures mies — among the 190 measured are higher than the average for economies worldwide — where starting a business To register a company, the company in the Southern African Development requires at least 10 procedures (table representative must provide the articles Community (SADC), where the process 3.2). Three preregistration procedures of association signed by the partners, the takes three fewer steps, one less week are required: reserving the company certificate of name reservation and proof and costs 35.3% of income per capita. name, validating the signatures on the of fee payment, among other documents.9 The figures for Sub-Saharan Africa’s best company deed, and opening a bank Once the company is registered, the part- performers reveal the challenges that account and paying registration fees. ners obtain a certificate of registration remain in Mozambique for streamlining As in other economies in the region, and a registration number (Número Único procedures and reducing time and cost. the company representative obtains da Entidade Legal or NUEL). To complete Burkina Faso, Burundi and Niger, which a certificate of name reservation from the registration process, the entrepreneur use a paper-based one-stop shop model, the company registry. After the name is requests the publication of the articles of require the fewest steps for opening a reserved, the articles of association are association in the official gazette. Once business — only three. An entrepreneur in signed by all partners, and the relevant the company is legally formed, it must 36 Doing Business IN MOZAMBIQUE 2019 FIGURE 3.1  Starting a business in Mozambique requires more procedures and is slower and more expensive than the average for SADC and Sub-Saharan economies Procedures Time Cost (number) (days) (% of income per capita) 0 NEW ZEALAND 0 CHINA (BEIJING), SLOVENIA 0 GLOBAL SOUTH AFRICA GLOBAL BEST BEST GEORGIA, GLOBAL NEW ZEALAND BEST 20 2 KENYA NIGERIA 10 SADC CPLP 40 SASA 4 MOZAMBIQUE NIGERIA CPLP — Maputo City 60 MOZAMBIQUE 20 6 KENYA — Cabo Delgado KENYA, SSA — — Tete Gaza 80 SOUTH AFRICA SSA SADC SADC 8 NIGERIA 30 CPLP 100 Niassa Inhambane MOZAMBIQUE — — Average 10 — Maputo City — Average Gaza, Zambezia — Cabo Delgado, Manica 120 — Maputo City — Average SOUTH 40 — Sofala, Tete — Nampula — Manica, Niassa, Inhambane Cabo Delgado, Gaza, Inhambane, Manica, Nampula, AFRICA — — Nampula Sofala, Zambezia Niassa, Sofala, Tete, Zambezia 12 140 CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The averages for Mozambique are the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. register for taxes, employment and social license by simple notice for commence- of Labor, Employment and Social Security security services and obtain an operating ment of operations (mera comunicação (Direcção Provincial do Trabalho, Emprego e license.10 First the company must request prévia), which is submitted in one day Segurança Social), along with a hard copy a tax registration number (Número Único and at no cost.11 The main difference record of the employees hired12 and the de Identificação Tributária or NUIT) at between the license by simple notice and company’s work schedule.13 the tax authority (Autoridade Tributaria), other types of simplified licenses is that followed by a license to operate. the former is free of charge. In addition, the entrepreneur registers the Currently, one of the main responsibili- company in the electronic system of the ties of the one-stop shop is to issue this After obtaining an operating license at Ministry of Labor, Employment and Social license (box 3.1). In 2017 the already the one-stop shop, the entrepreneur Security (e-FRN) and, once the registra- simplified licensing process was further must present a declaration of commence- tion is validated, completes and submits streamlined for certain sectors — such as ment of operations at the tax authority. a form listing all employees electronically small-scale retail and professional service Another declaration of activity must also (Folha de Relação Nominal), including their providers — with the creation of the be presented at the Provincial Directorate personal identification details.14 STARTING A BUSINESS 37 TABLE 3.2  Across Mozambique starting a business requires at least 10 procedures Private Varies sector across Procedure Agency Provincial Nacional services provinces Preregistration Obtain a certificate of name reservation Company registry — Sign the company deed before a notary/Authenticate the signatures of the Notary, one-stop-shop or company registry company deed — P Open a bank account and pay the company registration fees Bank — Registration* Register the company Company registry — Publish the full text of the articles of association or the simplified abstract in the National printing press official gazette — P Postregistration Register for taxes and obtain a unique tax identification number (NUIT) Tax authority — Submit a simple notice/Apply for a simplified operating license One-stop-shop — P Declare the commencement of operations Tax authority — Declare the commencement of operations and register employees Provincial Directorate of Labor, Employment and — Social Security Register the company and the employees National Social Security Institute — Obtain workers' compensation insurance coverage Insurance company — Source: Doing Business database. Note: All procedures can be carried out at each agency’s provincial offices, with the exception of the publication of the articles of association, which is done at a national level from Maputo City. Two of the procedures, opening a bank account and obtaining workers’ compensation coverage, are private sector services. * In Maputo City entrepreneurs can handle two procedures—registering the company and publishing its articles of association in the official gazette—at the company registry, which has a representative of the national printing press on its premises. In other provinces these procedures must be done separately, at the company registry and the national printing press. Consequently, Maputo City has one less procedure than other provinces in this indicator. One of the last requirements to be African economies measured by Doing Getting the company’s articles of asso- completed before a company can operate Business. The average wait to start a busi- ciation published in the official gazette15 legally is registering its employees ness in Mozambique is over a month. is a complex, lengthy process. Despite for public health, pension and related Delays affecting the total time are related the opening of gazette offices in Cabo benefits with the National Social Security to the large number of agencies an entre- Delgado, Sofala and Zambezia, these Institute (Instituto Nacional de Segurança preneur must deal with throughout the offices are responsible only for calculating Social or INSS). The entrepreneur must entire process, as well as the time it takes the cost of publication and sending the first go in person to the INSS to register to publish the articles of association in publication abstracts16 to the headquar- the company, after which it can register the official gazette. This is the procedure ters in Maputo City, where the agency its employees for social security benefits that takes the longest and is the costliest responsible for the publication — the online by completing an electronic form when starting a business — 19.2 days national printing press (Imprensa available on the INSS website. Finally, and MT 24,375 ($397) on average. The Nacional) — is located. In other provinces the company has to purchase group exception is Maputo City, where it takes one must send digital and hard copies of insurance to cover every employee for five days to register the company and the publication abstract to the national workplace accidents and occupational publish the articles of association because printing press to receive an estimate; the illnesses not covered by the social secu- entrepreneurs can complete both steps company then makes a payment via bank rity health system. at one location — the company registry deposit and sends the proof of payment (figure 3.2). In fact, Maputo is the only by mail to begin the process of publica- How does the time vary? city where the national printing press has tion. Because of these delays, even in Starting a business is fastest in Maputo a representative at the company registry provinces where the official gazette has City, where it takes 17 days. The same who can calculate the fees for publication an office, it is common for a company’s process takes 40 days in Nampula, which in the official gazette and send the arti- representatives to travel to Maputo City would make it one of the seven slowest cles of association directly to the national to complete the process.17 Indeed, this places among the 48 Sub-Saharan printing press. cumbersome process has spawned a new 38 Doing Business IN MOZAMBIQUE 2019 BOX 3.1 The evolution of one-stop shops in Mozambique Since 2001, as part of a national strategy of public sector reform, Mozambique has developed 19 one-stop shops throughout the country.a These are local agencies that concentrate representatives from different public institutions to provide public services in one location, with the goal of simplifying and facilitating interactions between citizens and the public sector. These locations offer a wide range of services related to licensing, registration, migration, transport, tax and fee collection, and civil registration and identification, as well as notary services, among others.b The one-stop shops were formally established by Decree No. 14/2007, which also gave them licensing authority. However, their operations are not fully autonomous, as they are subordinate to their respective provincial governments and their operations are supervised by the Ministry of Industry and Commerce. Establishing one-stop shops to facilitate the process of starting a business is among the good practices that have emerged over time globally. Rwanda has streamlined business registration by allowing entrepreneurs to complete procedures with the registry, tax authority and social security services at a single location. In Madagascar entrepreneurs can request the company’s tax iden- tification number, register the company and apply for the operating license at the one-stop shop; they can also publish notices of incorporation on the one-stop shop website and register employees with social security on the premises. In other economies, such as Denmark, New Zealand, Norway and Singapore, one-stop shops provide a single electronic interface for entrepreneurs.c In Mozambique the one-stop shops offer services intended to help streamline the process of setting up a business. Their ability to do this varies widely, and generally they lack full authority over the agencies involved in the business start-up process. In all provinces one-stop shops are involved in helping entrepreneurs obtain a business operating license,d while in only three prov- inces — Maputo City, Tete and Zambezia — are they involved in company registration. As a result, entrepreneurs outside of these provinces must go to the company registry for this step. The one-stop shops in Maputo City and Tete also have representatives there from the Provincial Directorate of Labor and the National Social Security Institute, two relevant agencies involved in the postregistration process. Maputo City and Tete have the most agencies involved in business start-up represented in the one-stop shops Agencies Insurance company National Social Security Institute Tax authority Provincial Directorate of Labor, Employment and Social Security National printing press Bank Notary Company registry Maputo Tete Nampula Niassa Sofala Zambezia Cabo Inhambane Gaza Manica City (2005) (2005) (2008) (2008) (2001) Delgado (2007) (2005) (2007) (2005) (2005) Source: Doing Business database. Note: This figure represents only the one-stop shops in the provincial capitals. Two of the procedures, opening a bank account and obtaining workers’ compensation coverage, are private sector service. Agencies that are not part of the process of opening and operating a company like the one in the Doing Business case study do not appear. For example, in Manica and Nampula the municipal council is represented at the one-stop shop, but it is not included here as it is not part of this indicator. The figure also shows the year of creation of the one-stop shops by province. The first one-stop shop in Mozambique was established in 2001 in Zambezia. There is still a long way to go to improve the one-stop shops. Even Maputo City, which together with Tete has the highest repre- sentation of government agencies involved in the process of starting and operating a business,e does not provide all the services on site. Moreover, agencies involved in the postregistration process, such as the Directorate of Labor, are underrepresented. As a result, it continues to be common practice for entrepreneurs across the country to visit each government agency individually, even when some of the agencies are represented at the one-stop shops. The authorities are therefore encouraged to fully implement the model of one-stop shops by better integrating the agencies involved in starting a business and by developing back-office and electronic data-sharing systems to improve efficiency and coordination. STARTING A BUSINESS 39 One obstacle to fully incorporating business start-up services in one-stop shops in Mozambique has been the resistance of the institutions involved. Their low representation in one-stop shops and the slow pace of their incorporation have made it harder for the process to gain traction. Additionally, there are no clear boundaries between the responsibilities of the one-stop shops and the different institutions, nor is there sufficient funding for the electronic infrastructure required to coordinate the different play- ers involved in the process of opening a businessf Among the problems: deficient funding and staff training, a lack of integration among different agencies’ electronic systemsg and a telecommunications infrastructure that is unable to properly support the use of internet platforms. High-level political support would help improve the intergovernmental coordination that is required to suc- cessfully implement this reform. a. One-stop shops are located in all provincial capitals — Pemba (Cabo Delgado), Xai-Xai (Gaza), Inhambane (Inhambane), Chimoio (Manica), Maputo (Maputo City), Matola (Maputo Province), Nampula (Nampula), Lichinga (Niassa), Beira (Sofala), Tete (Tete) and Quelimane (Zambezia) — and in some districts, namely Angónia, Changara, Lumbo, Mocímboa da Praia, Mocuba, Montepuez, Mutarara and Nacala. More information is available at: http:// www.mic.gov.mz/por/Media/Files/baus. b. These are the services listed in Decree No. 14/2007, adopted on May 30, 2007. However, the type and number of services in each one-stop shop varies. c. World Bank. Doing Business: Starting a Business: Good Practices. Available at: http://www.doingbusiness.org/en/data/exploretopics/starting-a-business/ good-practices. d. Entrepreneurs can apply for all types of business operating licenses at the one-stop shops. e. The national printing press is not represented at one-stop shops in Mozambique. f. OECD. 2013. OECD Investment Policy Reviews: Mozambique 2013. g. Each agency involved in business start-up in Mozambique has its own electronic system. However, these systems do not yet share information with the other relevant agencies. line of companies offering to help entre- Sofala and Zambezia, the one-stop shop Obtaining a certificate of name reserva- preneurs by performing the steps needed requires that entrepreneurs have profes- tion in Mozambique takes from one to two to publish the articles of association.18 sional affiliation cards in order to be days, through a process that has gradu- issued a license by simple notice, making ally been computerized in all provinces. The overall time it takes to start a busi- the application process more difficult. In 2018 Cabo Delgado was the latest to ness across the different provinces varies The requirements to request this type of move from manual entries in books to a depending on staff capacity, use of license give rise to different interpreta- computerized system. However, due to electronic systems, reliability of internet tions of the law. Some lawyers have also frequent internet failures or insufficient connections and the extent to which argued that because the simple notice is staff, the procedure sometimes has to be reforms that aim to simplify the business a recent reform and its legal implications done by hand or postponed, so it can take start-up process have been implemented. are still unclear, it is less secure than the up to two days in some provinces (Cabo Specific variations in time can be found simplified license. Delgado, Inhambane, Manica, Nampula in different procedures. The procedure to and Sofala). Delays also occur when the register a company, for example, gener- Electronic systems for labor registration name of first choice is unavailable. ally takes from two days in Cabo Delgado, and name reservation have streamlined Inhambane, Maputo City, Niassa and processes, but internet failures can cause Half of the steps to start a business can Zambezia to up to four days in Manica slowdowns in some provinces. Since be completed relatively quickly. Across and Sofala. What accounts for the differ- March 2016, the Provincial Directorate the 10 locations measured, each of these ences is the time it takes for officials at of Labor has simplified the process for a five procedures takes an average of one the company registry to review the docu- company to operate legally by allowing day: signing the articles of association mentation and the registrar’s availability information regarding the number of before a notary or authenticating the to sign the registration certificate. company workers and their personal signatures of the articles of association; identification details to be submitted opening a bank account and paying the Despite it being faster to request an electronically. The process can be company registration fees; submitting a operating license via the simple notice completed in a day, but in half of the simple notice; registering the company procedure (one day on average),19 in provinces surveyed (Cabo Delgado, and the employees with the National many cities entrepreneurs still request Manica, Nampula, Tete and Zambezia) Social Security Institute; and obtaining the Costmary simplified license, which it can take up to two days. In Cabo workers’ compensation coverage. takes two days on average.20 Different Delgado — among the slowest places in levels of use of the license by simple Mozambique — the internet crashes two What are the main drivers of notice reflect a lack of awareness and or three times a week even if just for a few cost? information about the process and its hours, disrupting electronic systems and Starting a business in Mozambique is requirements and legal implications. delaying the process. costly, ranging from 68.4% of income In some provinces, such as Nampula, per capita in Cabo Delgado (almost twice 40 Doing Business IN MOZAMBIQUE 2019 FIGURE 3.2  Getting the company’s articles of association published in the official gazette takes over two weeks longer for entrepreneurs outside Maputo City Total time in Nampula: Time (days) 40 days 40 Nampula 35 Maputo City 30 25 Total time in 20 Maputo City: 17 days Publish the articles of association 15 in the official gazette 21 days 10 Register the company 3 days 5 5 days Register the company and publish the articles of association in the official gazette 0 1 2 3 4 5 6 7 8 9 10 11 Procedure Source: Doing Business database. Note: Procedure 5 in Maputo City is related to the tax registration and the obtaining of a unique tax identification number (NUIT). This takes 3 days the average cost for SADC economies) association in the official gazette. Instead, Inhambane. These include: a fixed fee for to 132.8% in Zambezia. Mozambique is they may use a “simplified abstract” company registration, which ranges from among the most expensive economies containing the main articles, as speci- MZN 1,000 to 1,800; a registration fee globally for starting a business and fied by the new Commercial Code.22 This based on the share capital of the company the sixth most expensive location in simplified abstract has started to come (MZN 1,032 or $17)23; and administrative Sub-Saharan Africa. Across provinces into use in Cabo Delgado, Gaza and Tete, fees for publication of the abstract, which in Mozambique, the cost to register a cutting publishing costs in half. In the rest range from MZN 0 and 800. The current company and publish its articles of asso- of the provinces it is still more common to fee schedule system leaves broad room ciation in the official gazette accounts for publish the complete text of the articles of for interpretation by the registrar. The 95% of the cost of starting a business association for various reasons. Lawyers result is that entrepreneurs are charged (figure 3.3). This significant expense is across these provinces expressed a different fees depending on where they the result of the steep fee charged by the lack of awareness of the reform and the register the company, especially the national printing press, a fee that is the legal implications of using the simplified administrative fees for publication of the same throughout Mozambique and is abstract. In Nampula lawyers mentioned abstract.24 calculated based on the number of lines that their clients preferred to publish the in the publication abstract. Publication entire text of the articles of association Across the provinces measured, postreg- fees have nearly tripled since 2015, from to protect themselves legally. In Maputo istration costs account for less than 4% MZN 1,020 ($17) to MZN 2,820 ($46) City and Niassa the company registry has of the total cost to start a business. Cost for each 25-line page.21 Recent updates in not yet implemented the reform. variations across provinces mainly stem ministerial decisions have also increased from the cost of obtaining an operating other costs nationwide of starting a busi- Calculating the cost of the commercial license. In Cabo Delgado, Inhambane, ness, such as company registration. registration procedure is complex, as Manica, Maputo City and Niassa entre- entrepreneurs are required to pay three preneurs usually apply for a license Since May 2018, the government has different fees, which in the Doing Business by simple notice, at no cost, instead given entrepreneurs the option not to case study total between MZN 2,457 of applying for a simplified operating publish all the pages of their articles of ($40) in Tete and MZN 3,062 ($50) in license. In contrast, in other provinces it STARTING A BUSINESS 41 continues to be common for entrepre- FIGURE 3.3  Registration and publication fees account for most of the costs to start neurs to apply for a simplified operating a business license, thus increasing the cost by MZN 94.7% Registration and publication fees Cost 2,128 ($35).25 Registration fees – MZN 2,780 (US$45) (% income per capita) Publication fees – MZN 24,375 ($397) In the past few years Mozambique has carried out different reforms that aim to improve the business environment. While major steps have been taken to make the process more efficient, starting 110.8 Publication fees a business in Mozambique has a long way to go toward regional good practices 56.4 (box 3.2). 3.7% Postregistration 10.3 11.0 Registration fees Simplified operating license – MZN 1,064 (USD 17) WHAT CAN BE IMPROVED? 1.6% Preregistration Cabo Delgado, Remaining Certificate of name reservation – MZN 310 (USD 5) Gaza, Tete provinces Reduce the cost and remove Authenticated company deed – MZN 145 (USD 2) or streamline the process Source: Doing Business database. of publishing the articles of association in the official gazette that they need not publish the full version association to Maputo city for publica- Publishing a company’s articles of asso- of the articles of association in the official tion in the official gazette. ciation is the most time-consuming and gazette. Despite efforts to reduce the expensive procedure across Mozambique, cost by allowing the publication of this Mozambique could also stop making representing more than half of the total shorter version or “simplified abstract,” publication of the articles of association time and 85% of the total cost of starting the cost of publication continues to be a prerequisite for subsequent procedures. a business. To simplify the process and the highest of all the procedures needed Entrepreneurs should be able to continue make it cheaper and faster, Mozambique to start a business in Mozambique the process of starting a company using could eliminate this publishing require- and one of the main economic hurdles their NUEL (registration number) — proof ment. Economies such as Burundi and faced by entrepreneurs. Cutting fees of the existence of the company — thus Mauritania have done just that to make and promoting the use of the simplified reducing the time for opening a business. starting a business easier. Mozambique abstract would make starting a business could introduce legal and institutional less expensive. Those cities that use the Improve the implementation of reforms that would allow the company simplified abstract — Cabo Delgado, Gaza the license by simple notice at registry to publish the basic information and Tete — could lead the way as models the one-stop shop on each newly registered company — at in this effort. The uneven performance The introduction of the license by simple no cost — on an official government across provinces points to opportunities notice was one part of a larger govern- website or the one-stop shop website, for peer learning. ment effort to further simplify and reduce saving an original copy for consultation. the cost of initiating business activity. Other economies in the region have intro- Additionally, better communication In 2012 simplified licensing procedures duced reforms to simplify the registration between the company registry and were introduced, creating an alternative process. For example, Burkina Faso, Cabo the national printing press would help system for certain types of commercial Verde, Cameroon, Côte d’Ivoire, Djibouti, reduce the time needed to publish a and industrial activities that do not carry Gabon, Madagascar and Togo enabled company’s articles of association in the health, environmental or security risks.26 notices of incorporation to be published official gazette. The one-stop shops In 2017 the simplification of licensing on the one-stop shop website. could have representatives from both allowed certain sectors, such as small- the registry and the national printing scale retail and professional service If it is not viable in the short term to elimi- press on the premises. Once registration providers, to submit a simple notice nate the physical publication requirement of the company is complete, the repre- for commencement of operations. This through the national printing press, sentative of the national printing press communication takes one day and is Mozambique could make an active effort could budget the publication costs and free.27 to inform entrepreneurs in all provinces send an electronic copy of the articles of 42 Doing Business IN MOZAMBIQUE 2019 BOX 3.2 Recent regulatory reforms making it easier to start a business in Mozambique Starting a business in Mozambique has become much simpler in recent years. The Commercial Code, the legal framework for business in Mozambique, was first published in 2005 (Decree 2/2005 of December 27) and has been modified several times since, with the aim of simplifying the business start-up process and making it more flexible. Among the changes was the elimina- tion of the minimum capital to establish a limited liability company in 2009 (Decree No. 2/2009 of April 24).a In 2014 the gov- ernment introduced a single form (formulário único) for opening a company and initiating business activity. This form combines application requests for various steps — name reservation, company registration, business licensing and tax, and labor and social security registration. Moreover, Decree 39/2017, which entered into force on July 28, 2017, further streamlined the legal frame- work to obtain business licenses for certain low-risk activities. As part of simplifying the business start-up process, Mozambique is gradually implementing electronic platforms for some proce- dures. The Ministry of Labor, Employment and Social Security developed an electronic system for posting employee information, called the e-FRN (Sistema Electrónico da Folha de Relação Nominal), which began operating in March 2016.b Moreover, a new social security regulation was approved in 2017, allowing for the registration of workers in the National Social Security Institute through an online system (Sistema de Informação de Segurança Social de Moçambique or SISSMO).c However, recurring technical glitches and a lack of technical support have prevented optimal use of the new platforms. To improve the process of starting and operating a business, the national tax authority has made an effort to reduce the number of internal interactions and, consequently, the time required to obtain a tax registration number and begin operations. In Maputo the implementation of this reform has shaved six days off the wait for obtaining the stamped declaration of commencement of operations from the tax authority.d Entrepreneurs now receive the declaration the same day of submission and do not have to wait for registration to be completed, since this is done internally at the tax authority.e a. The Commercial Code adopted in 2005 established a minimum capital requirement of MZN 20,000 ($326) for the establishment of a closely held limited liability company (Sociedade por Quotas). b. Ministerial Order No. 104/2015 of November 27 approved a new format for providing employee information. c. Decree No. 51/2017 of October 9 approved social security regulations. d. Information on the results of implementation of the tax authority’s reforms is available only for Maputo, as global Doing Business measures Maputo annually. Doing Business in Mozambique 2019 is the first subnational benchmarking exercise. e. This change was made via internal guidelines (Note No. 200/DAG-DGI/2016 of August 2016). While a simple notice has potential bene- make prospective entrepreneurs aware of Entidades Legais) and for notary services fits, there are challenges associated with the new services available. Mozambique (TABLE de Emolumentos dos Actos its implementation. In some provinces could look to Burkina Faso, which publi- Notariais) are publicly available on notice (Cabo Delgado, Inhambane, Manica, cized the launch of its one-stop shop for boards but are not accessible through one Maputo City and Niassa) entrepreneurs business registration both through media centralized agency or an official website prefer obtaining a simple notice, while in coverage and through presentations at and are confusing for entrepreneurs and others (Sofala, Tete and Zambezia) only meetings of business associations orga- the public servants who provide the a handful of these licenses have been nized by the chamber of commerce.28 services. To improve transparency, fee issued since the law went into effect. In schedules to set up a business should be Gaza and Nampula the one-stop shop Simplify the current fee clear and easy to access. Despite sharing still has no experience processing a schedules for company the same legal basis in all provinces, simple notice; in fact, entrepreneurs in incorporation and make them charges for signature authentication, these provinces do not know that they publicly available at the the simplified abstract and the registra- can use this procedure. In some cases, company registry or online tion certificate vary from province to the one-stop shop demands more A lack of clarity in the application of province due to ambiguities in the law. requirements for this license than speci- regulations creates confusion among For example, notaries in Zambezia apply fied in the law. The lack of information both entrepreneurs and authorities and a “special mentions” fee of MZN 50 per and the unequal interpretation of the law can lead to delays, differences in esti- signature for the authentication of signa- by public servants in the one-stop shops mates and discretion in enforcement. tures, while in other provinces the same inhibit proper implementation of this Moreover, overly complicated regulations service costs MZN 20 per signature. reform. To implement and consolidate the can potentially undermine their intended Because the applicable fees are contained use of the simple notice nationwide, the policy aims. Across Mozambique, fee in several articles of the law, it is easy one-stop shops should strengthen staff schedules for the company registry for notaries and registrars to interpret training and invest in public outreach to (TABLE de Emolumentos do Registo das the law differently.29 Registration costs STARTING A BUSINESS 43 should be as transparent as possible, to By improving coordination and having all the agencies make the application of regulations and involved in starting a business represented at one-stop fee schedules more predictable and to shops, entrepreneurs could set up their business in one trip, reduce informal payments. significantly reducing the complexity of the current process. An analysis published in the Doing Business 2013 report concluded that those also do not make registration fees depen- Mozambique could consider improving economies where fee schedules are dent on start-up capital. Moreover, most coordination among the relevant agencies publicly available tend to have lower fees. good-practice economies provide infor- with a view to streamlining procedures Specifically, starting a business costs mation online at a dedicated website to and avoiding redundancies and inef- 26% of income per capita on average guide entrepreneurs through the process ficiencies. For back-office workflow to in economies where fee schedules are of starting and opening a business, function properly, the government must publicly available but 52% where they including the fees charged. create comprehensive legislation that are not. While in OECD high-income ensures clear boundaries and responsi- economies information on start-up fees Improve coordination among bilities among one-stop shops and the tends to be easily accessible through stakeholders and enhance back- different institutions involved in the start- the website of a government agency or office workflow in one-stop up process. One way to motivate the use through public notices, obtaining fee shops of one-stop shops might be to provide a schedules for company incorporation is The process of starting a business in legislative basis for them to have exclu- most limited in Sub-Saharan Africa and Mozambique is complex since it involves sive authority for company registration. the Middle East and North Africa, where many interactions. Entrepreneurs must it is more common to meet with an offi- deal with at least seven different agen- The integration of the government institu- cial to obtain this information.30 cies31 and visit some agencies more than tions themselves is essential. Some good once when opening and operating a new practices that could lead to integration The cost to start a business globally business. They must visit the company would be to implement the single form averages 23.9% of income per capita; in registry twice — once to reserve a name or introduce a unique business identifier Mozambique it is far higher, averaging and again to register the company that is the same for all agencies.32 Another 111.2% of income per capita. This is deed. Similarly, the postregistration intermediate step would be to integrate mainly because entrepreneurs have to process involves six steps and requires the registration systems of the company pay several fees when registering a busi- two interactions with the tax authority. registry and the Department of Labor, ness, including the significant expense of Streamlining the entire process is a key Employment and Social Security. By publishing the articles of association in factor that could make starting a busi- improving coordination and having all the the official gazette and registration fees ness more efficient. Currently, going to agencies involved in starting a business that vary according to the share capital a one-stop shop to obtain the certificate represented at one-stop shops, entrepre- of the company. Some of these require- of name reservation, authenticate signa- neurs could set up their business in one ments and their respective fees could be tures and register the company, among trip, significantly reducing the complexity removed and others merged into a single other procedures, is possible in only two of the current process. It is imperative fee. Most good-practice economies provinces, Maputo City and Tete. for the government to take these initial charge only a fixed registration fee that steps — implementing the single form or does not depend on the capital but on the The government has made noticeable unique business identifier and creating complexity of the administrative process progress in creating one-stop shops a single physical interface — prior to to register a company. For example, in across the country, and it should continue moving toward electronic platforms. This Georgia — among the top five performers its efforts to enhance their back-office could allow Mozambique to establish a globally — only one registration fee is workflow. Currently, government agen- more efficient one-stop shop structure charged, and it varies depending on cies that are represented at one-stop and help facilitate its transition to a more whether registration is normal or expe- shops do not have operating systems agile electronic system. dited. In Portugal the registration fee that can share information with each varies depending on whether it is done other. Moreover, not all government Increase efficiency by improving online or in person. In Canada, another agencies have representation at one-stop the implementation of the top performer, there is a fixed cost to file shops. For these reasons, it is still more e-BAÚ and introducing online for business incorporation electronically. common for entrepreneurs to visit agen- procedures Burundi, Côte d’Ivoire and Mauritius, all cies individually. In 2014 the government of Mozambique top performers in Sub-Saharan Africa, launched the e-BAÚ system, an 44 Doing Business IN MOZAMBIQUE 2019 integrated platform for service delivery 14. The form listing company employees contains detailed information on each worker. It must that aims to connect the one-stop shops NOTES be completed every April based on March and other institutions relevant for busi- data. When the start of business activity ness start-up. It has taken years for the 1. International Monetary Fund. 2017. Regional occurs after April, the employer must fill out Economic Outlook: Sub-Saharan Africa. the form within 30 days. This procedure can system to develop, and the platform 2. OECD. 2017. Enhancing the Contributions of be completed online, on the website of the is currently being used for business SMEs in a Global and Digitalised Economy. Ministry of Labor, Employment and Social licensing only. Further implementation of Available at https://www.oecd.org/mcm/ Security (http://www.mitess.gov.mz:7081/ documents/C-MIN-2017-8-EN.pdf. FolhaNominal/RG/RegistarEmpresa.aspx). the e-BAÚ platform will improve commu- 3. Soto, Hernando de. 2000. The Mystery of The electronic submission of the form is part nication between the various government Capital: Why Capitalism Triumphs in the West of the declaration of the commencement of agencies; enable entrepreneurs to apply and Fails Everywhere Else. New York: Basic operations and employees with the Provincial Books. Directorate of Labor, Employment and Social for different procedures in just one place; 4. World Economic Forum. 2017. The Global Security. provide information on requirements Competitiveness Report 2017-2018. Available at 15. The publication of the articles of association for starting a business, such as what http://www3.weforum.org/docs/GCR2017- in the official gazette is mandatory by law 2018/05FullReport/TheGlobalCompetitivenes (Decree No. 2/2005 of December 27, Article fees apply; and could even introduce sReport2017%E2%80%932018.pdf. 247). the possibility of making electronic 5. The current five-year strategy for improving 16. The publication abstract sent to the national payments. In the long run, greater time the business environment in Mozambique printing press contains all the relevant (“Estrategia para a Melhoria do Ambiente de information of the articles of association that efficiency could be achieved by having negocios em Moçambique,” or EMAN II 2013- the registry requires to be published. a company registration process that is 2017) follows the previous strategy (EMAN 17. Entrepreneurs can reduce the time to publish completely online. 2008-12). These documents have guided the the articles of association by submitting them government’s actions on this front in the last directly at the national printing press the day decade. after the company’s registration, after being Several economies in Sub-Saharan 6. Among the economies of Sub-Saharan Africa, informed of the cost of publishing them in Africa have already introduced some only in Botswana, Chad, Eritrea, Namibia, the the official gazette and paying the publishing Republic of Congo and Somalia does it take fee at the bank. The procedure takes longer online steps for the start-up process. longer to start a business than in Nampula. outside of Maputo City, as the offices of the For example, Mauritania made starting 7. The Commercial Code was reformed via national printing press send the articles of a business easier by combining multiple Decree No. 1/2018 of May 4. association to Maputo City only once a week 8. One-stop shops in Mozambique, called BAÚs, and the procedures for payment are more registration procedures; it is now are local agencies that concentrate several complex and slower. possible to register a company through public services in one location with the goal 18. The cost for these services is generally a a “Companies and Business Registration of simplifying and facilitating interactions percentage of the total amount charged by the between citizens and the public sector across national printing press to publish the articles Integrated System” that shares the infor- the country. of association. mation with the tax and social security 9. In addition, companies must present the 19. In Cabo Delgado, Inhambane, Manica, authorities through a single form. Such registration form and their partners’ and Maputo City and Niassa it is more common representatives’ identity documents. for entrepreneurs to obtain a license by simple electronic single interfaces for business 10. Under the Doing Business case study, the notice. start-ups not only simplify the process of license to operate would fall under the 20. The simplified operating license takes longer starting a business but can make proce- simplified regime. This covers commercial and than the one-day timeframe mandated in industrial areas of economic activity that do Decree No. 39/2017 of July 28. dural requirements more transparent not pose a threat to the environment, public 21. Ministerial Order No. 58/2015 of November and easier to access. A successful imple- health, safety or the economy in general. 13 lists the fee for publication in the official mentation of electronic one-stop shops Decree No. 02/2008 of May 12 is the first gazette as MZN 1,020 per 25-line page, while legal instrument dealing with the simplified the current fee is MZN 2,820 per 25-line requires collaboration across agencies. licensing for certain low-risk activities. This page, according to Ministerial Order No The national government, municipalities was later consolidated by means of Decree 79/2017 of December 27. and the private sector have critical roles 05/2012 and more recently by Decree 22. Decree No. 1/2018 of May 4, which 39/2017. modified the Commercial Code, states that to play in simplifying the administra- 11. The simple notice option is available to retail entrepreneurs may publish a summarized tive process. Meaningful and ongoing businesses specializing in sectors such as version of the articles of association in the consultations among these groups of office supplies, clothing or shoes, or service official gazette. providers in legal, accounting and engineering 23. According to the fee schedules of the stakeholders will serve to ensure that the areas (Article 9 of Decree No. 37/2017 of July company registry (TABLE de Emolumentos process truly fulfills users’ needs. Building 28). do Registro das Entidades Legais) listed in on the skills and knowledge of staff is also 12. In some provinces, such as Cabo Delgado, Ministerial Order No. 2/2016 of January Inhambane and Manica, it is not mandatory 6, taxes on a company’s capital are 0.4% key for proper implementation. to submit a hard copy of the form listing for start-up capital of up to MZN 5 million contracted workers, but this is done in ($81,405) and 0.03% for capital exceeding practice. that amount. The Doing Business case study 13. According to Article 87 of Labor Law assumes a start-up capital of MZN 257,970 23/2007 of August 1, the Labor Inspection ($4,200). Office (Inspecção Geral de Trabalho) verifies 24. The applicable registration fees are located in that the schedule meets the maximum daily different sections of the law, and some articles and weekly hours established in the labor are inconsistent or redundant, making the law laws. STARTING A BUSINESS 45 confusing for entrepreneurs and the public servants at the company registry. 25. The cost is 50% of the minimum monthly salary of a public servant, which is updated every year in April. 26. See Decree No. 5/2012 of March 7. 27. See Decree No. 37/2017 of July 28. 28. International Finance Corporation. 2009. How Many Stops in a One-Stop Shop? A Review of Recent Developments in Business Registration. Washington, DC: World Bank. Available at: https://openknowledge.worldbank.org/ bitstream/handle/10986/27886/58787 0WP0Howma10BOX353819B01PUBLIC1. pdf?sequence=1&isAllowed=y. 29. The fees can be found in Article 15 1.b of the fee schedules for notaries and Article 18 of the fee schedules for the company registry, both contained in Ministerial Order No. 2/2016 of January 6. 30. World Bank. 2013. Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises. Washington, DC: World Bank Group. 31. In Maputo City entrepreneurs interact with the following seven agencies: the company registry, the bank, the tax authority, the one-stop shop, the Provincial Directorate of Labor, the National Social Security Institute and the insurance company. In the rest of the provinces entrepreneurs also interact with the national printing press. In Gaza and Manica, in addition to visiting the company registry, entrepreneurs also visit the public notary to sign the company deed. 32. Although the Mozambican government has already developed a single form to open a business and start commercial activities, in practice, public sector agencies set their own requirements and prefer to use their own forms. Registering property MAIN FINDINGS ¡ Transferring property is easiest overall in Zambezia, where the transfer tax payment can be authorized by the municipality’s urban planning department. It is most difficult in Sofala, where transfers take more than 80 days to complete. ¡ Maputo City would move up 20 positions in the Doing Business ranking for registering property if it adopted best practices found elsewhere in Mozambique. ¡ Lack of coordination among agencies involved in urban land management makes the process of transferring property lengthy and cumbersome. ¡ The government has improved record-keeping of property titles and cadastral plans by digitizing historical records. However, there is still room to increase information transparency and communication between registries and municipalities. RegistERING PROPERTY 47 N early two decades ago, in 2000, As urban populations grow, well-defined uso de aproveitamento da terra). The DUAT southern Mozambique was hit property rights also play a key role in is adjudicated based on conditions that with heavy rainfall that flooded the development of cities by securing need to be met within two years, which the Limpopo River Valley. Dozens of land tenure rights for households and usually include the completion of a house people died, thousands were displaced companies. A study in Brazil showed that or some other building. Once improve- and crops were wiped away. Xai-Xai and urban land titling programs had a positive ments to the land are completed, the Maputo were among the worst-affected effect on access to credit. A program to municipality transforms the DUAT into cities, with buildings three meters under distribute land titles to households led the land use title, which can be registered water. One of the casualties of this to a threefold increase in access to credit at the property registry. The property on disaster was the property registry books and in the consumption of durable goods. the land can be used as collateral and containing thousands of ownership It also had an impact on child labor; with sold, with ownership transferred through records. The property registry building in secure tenure, adults felt comfortable a deed. Xai-Xai (in Gaza province) was located leaving the property unguarded and scarce meters from the river and was working outside of the household instead Providing an efficient, transparent and hard hit. The effect was immediate: prop- of sending their children out to work.3 affordable system to register new titles erty transfers were delayed and obtaining and transfer existing ones is an important proof of ownership became an uphill first step toward guaranteeing secure battle. HOW DOES REGISTERING access to land and improving access to PROPERTY WORK IN credit. While the registering property Secure property and land registry MOZAMBIQUE? indicator does not focus on the initial records — and therefore land rights — are allocation of property rights under the key determinants of economic develop- After Mozambique’s 17-year civil war DUAT, it does look at aspects that are ment. Land markets in both rural and ended, in 1992, land reform was at the key to continued land tenure security, urban settings should be supported by forefront of national policy discussion. As such as property transfer and registration. land administration systems that define displaced families returned to land they Property rights are weakened if the land property rights, guarantee security of had previously owned, conflict ensued registry system does not reflect all trans- tenure and generate information to between the displaced and those who fers of title, and inefficient procedures support property valuation and taxa- were living on their property. To strike a for ownership transfers can discourage tion. With the protection of secure title balance between safeguarding commu- registration, undermining institutions that guaranteed by a reliable land registration nity interests and facilitating investors’ ensure secure land rights. system, land can be used to spur the access to land, the government initiated creation and growth of new businesses. a broad policy review, which led to a Beyond the Land Law, two other legal Secure land titles enable owners to use new National Land Policy in 1995 and a instruments govern property registra- their property as collateral to obtain loans. series of laws affecting property registra- tion in Mozambique: the 2006 Urban tion — including the 1997 Land Law. Law and the Property Registration Code. The flooding in 2000 brought to light the Pursuant to these laws, registries use a dire consequences of property records In Mozambique land tenure is leasehold, deeds system, and three main institu- that are not secure. Natural disasters as the state is the primary owner of the tions are involved in the land transfer aside, registry books deteriorate — due land. The 1997 Land Law established process: (i) the property registry, respon- to subpar storage conditions and the a right for individuals to lease and use sible for maintaining ownership records; wear and tear from multiple consulta- land. This use and benefit right is known (ii) the tax authority or municipal tax tions — and must regularly be transcribed, by the acronym DUAT (Direito de Uso office, responsible for the fiscal cadastre leaving room for human errors and fraud. e Aproveitamento da Terra). It does not (registo matricial) (box 4.1); and (iii) confer full ownership of the land itself, but the municipal urban planning depart- Having a sound property registration it is a secure and long-term user right that ment, in charge of issuing the DUAT and system is critical for entrepreneurs. can be renewed. land use title as well as maintaining the With banks requiring more than 90% cadastral plans. The property registry is of the value of the loan as collateral in Full ownership of property on the overseen by the National Registry and Mozambique,1 in 2018 access to finance land — such as buildings and other Notary Directorate, under the Ministry was deemed the most problematic factor improvements — can, however, be trans- of Justice, Constitutional and Religious for doing business in the country.2 Yet ferred or encumbered. Before a property Affairs (MJACR). Both the tax authority most real estate in Mozambique remains can be transferred, the DUAT must be and property registries are regulated formally unregistered. converted into a land use title (título de at the national level and operate at the 48 Doing Business IN MOZAMBIQUE 2019 WHAT DOES REGISTERING PROPERTY MEASURE? Doing Business records the full sequence of procedures necessary for a business to purchase a commercial property from another business and formally transfer the property title to the buyer’s name. The process starts with obtaining the required documents, such as a copy of the seller’s title, and ends when the buyer is registered as the new property owner. Every procedure required by law or necessary in practice is recorded—along with the associated time and cost—whether it is the responsibility of the seller or the buyer and even if it must be completed by a third party on their behalf. In addition, Doing Business assesses the quality of the urban land management system through an index measuring the system’s reliability, transparency and coverage; the availability of dispute resolution mechanisms; and whether men and women have equal ownership rights to property. Rankings on the ease of registering property are based on the procedures, time and cost to register property as well as the quality of land administration index (see figure). Registering property: measuring the efficiency and the quality of the land administration system Rankings are based on distance to frontier scores for four indicators Measures whether the land registry and mapping system Days to transfer Cost to transfer (cadastre) have adequate infrastructure to guarantee high Reliability property between two property, as % of standards and reduce risk of errors local companies property value Measures whether and how the land administration Transparency system makes land-related information publicly available Time Cost 25% 25% Measures the extent to which the land registry and 25% 25% Reliability, Coverage mapping system (cadastre) provide complete geographic Procedures Quality of land transparency and coverage of privately held land parcels administration coverage of land index administration system; protection against land Measures the accessibility of conflict resolution Dispute mechanisms and the extent of liability for entities or Steps to transfer disputes; equal access resolution to property rights agents recording land transactions property so that it can be sold or used as collateral Equal access Measures the ownership rights of unmarried men and to property rights women as well as of married men and women provincial level, whereas the municipal property value to transfer property. The (LAIS)6 — containing ownership and tax office and municipal urban planning time needed to complete the process cadastral information. Among the CPLP department function at the local level.4 ranges from 37 days in Inhambane to countries, Mozambique’s performance 83 days in Sofala (table 4.1). The time on the quality of land administration Registration of the land use title at the tends to be faster and less expensive index lags behind that of Brazil, Cabo property registry is required to make than the average in the Southern African Verde and Portugal. ownership opposable to third parties.5 Development Community (SADC), However, in practice, registration rates Sub-Saharan Africa and the Community Among the 10 locations measured, are low across the country and are of Portuguese Language Countries transferring property is most affordable enforced mostly by banks if the prop- (CPLP). However, Mozambique lags on in Maputo City and in Zambezia (5.2% erty is subject to a mortgage or used as the quality of land administration index, of property value), and is fastest in collateral. Most commonly, new owners scoring an average of 7.9 points. This is Inhambane (37 days). It is most difficult will request the municipality to reissue a lower than the averages in the SADC in Sofala, where transfers take nearly new land use title under their name; this (11 points), Sub-Saharan Africa (8.8 double the time needed in any other loca- is used as proof of ownership, even in points) and the CPLP (8.7 points), and tion to complete the process. court disputes. significantly lower than Rwanda, the best in the region (figure 4.1). Rwanda Because property transfers are governed How does the process compare? is the only country in Sub-Saharan by national legislation, the process is A Mozambican entrepreneur typically Africa that has established a complete largely similar across the country. The undertakes seven to eight procedures, and fully digital database — the Land steps to transfer property are grouped waits 47 days and pays 5.7% of Administration Information System into three main phases — preregistration, RegistERING PROPERTY 49 BOX 4.1. Creation of municipalities in Mozambique and the impact on property registration Until the late 1990s, urban areas in Mozambique were under the political and administrative authority of the central government. Municipal legislation was implemented in early 1997, resulting in the first municipal elections later that year. In total, 23 cities were classified as eligible to become municipalities (autarquia local), among them Maputo and the 10 provincial capital cities. Municipalities correspond to the territorial demarcations of urban areas (towns and cities)a and have administrative, financial and patrimonial autonomy.b They are responsible for: i) local economic and social development; ii) environment, basic sanitation and quality of life; iii) utility services; iv) health; v) education; vi) culture, leisure and sport; vii) local policing; and viii) urbanization, construction and housing. In 2006, when the government of Mozambique sought to advance its decentralization agenda, it started gradually devolving central powers to local administrations.c The transfer was initially planned to be finalized by 2010, with a further extension of up to two years. Within the realm of urban land management, revenues from property taxes and transfer duties were transferred to municipal budgets from the tax authority. This also means that municipalities became responsible for: i) implementing and maintaining the cadastre in urban areas for the purposes of collecting property taxes (IPRA) and the local property transfer tax (SISA),d among other local fees and taxes; ii) developing an urban master plan; iii) assessing local property valuese; and iv) issuing titles for land use rights.f This aspect of decentralization is, however, still ongoing and is taking longer than expected. Although all municipalities are col- lecting the SISA tax, not all fiscal cadastres have been transferred. This is the case in Pemba (Cabo Delgado), Nampula (Nam- pula) and Tete (Tete), adding layers to the process of transferring property. In these locations the property tax certificate, which includes the value of the property, is still issued by the tax authority. The lack of data exchange between the municipalities and the tax authority makes the process of paying taxes cumbersome. To pay the transfer tax — which is calculated using the fiscal ca- dastre’s property value — the seller needs to obtain a property tax certificate from the tax authority and take it to the municipality for its assessment. Once the tax is paid and the transfer of ownership completed, the owner needs to return to the tax authority to update its database with the most recent property value. a. This structure is established in Articles 272 and 273 (Autarquias Locais) of the Constitution of the Republic of Mozambique. b. Law No. 2/97 of May 28 (Lei de Bases das Autarquias) lays out local authorities’ responsibilities. c. Key laws include Decree No. 33/2006 of August 30 (Transferência de Funções e Competências dos Órgãos do Estado para as Autarquias Locais), Decree No. 58/2009 and Decree No. 46/2011. d. Decree No. 63/2008 of December 30 (Código Tributário Autárquico) defines the local tax structure. e. Decree No. 61/2010 (Determinação e Correcção do Valor Patrimonial) amends the way property values are determined. f. The 1997 Land Law establishes the right to the use and benefit of land (Direito de Uso e Aproveitamento da Terra). registration and postregistration — with at provincial agencies. In Cabo Delgado, value of the property at the municipal most procedural differences among loca- Nampula and Tete, where the fiscal tax office, or the tax authority in the case tions occurring in this last phase. Before cadastre has not yet been transferred of Nampula (Nampula), Pemba (Cabo registration, the parties must obtain from the tax authority to the municipality, Delgado) and Tete (Tete). Regardless of certificates establishing the ownership five steps take place at the provincial where it is requested, obtaining the certif- and assessment status. A lawyer also level and two at the municipality. In the icate takes from 7 to 10 days (figure 4.2). conducts a due diligence study. In the remaining locations the process is evenly registration stage, the buyer pays the SISA distributed between the municipality and Once the transfer is registered, it can property transfer tax at the municipality, the provinces, requiring three interac- take up to a month to update the and the notary prepares and notarizes tions with each (table 4.2). municipality’s cadastre. In practice, this the sales deed. The buyer then submits is where the greatest variations in time it at the property registry to record the How does the time vary? are found. In Inhambane (Inhambane), transfer of ownership. After the property The longest delays are in steps done at Maputo (Maputo City) and Quelimane is registered, the owner must comply the municipality — particularly obtaining (Zambezia) this involves merely with municipal requirements, updating the property tax certificate, paying the updating the municipality’s database, the urban and the fiscal cadastres. In SISA tax and updating the cadastres. It whereas in the remaining cities a new three provinces — Cabo Delgado, Tete takes an average of 29 days to comply land use title must also be issued, and Nampula — fiscal cadastre updates with these requirements. For the due creating longer delays; such is the case are done at the tax authority. Maputo diligence study the seller must obtain in Beira (Sofala), Lichinga (Niassa) and (Maputo City) is the only city with four a property tax certificate (certidão do Tete (Tete). The minimum time required steps done at the municipality and three registo matricial) containing the assessed for this procedure, one week, is seen 50 Doing Business IN MOZAMBIQUE 2019 TABLE 4.1  Transferring property in Mozambique – where is it easier? Quality of land Registering property Cost admnistration Provínce Rank score Procedures Time (% of property index (City) (1–10) (0-100) (number) (days) value) (0–18) CPLP 54.14 6.7 52 6.2 8.7 SADC 56.22 6.1 50 6.8 11.0 SSA 52.62 6.2 54 7.6 8.8 Mozambique 53.26 7.4 47 5.7 7.9 Zambezia (Quelimane) 1 56.72 7 39 5.2 9 Gaza (Xai-Xai) 2 54.78 7 41 5.5 7.5 Inhambane (Inhambane) 3 54.77 7 37 5.6 7 Niassa (Lichinga) 4 54.18 7 42 5.6 7 Manica (Chimoio) 5 53.61 7 47 5.5 7 Maputo City (Maputo) 6 52.94 8 43 5.2 7.5 Tete (Tete) 7 52.61 8 47 6.4 10 Cabo Delgado (Pemba) 8 52.13 8 39 6.0 7.5 Nampula (Nampula) 9 50.92 8 47 6.1 7.5 Sofala (Beira) 10 49.94 7 83 6.2 9 CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Rankings are based on the average ease of doing business score for the number of procedures, time and cost associated with registering property as well as for the quality of the land administration index. The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019.” The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. (Timor-Leste is excluded from the CPLP average as it remains a “no practice” economy in the area of registering property.) in six locations — Chimoio (Manica), urban planning department. For example, municipality —  Nampula, Pemba and Inhambane, Maputo, Pemba (Cabo in Chimoio the mayor must approve the Tete — the lack of data exchange between Delgado), Quelimane and Xai-Xai (Xai- transfer tax payment request, resulting in municipalities and the tax authority Xai)  — while it takes 15 days in Tete, a delay of more than two weeks. In Beira means that the buyer has to submit an Lichinga and Nampula and 30 days in the municipal tax office director handles original copy of the updated property Beira (Sofala). In Beira and Lichinga senior the authorization, a process that takes 10 ownership certificate to the tax authority officials’ authorizations are required, and days. Inhambane and Quelimane do this to update the cadastral database (livro de in Tete there are also physical property step faster because the mayor delegated registo matricial). The update is done free inspections. this task to officers in the tax office. of charge, but it adds a week to the total time in the three cities. Obtaining the payment slip to pay the Updating the fiscal cadastre is an transfer tax takes a week on average, but additional step that adds time — and Issuing an ownership certificate and variations are significant. It takes only complexity — in Maputo, Nampula, registering the transfer deed in the prop- three days in Inhambane and Quelimane Pemba and Tete. In all municipalities erty registry takes at least twice as long in and five times longer in Chimoio. One overseeing the fiscal cadastre, except Sofala (22 days) as in the nine other cities. reason for the longer times is that the for Maputo, this update happens upon The property registry (Conservatória do municipal tax office or tax authority payment of the SISA transfer tax. In Registo Predial) in Sofala takes one week technicians may carry out a physical Maputo the buyer must submit an to issue an updated ownership certificate, inspection to reassess the property original copy of the updated owner- compared with three days in most of the valuation if they deem the declared ship certificate to the municipal tax other cities. Similar delays are found when transaction value too low. The process office to update the name of the owner. the buyer submits the deed to the prop- takes longer in cities that require the This adds one more day to the overall erty registry office to record the transfer authorization of high-ranking officials process. In locations where the cadastre of ownership. According to the Property such as the mayor or the director of the is under the tax authority and not the Registration Code, registration must be RegistERING PROPERTY 51 FIGURE 4.1  Compared globally, the cost of transferring property in most Mozambican provinces is competitive, but other aspects of efficiency and quality of land administration could be improved Quality of land Procedures Time Cost administration index (number) (days) (% of property value) (0–30) 0 0 0 5 economies*** 30 2 economies** RUANDA (global best) (global best) 5 economies**** RWANDA RWANDA (global best) 1 4 economies* 10 (global best) 2 20 SOUTH AFRICA RWANDA 3 30 MOZAMBIQUE 20 Inhambane ZIMBABWE Cabo Delgado, Zambezia Gaza 4 40 Niassa KENYA Maputo City SOUTH AFRICA ZIMBABWE KENYA Average 5 SADC 50 Manica, Nampula, Tete MOZAMBIQUE CPLP Maputo City, 12 SSA 5 Zambezia SADC MOZAMBIQUE Gaza, Manica, 10 Tete SADC 6 60 Inhambane, Niassa SSA CPLP Sofala, Zambezia MOZAMBIQUE Average SSA KENYA 8 Average CPLP 6 Cabo Delgado Gaza, Inhambane, Manica, Nampula, Sofala Cabo Delgado, Gaza, SOUTH AFRICA 7 Niassa, Sofala, Zambezia 70 CPLP Maputo City, Tete 6 Nampula Average Inhambane, Manica, SADC Niassa 7 8 Cabo Delgado, 80 ZIMBABWE Maputo City, SOUTH AFRICA Nampula, Tete Sofala SSA KENYA 9 90 8 0 *Georgia, Norway, Sweden and Portugal **Georgia and New Zealand ***Belarus, Georgia, Kiribati, Slovak Republic and Saudi Arabia **** Lithuania, Rwanda, Singapore and Taiwan, China CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The averages for Mozambique are the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. carried out within a maximum period of Due diligence procedures and the drawing up the sale and purchase agree- 30 days from the date of its submission.7 attorney’s drafting of the deed take up ment, takes approximately ten days in all At present, all registries comply with the one fifth of the time to transfer prop- provinces. Once the parties obtain both time limit. This process varies from three erty. In Mozambique, as in many other certificates, a lawyer conducts a title days in Inhambane, Manica, Nampula economies, prior to the transaction it is study. Although it is not required by law, and Niassa to up to a week in five other common for businesses to have a lawyer most companies prefer to hire a lawyer to provinces. However, in Sofala it takes 15 gather all necessary information to guide them through the process, prepare days to register the property, as the local confirm ownership and ensure that there the transfer instrument and conduct a authority lacks capacity and needs infra- are no liens or encumbrances against the due diligence study. structure improvements (figure 4.3). property. This process, which includes 52 Doing Business IN MOZAMBIQUE 2019 TABLE 4.2  Different layers of government are involved in the process of transferring properties in Mozambique Private Takes sector place in all Procedure Agency Provincial Municipal services provinces Preregistration Obtain ownership certificate Property registry (with territorial jurisdiction) — P Obtain property tax certificate Municipal tax office or tax authority (Cabo Delgado, Nampula and Tete) — — P Draft a sale and purchase agreement Lawyer's office — P Registration Pay the local transfer tax (SISA) Municipal tax office — P Notarize the sales agreement Notary's office or property registry with notarial function — P Apply for registration of the transfer of property Property registry (with territorial jurisdiction) — P Postregistration Update the land use title Municipal urban planning department — Update the property description for property tax purposes Municipal tax office — Update the property tax certificate Tax authority (Cabo Delgado, Nampula and Tete) — P Source: Doing Business database. The notary’s drafting of the deed is one of What are the main drivers of range from 0.04% in Inhambane to 0.2 the fastest steps in the process but even cost? % in Chimoio. In Nampula, Pemba and here, efficiency varies. By law, a notary In terms of cost, municipal fees are the Tete, the certificate is issued by the tax is required to draft the sales deed.8 The main drivers of differences, particularly in authority, free of charge. law also makes the notary responsible cities where a land use title must be reis- for checking the ownership certificate, sued. In Beira, Nampula and Tete, where Notary fees, registration fees and the company incorporation certificates and the title is reissued under the buyer’s transfer tax are regulated nationally and the SISA payment certificate.9 As a result name, this process costs more than the are the same across the country. The of a higher workload, coupled with lower property registry fees. Maputo is the only ownership certificate is obtained at the capacity, notaries in Tete and Zambezia city that does not charge for this update; corresponding property registry and take five days to issue the deed, while the remaining municipalities charge fees costs 0.05% of the property value (MZN in Inhambane and Sofala they take four. ranging from 0.2% of the property value 700, or $11.40, in the Doing Business Notaries in the other provinces take two in Manica to 1.2% in Tete (figure 4.4). case study) — the same fee nationwide. days. Property tax certificates are another Notarizing the public deed costs 0.67% source of income for municipalities. Fees of the property value, and property FIGURE 4.2  Time spent complying with municipal and tax authority requirements varies significantly across Mozambique Zambezia 18 8 8 18 44 Total time (%) Obtain property tax certificate at municipality Gaza 17 12 12 17 46 Obtain property tax certificate at tax authority Pay local transfer tax (SISA) at municipality Maputo City 16 16 16 2 50 Update urban cadastre at municipality Inhambane 27 8 19 54 Update fiscal cadastre at municipality Sofala 8 12 36 56 Update property tax certificate at tax authority Niassa 17 12 36 65 Manica 21 32 15 68 Cabo Delgado 18 18 18 18 72 Tete 15 11 32 15 73 Nampula 21 15 32 15 83 Source: Doing Business database. RegistERING PROPERTY 53 FIGURE 4.3  While all property registries meet the 30-day legal limit to register for businesses, good urban land manage- property, Sofala underperforms other provinces ment goes beyond efficiency. It ensures property owners a secure title, backed Manica 3 3 6 Total time (days) by a reliable urban land management Inhambane 3 3 6 system. A reliable, transparent, complete Niassa 3 3 6 and secure land administration system is associated with greater access to credit, Nampula 3 3 6 lower income inequality and lower inci- Cabo Delgado 3 5 8 dence of bribery at the land registry.12 Tete 5 5 10 Doing Business assesses the quality of this Gaza 3 7 10 system through five main dimensions: Zambezia 3 7 10 reliability of infrastructure (0 to 8 points), Maputo City 3 7 10 geographic coverage (0 to 8), transpar- Sofala 7 22 ency of information (0 to 6), land dispute 15 Register the property in name of buyer resolution (0 to 8) and equal access to Obtain ownership certificate property rights (−2 to 0). Results for Source: Doing Business database. these dimensions are then added for the overall score on the quality of land administration index. FIGURE 4.4  Differences in cost are mainly driven by postregistration procedures Maputo City 5.2 5.2 Cost (% do valor da propriedade) Quality standards are low across Zambezia 5.2 .04 5.24 Mozambique, as provinces score between 7 and 10 out of the 30 possible Gaza 5.2 0.3 5.5 points on the quality of land administra- Manica 5.3 0.2 5.5 tion index. Tete (10 points), and Sofala Inhambane 5.2 0.4 5.6 and Zambezia (9 points each) rank Niassa 5.6 above the Mozambican average on this 5.2 0.4 index, due to the progress they have Cabo Delgado 5.2 0.8 6.0 made in digitizing the cadastre and Nampula 5.2 0.9 6.1 implementing a geographic informa- Sofala 5.2 1.0 6.2 tion system (GIS). Cabo Delgado, Gaza, Maputo City and Nampula (all 7.5 points) Tete 5.2 1.0 6.4 stand out on transparency because of Due diligence Postregistration their commitment to deliver a legally & Registration binding document proving ownership Source: Doing Business database. within a specific deadline. Meanwhile, Inhambane, Manica and Niassa have registration ranges from 0.78% to 0.83% This is the second most burdensome the lowest score in the quality of land of the property value, depending on cost in transferring property. Although administration index (7 points) due to a whether a third ownership certificate not regulated, attorney fees do not vary paper-based records system and lack of copy is required. At 2% of the property significantly across the country. Most transparency (figure 4.5). value, the transfer tax is the most expen- lawyers providing these services are sive share of the costs. In 2008 the SISA located in the bigger urban areas such Reliability of infrastructure transfer tax rate was standardized across as Beira, Maputo and Nampula. From With land and buildings accounting for the country.10 It is applied to the transac- there, they provide services to the nearby between half and three-quarters of the tion value or the assessed value of the provinces. wealth in most countries,13 it is essential property, whichever is higher.11 for ownership records to be stored safely, Going beyond efficiency — the without undermining their legitimacy. Companies generally choose to hire a quality of land The gold standard is a fully digital, unified lawyer, paying legal fees that amount administration index or linked property registry and cadastral to 1.7% of the property value to guide While procedural complexity, time and mapping system that allows staff to them through the registration process. cost of property registration all matter electronically search and update records. 54 Doing Business IN MOZAMBIQUE 2019 FIGURE 4.5  Mozambique lags behind on all components of the quality of land of 8 possible points, Sofala, Tete and administration index Zambezia are the best performers in this Best performance in the region area, followed by Maputo City, which Rwanda 8 4.5 8 8 28.5 earns 2 points. The other provinces, which have paper-based registries and SADC 2.4 2.8 1.3 4.6 11.1 Quality of land administration (0-30) cadastres, are not awarded any points. Tete 3 1 6 10 Reliability of infrastrucure (0–8) Zambezia 3 1 5 9 Transparency of information Transparency of information (0–6) Making land-related information publicly Sofala 3 1 5 9 Geographic coverage (0–8) available — including fee schedules, time SSA 1.8 2.1 .7 4.4 9 Land dispute resolution (0–8) limits for service delivery and statistics CPLP 1.9 2.2 .8 4.1 9 on transactions — provides clients with Mozambique 7.9 critical information on the transactions they undertake and reduces mistakes Cabo Delgao 1.5 6 7.5 and opportunities for bribery. A good Nampula 1.5 6 7.5 practice is for registries and cadastres Gaza 1.5 6 7.5 to make such information publicly Maputo City available, either online or on a public 2 1.5 4 7.5 board. On the transparency of informa- Niassa 1 6 7 tion component, Cabo Delgado, Gaza, Manica 1 6 7 Maputo City and Nampula all score 1.5 Inhambane 1 6 7 points (out of a possible 6), while others obtain 1 point. In Mozambique anyone CPLP = average for the Community of Portuguese Language Countries who pays the required fees can obtain SADC = average for the Southern African Development Community information on land ownership at the SSA = average for Sub-Saharan Africa property registry14 (1 point). However, Source: Doing Business database. Note: The graph bars represent the scores on the reliability of infrastructure, transparency of information, geographic accessing cadastral information is limited coverage and land disputes resolution indexes. The scores on the equal access to property rights also compose this to interested parties. Documentary indicator and so are included in the quality of the land administration index’s score. requirements for property transfers and fee schedules for both cadastral and Paper records are vulnerable over time, system, they must fund its imple- property registry services are available exposing the database to damage from mentation and digitization of records. only upon request. The Beira, Inhambane, political unrest or poor climate condi- Maputo has scanned its cadastral plans Nampula and Quelimane municipalities tions. Computerizing historical records and — along with Inhambane, Lichinga, have a fee schedule (Código Municipal provides a backup system, protecting the Pemba and Xai-Xai  — has implemented de Postura), but it is not publicly avail- information. the SiGIT and begun the transition to fully able. Cabo Delgado, Gaza, Maputo City digital cadastral plans. Other municipali- and Nampula (0.5 points) have service While most property registries in ties have taken steps toward going digital charters committing to deliver a legally Mozambique still rely on paper records but have not yet been successful. For binding document that proves owner- (box 4.2), more advances have been example, in 2011-2013 Nampula set up ship within a specific deadline. There made in relation to the cadastral records. an electronic system for georeferencing are neither official statistics tracking Beira, Quelimane and Tete have digi- land parcels and issuing land use titles, the number of specific transactions nor tized most of their cadastral plans (2 but due to a lack of resources the elec- independent, specific mechanisms to points) and implemented a GIS (1 point). tronic system stopped being updated and file complaints in any of the cadastres or While Beira and Quelimane did so with became obsolete. registries. the use of the SiGIT system (Sistema de Gestão de Informação sobre Terras em In Mozambique there is no link between Geographic coverage Moçambique) — a GIS developed in 2012 the three main agencies involved in Globally, only 22% of economies have by the Ministry of Land, Environment and urban land management  — the prop- a land registry that includes all privately Rural Development (MITADER) — Tete erty registry, urban cadastre and fiscal held land plots, and 24% have cadas- digitized its cadastral plans and devel- cadastre — and properties do not have a tral mapping that covers all private oped its own GIS in 2016. While all unique identifier that would allow cross- land. Where land registries fall short municipalities have access to the SiGIT referencing of information. Earning 3 of complete geographic coverage, RegistERING PROPERTY 55 companies and individuals cannot be more than three years (0 points), while launched an official website that includes sure whether the areas not covered are in Sofala and Zambezia it takes between the documentary requirements and fee relevant to their interests.15 None of the two and three years (1 point). schedules to complete a land transac- Mozambican cities or provinces covered tion, as well as a specific time frame for in this study has managed to formally Equal access to property rights delivering legally binding documents register or map all private properties. Doing Business also assesses whether a proving property ownership. Senegal also Rwanda is the only country in Africa to person’s gender has a bearing on access introduced a comprehensive website for have successfully documented all land to property rights. In Mozambique, as its land administration system, which rights. In 2015 Rwanda finalized the in 175 other economies, married and includes a list of procedures, required demarcation of all 10.67 million land unmarried women have the same owner- documents, service standards and parcels, using a unique parcel identifier ship rights to property as their male official fees to complete any property through the land tenure regularization counterparts.16 transaction. Authorities in Lagos, Nigeria, process, and entered them into its LAIS publish online the lists of procedures and digital database. Of these, 85% (9.1 requirements to register property, as well million parcels) have full information on What can be improved? as the fee schedules for both cadastral owners. This is a complex feat requiring and land registration systems. Cameroon considerable financial resources, high Reinforce transparency in the published a detailed online manual on administrative and technical capacity, urban land management system how to register property. and long-term commitment. Thorough and consolidated infor- mation on the process of property The government of Mozambique could Land dispute resolution registration is difficult to find in also keep stakeholders better informed An economy with a sound urban land Mozambique. Municipalities have cadas- by publishing statistics on land transac- management system minimizes the tral fee schedules, but these are mostly tions. Property registries already collect number of land disputes by ensuring incomplete and not publicly accessible. and compile this data, which is shared that clients receive accurate informa- Across all urban land management annually with the Ministry of Justice but tion, provides a state guarantee for agencies, information is often diffuse is not available externally. The public registration and compensates parties for and convoluted, making it difficult to go could also benefit from this information, losses incurred because of errors by the through the process without the guidance which could serve as a data analysis tool property registry. It also ensures that an of a lawyer. To reinforce transparency and for policy makers to monitor the real effective, efficient court system exists make information accessible, munici- estate market. to handle land disputes. In Mozambique palities could publish fee schedules and all property sale transactions need to be distribute brochures. Until 2016 Maputo Provide clarity on fee schedules registered to make them opposable to City distributed a brochure with guid- for registration and notary third parties (1.5 points); the state guar- ance on the process, which specified the services at the property antees the property registration system documents that needed to be delivered, registries and online (0.5 point); and registrars and notaries the fees charged and the expected time The cost of registration in Mozambique are in charge of ensuring that transac- frame. When notary and registry fees is comprised of a multitude of fees, tion documents comply with the law were updated in 2016, the brochure including 0.4% of the property value in (0.5 point) and checking the transacting became obsolete and fell into disuse. the Doing Business case study.17 Other parties’ identification documents (0.5 fees — ranging from MZN 250 to MZN point). There is also a national database In addition to producing an updated 1,500 each ($4 to $24.4) — cover such to check the accuracy of identity docu- brochure, provinces should consider items as each entry or inscription in the ments (1 point). launching online portals where infor- registry; the registration certificate of mation from provincial and municipal a property transfer; the preregistration The state, however, does not have agencies is consolidated and guidance is study and the request for transfer of the a dedicated mechanism to provide available throughout the property trans- deed. To calculate the fees, registrars compensation for losses incurred because action. Around the world, 162 economies must read provisions scattered across of erroneous information provided by publish fee schedules for services offered different articles of the Property Registry deeds offices. When land disputes do at the land registry. If a fee schedule Schedule.18 This is confusing for regis- arise, parties can file claims at the civil is public, it is also likely to be available trars and attorneys alike. In fact, in April section of their provincial court, where online. In 137 economies this informa- 2018 the Ministry of the Interior sent a cases typically take one to two years to tion can be accessed through a dedicated circular to all property registries to stan- resolve (2 points). In Maputo City it takes website. For example, in 2016 Zimbabwe dardize and clarify the cost of issuing the 56 Doing Business IN MOZAMBIQUE 2019 approving the assessment of the property BOX 4.2. Digitization of property registries in Mozambique value. In Inhambane and Quelimane — the Maputo City has scanned most of its property registry titles through 2017; how- fastest cities — this role has been dele- ever, other provinces still operate a manual system, relying on books to keep own- gated to officials in the urban planning ership information. The government of Mozambique is seeking to change that by department. In Quelimane, for example, laying the foundation for new electronic databases. It recently approved a revision officials review the transaction value, of the Property Registration Code, introducing legislation that allows for electronic compare it to the assessed value and registration and a digital property database — the SIRP (Sistema Integrado de Registo issue the payment slip. Within three days Predial).a The new electronic platform will include all notary and registration data after this analysis is complete, the buyer on encumbrances, in addition to cadastral information. can make the payment. This stopgap The revised code also intends to increase registration rates by shifting the re- measure has helped streamline approvals sponsibility of registration from the owner to the notary upon the drafting of the in practice, but the process still faces deed. Using the system, the notary must share information on all notarized docu- potential delays. The authority to review ments that are subject to registration, including leases, mortgages and transfers. is not fully delegated, since the mayor The code, which is effective as of November 2018, foresees a gradual rollout of still reviews all transfers in batches at the the automated system, as its successful implementation will depend on having end of the month; if he or she disagrees all ownership records in digital format and adequate infrastructure to ensure that with the assessment, the municipality notaries and registries are connected to the SIRP. Where conditions do not exist for the automation of procedures, the implementation of the new code will be via will request payment of the difference. the use of standardized records (“fichas de registo”) instead of the current book- To streamline the process, the govern- based system. ment of Mozambique should consider revising this requirement so that an a. The Sistema Integrado de Registo Predial (SIRP) is included in the new Property Registration Code (Decree-No. 2/2018 of August 23). expert on property valuation is in charge of reviewing the tax assessment, instead of the mayor. As Mozambique continues to computerize processes, municipalities The payment of the SISA tax is a major bottleneck in the should consider using the SiGIT to create process of transferring property in Mozambique. a database of property values and auto- mate property assessments. ownership certificate. Although the law in the formal economy. Aside from is widely available, the document is 12 Mozambique, Brunei Darussalam and Increase digitization of pages long and so complex that it is virtu- Nigeria are the only other economies cadastral plans and ownership ally incomprehensible to the lay person. in the world where the permission of records Current fees are a function of not only the senior officials is required to transfer Over the past eight years, more than transaction value but also the number of land.19 However, Mozambique is the only 45 economies measured by Doing pages and lines in the document and the one where the mayor needs to grant an Business computerized their land records. level of assistance required by the parties. approval for the payment of the transfer Among them are Rwanda and Kenya To provide clarity, the Ministry could tax. Several locations in Nigeria have (Nairobi). Ten years ago, transferring standardize fee schedules for services started allowing governors to delegate property in Rwanda took more than a and include these in service charters, to other officials their power to approve year; today, thanks to the web-based brochures and an online portal for client property transfer. In Kano, for example, Land Administration Information System use. Cameroon, Portugal and Zimbabwe, the authority to grant the consent was implemented in Kigali, the process takes for example, have a clear property regis- passed from the governor to the commis- only a week. tration cost comprising a single item: the sioner of lands, who delegated it further land registration fee. to the permanent secretary for lands. The first step towards digitization is As a result, the time to transfer prop- having an appropriate legal framework Streamline the transfer tax erty in Kano is among the lowest in the that embraces electronic record-keeping. payment process country — 40% lower than in Lagos. In August 2018 Mozambique took a The payment of the SISA tax is a major major step in this direction with the bottleneck in the process of transferring Under Mozambique’s Municipal Tax approval of Decree No. 2/2018. The new property in Mozambique. The transfer Code, the transfer tax is applied to the law revises the Property Registration tax is an important source of revenue, transaction value or the assessed value Code to modernize and simplify the and the process of paying it should not of the property, whichever is higher.20 The process. It enables the registries to discourage businesses from participating code tasks the mayor with reviewing and gradually transition from the current RegistERING PROPERTY 57 manual book system to an integrated A first step toward greater integration and efficiency electronic system by creating the SIRP platform, which will merge all notary and would be to create a common database or link the existing registration data on properties. The new databases that gather cadastral plans, ownership data and system allows for digital registration and tax records. lays the groundwork for the creation of a database of electronic encumbrances, to first step toward greater integration and portal connecting the municipality and be managed by notaries and registrars. efficiency would be to create a common property registry would be instrumental But to benefit from the electronic system, database or link the existing databases in promoting better communication registries need to digitize all their owner- that gather cadastral plans, ownership and coordination. In May 2013 Panama ship records. Currently Maputo City has data and tax records. Such a unified or introduced such a system to improve most of its ownership records scanned linked database already exists in 103 communication between the cadastre and is working towards digitizing them Doing Business economies around the and the land registry. The land registry so that they are searchable and extract- world.21 was responsible for logging the transac- able. In Zambezia the registry has tion in the system once the application scanners, but it lacks sufficient resources Currently, property-related information was filed; the cadastre would then record to complete the process. (whether legal, tax-related or local) is the buyer as the new party responsible for managed by different entities, namely the property tax payments. Panama achieved When it comes to cadastral plans, municipal cadastre, the cadastre at the this before having fully digital ownership more progress has been made. Beira, tax authority and the property registry. and cadastral records. Quelimane and Tete have digitized most Those seeking to find information on a of their plots. Beira had the assistance property or change records must visit In the long term, once the transi- of the Dutch agency Kadaster, whereas several different agencies, which adds tion and establishment of the SIRP Quelimane received support under the procedural complexity to the process and and SiGIT is complete, municipalities Millennium Challenge Corporation’s increases uncertainty, as information on and registries should consider linking land tenure project. In Tete the process the property and ownership is segmented these databases to ensure automated started in 2014 under the auspices of and paper-based. updates and streamlined communication the Ministry of Agriculture with tech- between the agencies. Linked databases nical assistance from the Republic of In theory, property registries and munici- could also eliminate several steps in the Korea, which provided equipment and palities should exchange information property registration process by allowing guidance. Other cities could follow this directly. However, because of a lack of consolidation of information into a example and leverage their access to coordination and communication, the unique certificate and enabling automatic the system to complete the digitization property owner essentially acts as a update of the tax and urban cadastres of their cadastral plans. Having owner- messenger between agencies. While the upon transfer of ownership. ship and cadastral information in a fully records are still in paper format, registries digital format will not only improve the could commit to sharing information on efficiency and quality of services but will ownership transfers with the municipality NOTES also be a stepping stone to the creation via courier. In 2014 the property registry of a unified registry, as intended by the of Maputo City started sending copies 1. World Bank. 2007. Enterprise Surveys: Mozambique. Available new law. of updated ownership certificates to at http://www.enterprisesurveys. the municipality. As recognized by the org/data/exploreeconomies/2007/ Improve coordination among Doing Business 2015 report, the reform mozambique/#finance. 2. World Economic Forum. The Global stakeholders by establishing eliminated two steps from the process of Competitiveness Report 2017-2018. Available communication systems transferring property. However, this was at http://reports.weforum.org/global- between the property registry not sustained over time and the practice competitiveness-index-2017-2018/ 3. Piza, Caio, and Mauricio José Serpa and the municipality stopped after a year. Barros de Moura. 2016. “The Effect of a In Mozambique local-level agencies Land Titling Programme on Households’ work in silos, creating an even wider The new Property Registration Code Access to Credit.” Journal of Development Effectiveness 8(1): 129-155. divide between municipal and provincial intends to improve coordination between 4. This chapter will use city names when agencies. Each completes its part of municipalities and registries by requiring describing procedures done at the the property transfer process, without that any changes in the cadastral data- municipality and province names for those steps that are overseen by provincial agencies coordination and having a limited under- base be communicated electronically to such as the tax authority or property registry. standing of the process as a whole. A the registrars. To that effect, an online 58 Doing Business IN MOZAMBIQUE 2019 5. Land Law with amendments (Decree No. 66/98 of December 8) and Urban Law (Decree No. 60/2006 of December 26). 6. Ali, Daniel Ayalew, Klaus Deininger and Michael Wild. 2018. “Using Satellite Imagery to Revolutionize Creation of Tax Maps and Local Revenue Collection.” Policy Research Working Paper 8437. Washington, DC: World Bank. 7. Article 77 of the Property Registration Code (Decree No. 47/611 of March 28, 1967). The 2018 Property Registration Code revised this time limit to 20 days for registries without an electronic platform (SIRP). 8. Article 875 of Civil Code (Decree No. 47 344 of November 25, 1966). 9. Article 52 Notarial Code (Decree No. 4/2006). 10. Article 102 of Decree No. 63/2008 of December 30 (Código Tributário Autárquico). 11. Article 99 of Decree No. 63/2008 of December 30 (Código Tributário Autárquico). 12. World Bank. 2014. Doing Business 2015: Going Beyond Efficiency. “Registering property: Measuring the quality of land administration systems.” Washington, DC: World Bank. 13. World Bank. 1989. World Development Report 1989. Washington, DC: World Bank. 14. Article 261 of the Property Registration Code (Decree No. 47/611 of March 28, 1967). 15. Deininger, Klaus, Harris Selod and Anthony Burns. 2012. The Land Governance Assessment Framework: Identifying and Monitoring Good Practice in the Land Sector. Washington, DC: World Bank. 16. Articles 35, 36 and 82.1, Constitution of the Republic of Mozambique; Articles 102 and 103, Law of family. In practice, areas not measured by Doing Business, such as de facto discrimination and lower literacy rates, can also affect women’s access to land. 17. The cost of registration includes 0.4% of property value up to the first MZN 5 million + 0.03% of property value above MZN 5 million. The Doing Business case study assumes a property value of MZN 1,289,850 ($21,000). 18. Articles 1, 3.1, 3.2, 11.2, 11.3, 16 and 23.2 of the Property Registry Schedule (Ministerial Act No. 2/2016 of January 6). 19. In accordance with the Nigerian Land Use Act of 1978, all land within the territory of a state is vested with its governor, thus making his or her consent mandatory for each property transfer. 20. The cost of registration in Mozambique is: (i) 0.4% of the property value up to the first MZN 5 million + 0.03% of the property value above the MZN 5 million + (ii) MZN 250 for each entry in the Registry + (iii) MZN 1,500 for each inscription in the Registry + (iv) MZN 700 for a certificate of registration of transfer of ownership (2 or 3 copies) + 1,000 for the study and organization of the pre-registration process + (vi) MZN 500 for the application + (vii) MZN 250 for verifying title deeds. 21. Doing Business 2019 database Enforcing contracts MAIN FINDINGS ¡ Resolving a commercial dispute is easiest in Manica, thanks to speedy courts and low attorney fees. It is most difficult — and takes the longest time — in Maputo City. ¡ Most variations across provinces are found in the trial and judgment phase, which takes 130 days in Tete and almost five times that in Maputo City. ¡ The costs that vary the most are attorney fees. They range from 10% of the claim amount in Manica to 49% in Tete. ¡ Provinces in Mozambique lag on the quality of judicial processes index. Case management and court automation have the most room for improvement. ¡ On average, resolving a commercial dispute is slightly faster and cheaper in Mozambique than in the Southern African Development Community. 60 Doing Business IN MOZAMBIQUE 2019 O utstanding payments are a markets and a higher level of development the defendant is required to appear for burden for small and medium- overall.4 Sound legal institutions provide a pretrial hearing. The main goal of the size enterprises (SMEs). They firms and investors the confidence that pretrial hearing is to allow the judge and compromise the ability to repay short- legal disputes will be resolved within a the parties to discuss the facts and the term debt and limit the funds available to reasonable time, with judicial decisions law of the case, narrow down the scope respond to new business opportunities, that are transparent and enforceable. of the dispute and submit or request hindering growth. One way to obtain evidence beyond what has already been payment, especially in the case of a filed through the written pleadings. breach of contract, is to file a lawsuit in HOW DOES CONTRACT court. But this makes sense only if justice ENFORCEMENT WORK IN Once the pretrial hearing is concluded, is efficient. In Maputo City this alternative MOZAMBIQUE? the judge can either declare the case may not be attractive; the business would ready for trial or rule on the merits. If the have to stay afloat for over two and a half Under the Mozambican Constitution, judge sets the case for trial, this typically years before a court order is enforced. courts and their rules and procedures involves one or two trial hearings. Upon For large businesses that have higher are governed at the national level.5 The termination of the hearings — at what is liquidity, this may be less of an issue. But Supreme Court is the highest body of the the end of the evidentiary phase — the for an SME, this kind of delay in incoming judiciary, with jurisdiction over the entire judge issues a written judgment, and the revenue may lead to a default on its own country. It oversees court administra- parties have eight days to appeal. If the loans and eventual insolvency. Providing tion, promotes public access to the court time to appeal has expired without the local businesses with the ability to system and allocates resources to ensure debtor appealing, the creditor requests enforce contracts swiftly and effectively that courts can deliver their services.6 enforcement of the judgment in the is thus essential. same court that issued the ruling. The According to Doing Business research, to same judge oversees the enforcement, The last two decades have seen a sharp file a commercial claim like the one in and a court officer performs the duties of increase in the attention paid to the role the Doing Business case study the plain- enforcement agent. of the judiciary in promoting economic tiff must first go to the registry in the development.1 Just as accessible, trans- civil division of the relevant provincial How does the process compare? parent and predictable business-friendly court (Secção Cível do Tribunal Judicial da Both the overall time and the cost to regulations are critical to spur economic Província). From there, the president of resolve a commercial dispute vary growth,2 so too is a well-functioning judi- each court then oversees the distribution significantly across provinces. Enforcing ciary with efficient contract enforcement.3 of cases to the judges.7 Once the case a contract is easiest in Manica, which Economies in which courts can effec- is assigned, the judge orders service of benefits from the lowest total cost in the tively and efficiently enforce contractual process, which is undertaken by a court country (21.8% of claim value) and has obligations have more-developed credit officer. The summons is then served, and the second fastest total time (380 days). WHAT DOES ENFORCING CONTRACTS MEASURE? Enforcing contracts: measuring the efficiency and the quality of commercial Rankings are based on scores dispute resolution for three indicators Doing Business measures the time and cost for resolving a commercial dispute Days to resolve Attorney, court and through a local first-instance court. The case study assumes that a seller deliv- a commercial dispute enforcement costs, ers Costm-made goods to a buyer who refuses to pay, alleging that the goods through the courts as % of claim value are of inadequate quality. To enforce the sales agreement, the seller files a claim with a local court, which hears arguments on the merits of the case. Before a decision is reached in favor of the seller, an expert is appointed to 33.3% 33.3% Time Cost provide an opinion on the quality of the goods in dispute, which distinguishes the case from simple debt enforcement. Doing Business also builds a quality 33.3% Quality of judicial of judicial processes index that measures whether a location has adopted a processes series of good practices in its court system in four areas: court structure and index proceedings, case management, court automation and alternative dispute resolution (see figure). Use of good practices promoting quality and efficiency ENFORCING CONTRACTS 61 TABLE 5.1  Enforcing contracts in Mozambique –where is it easier? Quality of judicial Enforcing contracts score Time Cost processes index Provínce (City) Rank (1–10) (0-100) (days) (% of claim value) (0–18) CPLP 44.04 987.4 45.9 7.5 SADC 47.6 686.6 46.4 7.4 SSA 48.87 655.1 42.3 6.7 Mozambique 54.16 612.5 35.1 7.6 Manica (Chimoio) 1 64.40 380 21.8 7 Nampula (Nampula) 2 58.45 673 23.7 8.5 Niassa (Lichinga) 3 57.37 571 26.6 7 Inhambane (Inhambane) 4 57.05 483 33.9 7 Sofala (Beira) 5 56.52 708 26.3 8.5 Tete (Tete) 6 53.38 348 60.9 8.5 Zambezia (Quelimane) 7 52.74 791 23 7 Cabo Delgado (Pemba) 8 51.53 612 39.2 7 Gaza (Xai-Xai) 9 50.34 610 42.5 7 Maputo City (Maputo) 10 39.78 950 53.3 8.5 CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Rankings are based on the average ease of doing business score for the time and cost associated with enforcing a contract as well as for the quality of judicial processes index. The score is normalized to range from 0 to 100, with 100 representing the best regulatory performance (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019”. The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. It is most difficult in Maputo City, where How quickly courts resolve cases depends partly on their it takes over two and a half years (950 resources and caseloads, but the data from provinces in days) and costs more than half of the Mozambique suggest that management practices can be claim value (table 5.1). The duration of even more important. the trial and judgment phase and the cost of attorneys’ legal services are the main sources of variation across locations. points is similar to the SADC average of At courts in both provinces, two judges 7.4 points (figure 5.1). hear civil cases, and Nampula actually Resolving a commercial dispute at a has more court officers assisting the local first-instance court across the 10 How does the time vary? court — eleven compared with only four provinces measured takes an average of The total time to resolve a commercial in Niassa.8 Yet contract enforcement 612.5 days and costs 35.1% of the claim dispute and have the judgment enforced in Niassa (571 days) is more than three value. This is two and a half months faster ranges from almost a year in Tete to over months faster than in Nampula (673 than the average for the Southern African two and a half years in Maputo City, with days); Niassa’s court cleared 77% of its Development Community (SADC) the trial and judgment phase taking the docketed cases that year, as opposed to (686.6 days), but slower than Rwanda most time. How quickly courts resolve 63% in Nampula. The most significant (at 230 days the second fastest in the cases depends partly on their resources variations are found, first, in the time that Sub-Saharan Africa region), Zimbabwe and caseloads, but the data from prov- it takes the court officer to locate and (410 days) and Kenya (465 days). The inces in Mozambique suggest that successfully serve the defendant; second, cost is on par with South Africa (33.2% management practices can be even more in the time the judge takes to schedule of claim value) but substantially lower important. hearings, declare the case ready for trial than the average for SADC (46.4%) and issue the judgment; and finally, in the and Nigeria (38.9%). On the quality of Take Niassa and Nampula, for example. time the court officer spends to locate, judicial processes index, Mozambique’s In 2017 the civil division of the Provincial identify and seize the debtor’s movable performance of 7.6 out of 18 possible Court of Niassa received 936 cases, 32% assets (figure 5.2). more than its counterpart in Nampula. 62 Doing Business IN MOZAMBIQUE 2019 FIGURE 5.1  Enforcing a commercial contract in Mozambique is faster and cheaper on average than in the SADC economies and shows wide in-country variation Time Cost Quality of Judicial (days) (% of claim value) procesess index (0–18) SINGAPORE ICELAND CHINA (BEIJING), KAZAKHSTAN 16 GLOBAL 10 GLOBAL GLOBAL 200 BEST BEST BEST RWANDA RWANDA PORTUGAL MOZAMBIQUE 14 20 MOZAMBIQUE — Manica — Nampula, Zambezia PORTUGAL — Tete — Niassa, Sofala 400 — Manica 12 30 ZIMBABWE — Inhambane SOUTH NIGERIA AFRICA KENYA Average — Inhambane NIGERIA 40 — Cabo Delgado 10 — Niassa KENYA SSA — Gaza KENYA MOZAMBIQUE SOUTH 600 AFRICA Cabo Delgado, Gaza — Average CPLP SADC — Maputo City, Nampula, Sofala, Tete 50 NIGERIA 8 SSA SADC — Nampula — Maputo City CPLP, SADC — Cabo Average — Sofala SOUTH AFRICA Delgado, Gaza, SSA Inhambane, Manica, ZIMBABWE PORTUGAL 60 — Tete 6 Niassa, Zambezia 800 — Zambezia 70 4 CPLP — Maputo City RWANDA 80 2 1000 ZIMBABWE 90 0 CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. Filing and service The relatively quick service in the case of resources and court officers’ limited In Mozambique the filing and service Gaza (45 days) is attributed primarily training — contribute to delays during phase is the shortest step in the proceed- to the small population, which makes it filing and service throughout the country. ings, averaging 66 days. The duration easier to locate the seller, whereas in Tete depends mostly on how long it takes for it is due to faster processing and timelier The most time-consuming step within the court to issue the summons and for compliance by the court registry with the filing and service stage is locating and the court clerk to serve process in person the judge’s service order. The filing stage successfully serving the defendant. This and return notice of service to the court takes longer in Zambezia and Niassa, takes the court officer between 25 and 45 registry. The filing stage varies from 38 which have fewer specialized court divi- days. As of 2005 Mozambican law allows days in Tete to 90 days in Maputo City. sions. Several different factors — delay for service to be made on any employee This is much slower than in Namibia, tactics by the defendant (buyer), the of a company.10 In practice, however, the fastest among the economies of the requirement for the court president or an court officers prefer to serve the compa- SADC at only 10 days, followed by 14 days alternate to preside over distribution and ny’s legal representative, who is often not in Zimbabwe and 30 days in South Africa. assignment of cases,9 courts’ insufficient present; thus a second attempt at service ENFORCING CONTRACTS 63 FIGURE 5.2  The trial and judgment phase takes the longest and accounts for the greatest time variation across provinces Tete 38 130 180 348 Total time (days) Manica 58 167 155 380 Inhambane 68 190 225 483 Niassa 85 271 215 571 Gaza 45 359 206 610 Cabo Delgado 72 320 220 612 Mozambique 65.5 326.2 220.8 612.5 SSA 35.4 402.4 217.3 655.1 Nampula 65 337 271 673 SADC 37.2 498.4 151 686.6 Sofala 55 365 288 708 Zambezia 80 483 228 791 Maputo City 90 640 220 950 CPLP 76.9 644.4 266.1 987.4 Filing and Trial and judgment Enforcement service CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. is required.11 A recurring challenge is that issue is a shortage of fuel for their trans- After the parties submit their written certain neighborhoods or streets are not portation. In Zambezia the court officers pleadings, the judge schedules and holds numbered and cities’ spatial planning as preparing the summons explained that the pretrial hearing. In Maputo City well as companies’ registry records are they must wait for a shared computer scheduling this hearing takes on average outdated, which means the court officer to become available, due to the court’s 45 days, exceeding the statutory time must rely on “word of mouth” from limited resources. frame of 10 days,13 and hearings might be acquaintances to locate the defendant. scheduled up to seven months in advance. Clerical errors also compound delays. Trial and judgment The lengthy delays in scheduling hearings Lawyers say that mistakes in the drafting The trial and judgment phase averages are primarily attributed to the backlog of the notice — especially when it comes 326 days, placing the average province in of cases accumulated over the years, a to writing the correct case number or the the bottom third of the SADC economies. structural and widespread problem in correct address for the defendant — often This is almost three times longer than Mozambican lower courts. Delays are result in repeated delivery attempts. Rwanda (120 days) and almost twice as also due to attorneys’ lack of timeliness in long as Cabo Verde (180 days). Trial time responding to court requests and judges’ Another recurrent reason for delay is varies widely throughout the country, unavailability to preside over trials — due a lack of resources, such as means of ranging from about four months in Tete in part to absenteeism. transportation and computers. Clerks to almost two years in Maputo City. across provinces commonly rely on rides The specialized divisions created in the When scheduling a pretrial or trial or irregular transportation to carry out Provincial Court of Tete12 have allowed for hearing, the judge is required by law service of process, because courts are not a more equitable and specialized distri- to first consult with both parties on equipped with motor vehicles and public bution of cases, reducing the number of the date.14 In several provinces across transportation is poor. In Niassa, which incoming cases across specific divisions. the country, such as Inhambane and has the second longest time for filing This has led to more efficient decision- Tete, judges opt to schedule hearings and service (85 days) after Maputo City, making, fewer judge hours and generally without consultation a few days after court officers explained that a recurrent speedier proceedings. notifying the parties’ lawyers; the intent 64 Doing Business IN MOZAMBIQUE 2019 Because lawyers sometimes fail to show up for hearings, required to arrange transportation and judges overbook their schedule to mitigate the effect of storage with the creditor — who is typically absences and make sure they get a full day of hearings appointed trustee (55 days on average). done. Subnational variation shows, however, that enforcement can be substantially is to save resources and time, especially among several judges and waiting times faster; in provinces such as Manica and since lawyers often fail to respond to for availability can be significant. Tete it takes less than one month. the notices. Any expert testimony is requested in writing by the parties and Another recurring issue that causes court Advertising, organizing and holding the is delivered either at the pretrial or final delays across Mozambique is inefficient auction of the debtor’s movable assets hearing. It takes on average five weeks case flow management and adminis- also takes time — 41 days on average. The for experts to be appointed and submit tration. The lack of a well-functioning underlying causes for delays are judges’ their report.15 The wait for the judge to scheduling system leads to different limited availability to preside over the order the case ready for trial ranges from hearings being scheduled for the same auction and the shortage of courtroom 10 days in Manica to 80 days in Maputo judge at the same time. While this is often space for hosting it. Court officers also City,16 while the time between hearings unintentional, in other instances double- have limited means of transportation for ranges from 15 days in Tete to 75 days booking happens by design. Because this purpose. Auctions must typically be in Zambezia. An additional 95 days are lawyers sometimes fail to show up for done twice, due to lack of attendance; necessary on average for the judge to hearings, judges overbook their schedule few people read newspapers or show up render judgment; the law sets forth 15 to mitigate the effect of absences and to bid on the seized assets.21 After the days for this step.17 make sure they get a full day of hearings second auction it is most common for the done.19 The lack of financial and human creditor to request payment in the form The overall time for the trial stage varies resources and the problem of judge of the seized property (adjudicação).22 depending on factors such as court absenteeism are also issues. Judges congestion, delays in scheduling hear- do not have a court clerk during the What are the main drivers of ings and frequency of adjournments. proceedings to screen written pleadings cost? Adjournments in the benchmarked prov- and evidence or to assist in structuring The cost to enforce a contract ranges from inces are due in part to the unavailability and drafting judgments. Delays in noti- 21.8% of the claim value in Manica to of judges to preside over trials and the fying the judgment are also attributed to 60.9% in Tete (figure 5.3). Attorney fees lack of law clerks to support the judge the fact that court notifications within the are the largest portion of the costs, aver- with technical work such as analyzing city must be made in person. aging 22.4% of the claim value — higher evidence and drafting decisions. than 10 of the 16 SADC economies. Attorneys’ occasional lack of diligence Enforcement of judgment and failure to respond to court requests On average, it takes over seven months Attorney fees also contribute to delays. to enforce a judgment in Mozambique, The rules on attorney fees are established compared with just five months in the in the bylaws of the Mozambique Bar The civil division of the Provincial Court of SADC and less than three months in Association. The criteria for determining Zambezia has only one judge hearing civil South Africa. The enforcement stage the fees are qualitative in nature23 and and commercial claims, and from May ranges from five months in Manica to include time spent on the case and the 2017 to January 2018 this single judge’s more than nine months in Sofala. This complexity of the subject matter. This position was vacant. During this time all period includes all the time required by allows for a broad interpretation and but urgent cases went unheard, aggra- the court to complete several internal wide latitude in billing. Fees range from vating existing delays and increasing the procedures, such as distributing the 10% of the claim value in Manica to five case backlog. According to that court’s enforcement application, locating, iden- times that in Tete, with the average fee statistics,18 15 cases and 4 enforcement tifying, physically seizing and appraising on par with South Africa (22.6%) but proceedings were closed in 2017, down the debtor’s movable assets, as well as twice as much as in Tanzania (10%). Fees from 64 and 21, respectively, in 2015. calculating court costs and paying the are market-driven, and attorneys claim Lack of court infrastructure is also an creditor. that lower fees are tied to weak demand issue, as judges struggle to find a venue for legal services, low cost of living and for court hearings. In Tete, for instance, Two factors drive the length of the process slow economic activity. In Manica, one the judge carries out hearings in his own and the variation in enforcement: the time of the provinces with the lowest GDP in office because the courtrooms are shared it takes to locate, identify and seize20 the Mozambique, fees are low despite a rela- debtor’s movable assets, and the time tive scarcity of lawyers — approximately ENFORCING CONTRACTS 65 On average, it takes over seven months to enforce a practice the creditor will handle all the judgment in Mozambique, compared with just five months related logistics, with the support and in the SADC and less than three months in South Africa. oversight of court officers and often the police. This happens because none of the provincial courts measured have 1 per 8,200 inhabitants. Meanwhile, in of the claim value. Expert fees comprise adequate space to store seized movable coal-rich Tete costs are high even with most of the court costs and are nego- assets or the means to transport them. twice as many attorneys — 1 per 4,400 tiable, although the Code of Judicial Costs In Tete, for instance, seized vehicles are inhabitants.24 In addition, in provinces that provides different cost tiers depending on stored in an open patio behind the court concentrate a lower-income population, the type of expertise; these range from building, susceptible to deterioration and a larger portion qualify for representation 1% in Zambezia to 7.6% in Maputo City. consequent loss in value. Seized assets by the Public Legal Aid Office (Instituto are left sealed at the debtor’s premises or Patrocínio e Apoio Judiciário - IPAJ) — even Enforcement costs in most cases transported to the prem- for commercial claims. Enforcement costs vary from 5% of ises of the creditor for safekeeping, upon the claim value in Zambezia to 8.9% in the latter’s request to be appointed as Court costs Sofala, with an average of 7.6% across bona-fide trustee (fiel depositário). Rental Total court costs, including court fees and the country. In Mozambique — unlike, for of storage space is not practiced for expert costs, average 5.1% of the claim example, in Angola and Tanzania — this movable assets such as office furniture. value, ranging from 3.0% in Zambezia to cost is advanced by the plaintiff. The Even if the creditor were to name a third 9.4% in Maputo City; in the lowest-cost main drivers of variation across locations party as fiel depositário, the latter is paid of the SADC economies, Eswatini, this are the cost of appraisal and transporta- only a maximum 5% net income from figure is 1.1%. Court fees, most notably tion of assets. sales proceeds. the filing fee and the trial fee, are regu- lated by fee schedules attached to the Although the responsibility of seizing and In Sofala the creditor usually hires a Code of Judicial Costs and do not vary transporting assets during the enforce- private company to provide an appraisal across provinces. They represent 1.8% ment phase belongs to the courts, in and expert opinions, which accounts for FIGURE 5.3  Attorney fees explain the great variance between provinces Manica 10 5 6.8 21.8 Total cost (% of claim value) Zambezia 15 3 5 23 Nampula 11 4 8.7 23.7 Sofala 13.5 4 8.8 26.3 Niassa 15 4 7.6 26.6 Inhambane 20 6 7.9 33.9 Mozambique 22.4 5.1 7.6 35.1 Cabo Delgado 25 6 8.2 39.2 SSA 24.8 9.3 8.3 42.3 Gaza 30 6 6.5 42.5 CPLP 32.9 8.4 4.6 45.9 SADC 32.4 8.5 5.5 46.4 Maputo City 35 9.4 8.9 53.3 Tete 49 3 7.9 60.9 Attorney Court Enforcement CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. 66 Doing Business IN MOZAMBIQUE 2019 Although the responsibility of seizing and transporting court events, though the deadlines are assets during the enforcement phase belongs to the courts, respected in less than half of the cases (a in practice the creditor will handle all the related logistics, score of 0.5). Another important factor: with the support and oversight of court officers and often the courts have no limits on the number of adjournments per case. Proceedings the police. can be adjourned at parties’ request or by the court, pursuant to a narrow, the high enforcement costs in this prov- practices — especially those related to predefined set of rules  — such as when ince (8.8% of the claim value). In most better case management and court auto- the summoned persons or the lawyers other provinces, such as Nampula and mation (table 5.2). are not present — and these rules are Tete, the judge usually appoints the court respected in more than half of the cases registrar (escrivão) to do the appraisal, Court structure and proceedings (a score of 0.5). Each court produces which is free. In practice the auction The court structure and proceedings its quarterly and annual performance is carried out in the courthouse; thus index (scored from 0 to 5 points) looks reports28; however, these reports are not the plaintiff bears no rental costs. The at the existence of dedicated courts or publicly disclosed (a score of 0). Lastly, auction is prepared by the court registrar specialized court divisions for commer- no province has an operating electronic and conducted by the judge at no addi- cial cases and simplified procedures for case management system in place for tional cost to the parties. small claims. Each location measured judges or lawyers (a score of 0). has a small claims court, but citizens Going beyond efficiency — the generally cannot resolve simple disputes Court automation quality of judicial processes without legal representation27 (a score Mozambican courts across the country index of 1). There are various specialized divi- still lag in automation (0 out of 4 possible Efficiency and quality go hand in hand. sions in courts across Mozambique, points on this index), despite some recent Good judicial quality promotes greater but only four provinces — , Maputo City, efforts being undertaken in the Maputo efficiency. Data from economies around Nampula, Tete and Sofala — have a dedi- City Commercial Court Division. There the world show that efficient dispute cated commercial division (a score of is no electronic filing, service of process resolution is usually paired with sound 1.5). Where a commercial division is not (this must be done in person within the institutions, effective case management available, commercial litigation proceed- city by the court officer) or payment of and court automation tools.25 The quality ings take place in the civil divisions of court fees. Although some judgments of judicial processes index — scored on a the courts, with judges adjudicating from the higher courts are made publicly scale from 0 to 18 — measures whether both commercial and other civil matters. available, either through publication in economies have adopted a series of good Additionally, case assignment is based the official gazette or on the website of practices in their court system in four on objective criteria but not automated in the Supreme Court, these are very few areas: court structure and proceedings, the competent court (a score of 0.5 out of and cover only certain civil and criminal case management, court automation 1). Lastly, pretrial attachment is available cases. When government online data- and alternative dispute resolution. These to plaintiffs in all civil and commercial bases are available, they are generally practices can result in a more efficient and cases (a score of 1). outdated. transparent judiciary, greater access to justice, a smaller case backlog, faster and Case management Alternative dispute resolution less costly contract enforcement and, in The case management index refers to Domestic commercial disputes can be some cases, higher-quality judgments.26 principles that aim to improve case flow settled through arbitration or voluntary and reduce court backlogs. It includes mediation (2.5 out of 3 possible points Locations measured across Mozambique provisions that enhance transparency on this index). Commercial arbitra- score 7 or 8.5 out of 18 possible points and accountability from judges and tion is governed by a consolidated law on this index, on par with the SADC parties for complying with the legal stan- encompassing substantially all aspects of average of 7.4 points. While all locations dards. Mozambique has adopted some arbitration (a score of 0.5). Furthermore, are subject to the same national regula- recognized case management principles all relevant disputes can be subject to tions, Maputo City, Nampula, Sofala (scoring 2 out of 6 possible points on arbitration (a score of 0.5), and arbitra- and Tete receive additional points due this index). For example, it makes pretrial tion clauses are usually enforced by the to the creation of specialized commer- conferences available to narrow down courts (a score of 0.5). Both mediation cial divisions in the provincial courts. issues and make trials more efficient and conciliation are available (0.5 points) Overall, Mozambique has ample room (a score of 1). It has also established and are governed by comprehensive to converge with international good legal time limits for at least three key regulation (another 0.5 point). There ENFORCING CONTRACTS 67 TABLE 5.2  Mozambique has ample room to improve the quality of its judicial processes, especially case management and court automation Mozambique Brazil, Maputo City, Cabo Delgado, Gaza, Rwanda Rio de Janeiro Mauritius Nampula, Sofala, Inhambane, Manica, (SSA best) (CPLP best) (SADC best) Tete Niassa, Zambezia Specialized commercial court or division ˜ ˜ ˜ ˜ Court structure Small claims court or fast-track procedure ˜ ˜ š š and proceedings (0-5) Pretrial attachment ˜ ˜ ˜ ˜ ˜ Randomized case assignment š ˜ ˜ š š Legal time standards for key events ˜ š š Legal limits on adjournments ˜ š š Court structure Performance reports ˜ and proceedings (0-6) Pretrial conference ˜ ˜ ˜ Electronic CMS features for judges ˜ ˜ ˜ Electronic CMS features for attorneys ˜ ˜ ˜ Electronic filing ˜ ˜ ˜ Court automa- Electronic service ˜ tion (0-4) Electronic payment of court fees ˜ ˜ ˜ Electronic publication of judgments ˜ ˜ ˜ Consolidated law for commercial arbitration ˜ ˜ ˜ ˜ ˜ Limitations on arbitration matters ˜ ˜ ˜ ˜ ˜ Alternative dis- Enforcement of valid arbitration clauses ˜ ˜ ˜ ˜ ˜ pute resolution (0-3) Voluntary mediation ˜ ˜ ˜ ˜ ˜ Regulation of voluntary mediation ˜ ˜ ˜ ˜ ˜ Financial incentives for mediation ˜ Quality of Judicial processes index (0–18 pontos) 14.5 14 12.5 8.5 7 ˜ Total š Partial CMS = case management system CPLP = average for the Community of Portuguese Language Countries SADC = average for the Southern African Development Community SSA = average for Sub-Saharan Africa Source: Doing Business database. Note: Kazakhstan is the global best performer on the quality of judicial processes index, with 16 points, while Singapore is the overall best performer on enforcing contracts. The only difference between Mozambican provinces is in the specialized commercial court or division aspect: Cabo Delgado, Gaza, Inhambane, Manica, Niassa and Zambezia do not have a court or division of a court dedicated solely to hearing commercial cases. For additional information, see the “About Doing Business and Doing Business in Mozambique 2019” and the ‘’Data notes’’ chapters. The average for Mozambique is the average of the 10 provinces measured, while the CPLP, SADC and SSA averages are based on economy-level data for those economies. are no financial incentives for parties should be deployed beyond the capital to in each country. Mozambique could to attend mediation or conciliation (a decrease disparities across the country take several steps to make the process score of 0). The Center for Arbitration, (box 5.1) of resolving commercial disputes more Conciliation and Mediation (CACM) is efficient, effective and fair. available only in Maputo City, although ad hoc arbitration tribunals can be WHAT CAN BE IMPROVED? Publish laws and judgments created based on demand. Traditionally, If a Mozambican lawyer or judge needs these ad hoc tribunals have been set up It is hard to reform a judiciary, but it is to consult a law, he or she must either go to resolve labor disputes, and this is still possible — and not all reforms require in person to the Mozambican national the reality across provinces. The govern- significant resources. Take the example of printing press archives (Imprensa ment of Mozambique is implementing Rwanda, which has made big strides over Nacional de Moçambique), located in several reforms in Maputo City that recent years with commitment from its Maputo, or request a copy of the law aim to improve the quality of its judi- policy makers (box 5.2). Of course, any in writing — both for a fee.29 If a lawyer cial system. If proven successful, they reform must be tailored to the situation wants to access a judgment, it is usually 68 Doing Business IN MOZAMBIQUE 2019 not readily available in the courts’ Having well-trained and qualified court staff to address physical archives; hence a request inefficient time-consuming steps at different stages (such must be made to the court officer for as service of process and drafting of judgment) should be a internal processing. Additionally — and priority for Mozambican courts. in contrast with almost one fourth of all economies in the world and half of the have been developed for court offi- Training programs for both court staff and SADC economies — Mozambique has no cers.32 Several of these courses were judges could be developed and overseen systematic way of making judgments in designed at provincial courts but were at the national level by the Supreme Court commercial cases at all levels available to often suspended or cancelled due to and implemented either by the superior the public. Making laws publicly available limited availability of funding. Having courts of appeal (Tribunais Superiores de raises citizens’ awareness and provides well-trained and qualified court staff to Recurso)34 at the regional level or by each greater understanding of their rights and address inefficient time-consuming steps provincial court administration (Tribunal obligations and how these are protected. at different stages (such as service of Judicial da Província), depending on court This promotes greater compliance while process and drafting of judgment) should needs and budget allocation. The Beira substantiating two of the four generally be a priority for Mozambican courts. An Superior Court of Appeals implemented accepted principles that define the rule institutionalized country-wide program a good practice in 2018; it promoted a of law, namely open government and to continuously train support staff would course to retrain the judges in its jurisdic- just laws.30 All Mozambican laws could help bridge the current deficits found in tion in civil and criminal appeals. This was be published at the national level — at no internal case processing throughout the highly valued by the judges and could be cost — on the government portal website trial and enforcement phases. easily replicated in other regions. (Portal do Governo), and the national printing press could make the laws avail- The aim would be to ensure that judiciary Consider limiting adjournments able free of charge on its website. support staff keep up to date with court and enforcing time limits rules and with improved case manage- Practice shows that judges in Access to court decisions is central to ment techniques, including computer Mozambique tend to be lenient in a well-functioning judiciary and key to knowledge and skills. Such a program granting adjournments. As a result, the a strong investment climate. Publishing could also help to progressively reduce defendant has incentives to request and providing easy access to court outdated practices or customs, such as adjournments to delay the issuance of decisions enhances transparency and court officers’ routine approach of serving a final judgment, whereas attorneys on improves the public’s trust and confi- the company’s legal representative when both sides may have incentives to delay dence in the courts. It can also serve to the law clearly allows them to serve any the trial to increase their billings. This indirectly promote professional develop- of the company’s employees. Overall, has negative consequences for both ment and build capacity among judges, court staff’s better knowledge ensures the parties and the courts, given that something that may in turn contribute speedier and more efficient handling of the financial costs of litigation tend to to improving court efficiency and the cases. For judges, strengthening exper- increase because of the need to prepare quality of decisions.31 Making judgments tise in commercial matters can result in and appear for additional proceedings. available does not necessarily require faster and less costly contract enforce- It also increases the court’s effort and substantial resources, but it does require ment, particularly where the commercial costs; clerks must prepare files for each internal organization. Mozambique could caseload is large. Judicial training can potential hearing, and judges may repeat- consider deploying a centralized govern- prevent ruling errors. A study from the edly need to prepare for hearings that will ment gazette database — made available European Bank for Reconstruction and not be held.35 In Rwanda, for example, online to the public — to save on time Development (EBRD) found that system- the rules on adjournments are meant to and cost. Courts should be required to atic initial and ongoing training of judges avoid dilatory tactics. If the judge grants a periodically send the decisions to this in commercial law, as well as in certain party extra time and it later turns out the database, and case decisions should be judicial skills such as the preparation of request was not genuine and was meant accessible and catalogued efficiently so decisions, can increase court predict- only to delay the process, the judge can that they can be easily searched. ability and lead to more efficient and impose damages, which must be paid effective courts.33 In the long term, before the next hearing. According to Enhance training for judges and enhanced predictability of court deci- Doing Business 2019, three economies in judiciary support staff sions leads to more security for investors Sub-Saharan Africa (Cabo Verde, Liberia Mozambique has no ongoing training and a better business environment. and Rwanda) consistently enforce the programs in place for judges and court limit of maximum number of adjourn- staff, though capacity-building courses ments. As for justified adjournments, ENFORCING CONTRACTS 69 BOX 5.1 The judiciary in Mozambique has taken steps to improve judicial quality and efficiency Reforms underway aim to improve the quality of judicial processes. One reform, approved in June 2017, is institutionalizing civil and commercial mediation in courts across the country. It is currently being rolled out as a pilot project in the Maputo City Court,a with 15 mediators having already started. Such court-annexed mediation has been widely used in most advanced economies for over 40 years as an alternative method of dispute resolution.b Mediation reduces legal costs, prevents future or full-fledged litiga- tion and allows for flexibility in finding a solution based on mutual parties’ interests rather than solely on legal rights. Developing countries increasingly recognize mediation as an efficient, private, flexible and non-adversarial alternative to the for- mal judicial processc to resolve a wide range of issues.d Additionally, the Ministry of Industry and Commerce is leading an initiative to install an electronic case management system for judges and lawyers in courts across the country, while the deployment of an integrated judicial process management system (called SIGAJUS) is already operational in the second commercial division of the Maputo City Court. This system enables court officers and judges to search all commercial cases in the database and deal more efficiently with caseloads. In parallel, a draft implementing decree that has yet to be enacted would allow for electronic service of process and court notifications. On efficiency, the Ministry of Justice is spearheading a proposal to reform the Code of Judicial Costs at country level to streamline the calculation of court costs, enabling greater access to justice, transparency and accountability. The proposal brings forward innovations such as: (i) eliminating progressive court fees (indexed to a percentage of the claim value) and replacing them with a standard fee schedule; (ii) broadening the eligibility base for exemptions; and (iii) calculating court taxes, fines and other charges based on the national minimum wage in force for the public sector.e a. Mozambican law regulates mediation and conciliation under Title III, Law 11/99 of July 8, and Resolution 1/CJ/2017 of August 25. Mediation or conciliation is already carried out across all provinces in Mozambique, although it is limited to labor disputes, driven by demand. Growing demand for civil and commercial alternative dispute resolution justifies the implementation of the pilot project. b. World Bank. “Three New Guides on Commercial Mediation: Good for Debt Resolution, Good for Governance.” Feature Story, November 21, 2017. Mediation Series: Mediation Essentials. Washington, DC: World Bank Group, available at: https://www.worldbank.org/en/news/feature/2017/11/21/three-new- guides-on-commercial-mediation. c. According to the Doing Business database, 176 economies recognize voluntary mediation or conciliation as a valid method of resolving contractual disputes, in addition to formal courts. d. World Bank. “Three New Guides on Commercial Mediation: Good for Debt Resolution, Good for Governance.” Feature Story, November 21, 2017. e. Pursuant to Chapter VII of Law 3/2017 of January 9, on Electronic Transactions. these should also include the establish- reporting obligations. In practice, across should include, for instance, training on ment of a reasonably immediate date to the benchmarked provinces it takes more completing and filing court forms, as well reinstate the process.36 Judges and court than three months for judges to render as on calculating statutory time limits staff play an active role from the begin- judgment, while the law sets forth 15 within the scope of civil and commercial ning of the trial, but their full involvement days. If deadlines for case processing proceedings. Drawing on its breadth of and continuous supervision is a prerequi- are not established or enforced, courts experience, the judiciary could prepare site for a firm attitude toward requests for will continue to be clogged; conversely, and present best-practice studies adjournments. if effectively implemented, they save the highlighting the benefits of limiting court and its users time and resources adjournments, while showcasing and Introducing a schedule of proce- and increase accountability. explaining examples of what not to do in dures — sanctions that could be enforced terms of dilatory tactics. in the event of noncompliance with an Bringing the judiciary and attorneys agreed-to procedural timetable for key together could help. The Mozambique Streamline the case court events — could prove instrumental Bar Association, in conjunction with management system in reducing delays. The schedule could the judiciary — namely the Ministry of Provinces in Mozambique lag on good be developed by the Superior Council Justice, Constitutional and Religious practices related to case management of the Judiciary (Conselho Superior da Affairs (Ministério da Justiça, Assuntos and court automation. Effective case Magistratura Judicial or CSM), which has Constitucionais e Religiosos) and the management makes legal services more sanctioning power. Mozambican law Supreme Court — could consider devel- affordable, as it allows lawyers to spend already sets time limits for some proceed- oping and introducing a joint training less time in court and judges to exer- ings but in most cases these are not module as part of the attorney training cise better control over noncompliance enforced — despite the statutory require- and certification process, covering the with judicial orders and deadlines. Case ments relating to performance standards practical procedural aspects of inter- management is used in about two-thirds for judges and the applicable periodic action with the court. The module of OECD high-income economies, but 70 Doing Business IN MOZAMBIQUE 2019 BOX 5.2 Overhauling the justice system: the example of Rwanda In March 2008 Rwanda enacted a law creating four new commercial courts to deal with a wide range of commercial cases — in- cluding commercial contracts, bankruptcy, tax disputes and others. A separate law with procedural rules for the new commercial courts introduced strict deadlines for both the parties and the judge, as well as rules on adjournments. Since then Rwanda has consistently implemented reforms recognized by Doing Business.a Most notably, it made enforcing con- tracts easier by implementing an electronic filing system for initial complaints. The ability to file cases online is not only a time- saver for the court, its staff and users; it also improves the quality of judicial systems. It means that lawyers and litigants do not have to come to court to submit all the needed documentation. It also means that courts have all the necessary documents, authentications and confirmed signatures in a legally acceptable format to make the case file record readily available for further processing.b In addition, Rwanda introduced an electronic case management system for judges and lawyers, making judgments rendered at all levels in commercial cases available to the public through publication on the judiciary’s website. Simply copying models without translating them to the local reality does not work. Any reform of this size requires political will, resources, pragmatism and a great amount of time. Johnston Businghe, former president of Rwanda’s High Court and former Minister of Justice and Attorney General, once pointed out that “if we had waited for the courts to get to the perfect starting point, cases would never be heard. Perfection is only obtainable from a work in progress.” a. For more details on the experience in Rwanda, see Doing Business case study in Celebrating Reforms 2008. “Rwanda: Pragmatism leads the way in setting up specialized commercial courts.” Available at http:/ /www.doingbusiness.org/en/reports/case-studies/2008/building-specialized-commercial-courts-in- rwanda. b. Gramckow, Heike, Omniah Ebeid, Erica Bosio and Jorge Luis Silva Menez. 2016. Good Practices for Courts: Helpful Elements for Good Court Performance and the World Bank’s Quality of Judicial Process Indicators. Washington, DC: World Bank. in recent years it is increasingly being impact on time, a pilot integrated judicial strategic plan, has recruited new court adopted in lower-income economies as process management system (SIGAJUS) officers well-trained in the use of infor- well. Case tracking, which is one tool is already operational in the second mation technology. The country now has that could be used, would allow the commercial division of the Maputo City an e-filing system, an electronic records court to screen and categorize cases Court, enabling court officers and judges management system and a legal informa- to manage them strategically. Kenya, to search all commercial cases in the tion portal.39 which introduced such a system in 2010, database and deal more efficiently with categorizes cases as small claims, fast their caseloads. As a medium-term goal, Use process mapping to identify track or multitrack, and strategically this initiative could be replicated across bottlenecks in the court system allocates resources to avoid delays in the country and complemented by imple- In Mozambique the trial and judgment resolving commercial disputes. South mentation of e-filing and e-payment time is the most cumbersome phase and Africa established a Judicial Case Flow capabilities.37 This could be implemented the one with the most variation across Management Committee to identify the as a joint initiative by the Supreme provinces. Some relatively economical key obstacles legal practitioners face in Court and the Ministry of Industry and actions can make a difference. One of the judicial system and determine how Commerce. them involves doing process mapping to best to address them. analyze the dynamics of how cases are Rwanda and Tanzania, two countries internally undertaken and to diagnose The use of information and communica- with income per capita below $1,000, bottlenecks and inefficient procedures, tion technology (ICT) in Mozambique have started computerizing their courts. from filing to enforcement. This exercise is very limited in the courts due to the Tanzania, which scores 0.5 points on both would help identify unnecessary adminis- scarcity of computers and overall ICT case management and court automation, trative tasks performed by judges — such infrastructure — currently, court staff has received funds from several donors as organizing and presiding over the take turns using computers — and to to provide the judiciary with modern public sale of debtors’ assets or presiding unreliable and uneven internet coverage information technology — including over case distribution — which could be across provinces. Approaches to elec- computers and digital court recording handled exclusively by administrative tronic or web-based tools vary by equipment — as well as training for staff. In Namibia sheriffs are tasked with economy, depending on the priorities judges and staff. In fact, computeriza- facilitating the auction to recover the of the judiciary and budget allocation. tion has proved to have many benefits amount stipulated in the writ of execution. Nonetheless, a gradual approach could for the judiciary, such as improving the In Brazil cases are randomly assigned to be considered for Mozambique. While it quality of research by judges.38 The the judge through an electronic system, is too early to have had any pronounced Rwandan Supreme Court, under its ENFORCING CONTRACTS 71 thus freeing up the court’s staff from this 21. The law does not include a “minimum notice” time frame for publication in newspapers bureaucratic step. NOTES (Article 890/1, Code of Civil Procedure), although a 10-day minimum statutory time Reducing the number of nonjudicial func- 1. Stephenson, Matthew. 2007. “Judicial Reform frame is required for the posting of public in Developing Economies: Constraints and notices ahead of the sale (Editais) and a longer tions that judges are required to perform Opportunities.” In Beyond Transition: Annual time frame is usually afforded to attract as would help judges redirect their efforts World Bank Conference on Development many interested buyers as possible. toward improving the quality of judg- Economics — Regional. Washington, DC: World 22. If the assets sold are not enough to cover Bank. court, enforcement and debt costs, the ments by concentrating on adjudication. 2. Moscoso Boedo and Mukoyama 2012. creditor must list more assets and request that Process mapping should be followed by 3. Esposito, Lanau and Pompe 2014; Dakolias another sale be organized by the court. the relevant reforms to the Code of Civil 1999; Ball and Kesan 2010; Klerman 2006; 23. The criteria are as follows: time spent, Dam 2006; Rosales-López 2008. complexity of the subject matter, importance Procedure, given that the existing unnec- 4. Dam 2006. of the service rendered, place of the provision essary procedures stem from statutory 5. Article 23, Constitution of Mozambique, of services (on site or within the professional requirements. Each court should under- 2004. domicile of the lawyer), Costmary practice 6. Law 24/2007 of August 20. Article 39. for similar cases, the possessions of the take this exercise individually to reflect 7. The claim goes to the civil division because interested parties and the final result obtained. the reality of the different management the minimum threshold for the commercial 24. Source: National Institute of Statistics, 2017 systems in place throughout the country. divisions of provincial courts excludes census. Mozambique Bar Association. http:// commercial claims such as the one assumed www.oam.org.mz/advogados-inscritos/. in the Doing Business case study. 25. World Bank. 2016. Doing Business 2016: Increase judges’ accountability 8. This information was provided by the Measuring Regulatory Quality and Efficiency. through periodic judicial Statistics and Judicial Information Units of the Washington, DC: World Bank. Provincial Court of Nampula and the Provincial 26. World Bank. 2016. Doing Business 2016: inspections and performance Court of Niassa and is current as of August Measuring Regulatory Quality and Efficiency. statistics 2018. “Enforcing contracts: Measuring good To ensure an efficient judiciary, it is crit- 9. Article 214, No. 1, Code of Civil Procedure. practices in the judiciary.” Washington, DC: 10. Article 234, No. 4, Code of Civil Procedure. World Bank. ical to have judges that deliver. For this to 11. Article 234, No. 3, Code of Civil Procedure. 27. Article 32, No. 1, Code of Civil Procedure. happen, judges not only require adequate 12. Specialized divisions were created to address 28. The contents of these reports include, among resources, but they also need to be held subject matter claims such as labor, family, other things, relevant case statistics and parental and minors’ rights. results, identification and breakdown of accountable for timeliness and quality 13. Article 508, Code of Civil Procedure. the court’s financial and human resources, of service. Promoting and enhancing 14. Article 156-A, Code of Civil Procedure. individual performance of judges (including periodic judicial inspections would aid 15. The parties have five days to comment on the relevant assessment criteria or benchmarks) expert report once notified by the court. and reporting on the conditions of the court’s in identifying budgetary priorities and 16. The parties have five days to contest the movable and immovable assets, allocation courts’ and judges’ financial needs. factual basis made by the judge in the order of financials from revenues obtained in the These inspections would thereby help declaring the case ready for trial; this can period and recommendations to address be done by submitting new evidence, for pending cases. ensure adequate budgetary allocations to example, or amending previously submitted 29. There are also private service providers address both the timely transfer of judges evidence. (such as Pandora Box) that publish the laws and the prerequisites for their long-term 17. Article 658, Code of Civil Procedure. electronically for a subscriber fee. 18. These figures were provided by the Statistics 30. The World Justice Project defines the rule of placement.40 Judicial inspections already and Judicial Information Unit of the Provincial law as comprising four universal principles: exist under Mozambican law but are not Court of Zambezia and are current as of accountability, just laws, open government, carried out by the Superior Council of the August 2018. and accessible and impartial dispute 19. According to both judges and lawyers, resolution. See https://worldjusticeproject. Judiciary.41 the court often opts to schedule hearings org/about-us/overview/what-rule-law. without consulting the parties because the 31. Gramckow, Heike, Omniah Ebeid, Erica Bosio Periodic judicial inspections would parties or their lawyers are traditionally and Jorge Luis Silva Menez. 2016. Good not very responsive to this request — either Practices for Courts: Helpful Elements for Good also stimulate greater compliance with due to their own unavailability or a failure Court Performance and the World Bank’s Quality judges’ performance standards and to reach agreement between themselves of Judicial Process Indicators. Washington, DC: evaluation objectives. To go further, for a specific date within a reasonable time World Bank. frame acceptable to the court. Scheduling 32. Most of these courses were financed by disseminating performance reports and conflicts are common across provinces and international cooperation partners that results to the public is also a good prac- are attributed to the lack of physical space in operate in the justice sector in Mozambique, tice. This could be done by publishing the the court (for example, in Nampula only two namely the Danish International Development courtrooms are available for nine divisions) Agency (Danida), UNICEF and the European reports on the Superior Council of the and the disorganization of courts’ physical Union. Source: Court Strategic Plan 2016- Judiciary’s website. It is not just a matter archives, which hinders consultation and 2020, Republic of Mozambique. 2016. of making courts more transparent; it sharing of cases. 33. Colman, Alan. 2011. “Court decisions in 20. Pretrial attachment is not a widespread commercial matters: an EBRD assessment.” is about having a tool to display courts’ practice for assets with a low value or in small Law in transition 2011. European Bank for commitment to good performance and to quantity, as in the Doing Business case study, Reconstruction and Development, available greater accountability to the public. so judicial seizure of assets takes place at the at: https://www.ebrd.com/documents/ enforcement stage. legal-reform/court-decisions-in-commercial- matters-an-ebrd-assessment.pdf. 72 Doing Business IN MOZAMBIQUE 2019 34. Mozambique has three superior courts of appeals, each of which has jurisdiction over several provinces: Tribunal Superior de Recurso de Maputo (Maputo, Maputo City, Inhambane and Gaza); Tribunal Superior de Recurso de Beira (Manica, Sofala and Tete); and Tribunal Superior de Recurso de Nampula (Nampula, Niassa, Zambezia and Cabo Delgado). 35. Gramckow, Heike, Omniah Ebeid, Erica Bosio and Jorge Luis Silva Menez. 2016. Good Practices for Courts: Helpful Elements for Good Court Performance and the World Bank’s Quality of Judicial Process Indicators. 36. Laws, Edward. 2016. “Addressing case delays caused by multiple adjournments.” Governance and Social Development Resource Centre. Helpdesk Research Report. 37. Computerizing the courts is not something that happens overnight. In Korea, where courts are now fully computerized, the process started in the late 1970s with the creation of a database of cases flowing through the courts. In the early 1980s word processing software was introduced to support judges in writing judgments. In 1986 a case management system was launched. Soon after, a master plan for creating e-courts was conceived — and this was followed by steps to make the case management system accessible to external users, add electronic signatures and digital certificates to the system and make real-time national data on court activities available. Finally, in 2010 Korea launched an electronic case filing system. The system enables some judges to adjudicate up to 3,000 cases a year, manage up to 400 a month and hear up to 100 pleas a month. Sources: Doing Business research; interview with Korean Judge Hoshin Won, Daegu District Court, Seoul. 38. Ramadhani 2010. 39. Courts with limited resources will rarely be able to advance their own ICT solutions unless they can build on government-wide ICT infrastructure. 40. Article 24 of Law 7/2009 of March 11, as amended by Law 3/2011 of January 11, approving the Judicial Magistrates Charter, sets forth that transfer and placement of judges shall be effected with preference for official service needs and minimum disruption to the personal and family life of the person concerned. Article 43 of the Charter lists judges’ rights and benefits. 41. Court Strategic Plan 2016-2020, Republic of Mozambique. 2016. See also Resolution 6/ CSMJ/P/95 of November 20, 1995. TRADING ACROSS BORDERS 73 Trading across borders MAIN FINDINGS ¡ High border compliance costs are the main obstacles for traders in Mozambique, particularly when it comes to importing. Fees related to the electronic single window system for international trade and the scanning inspections impose a heavy burden for traders. ¡ While port and border handling times tend to compare favorably at the regional level, exporters face long waits to complete customs and non-customs procedures. ¡ Trading through the Ressano Garcia land border crossing is the easiest and compares favorably with trading across neighboring countries’ land borders, reflecting the success of the one-stop border post pilot project. Deepening regional cooperation may bring further improvements to Mozambique’s land border crossings. ¡ Six years after the implementation of the electronic single window, the time and cost to comply with all documentary requirements for exporters and importers in Mozambique is lower than the average for Sub- Saharan Africa, but there is still room for improvement. ¡ Developing the electronic single window as the main pillar of the trading process would further the transition to a fully paperless environment and move Mozambique toward integrating all the key stakeholders, removing the mandatory use of customs brokers, applying efficient risk-based management, limiting personal interactions and reducing trading costs. 74 Doing Business IN MOZAMBIQUE 2019 O Trade has always been a To achieve its full trade potential, Mozambique must fundamental part of life in further enhance trade facilitation and create the conditions Mozambique, given its strategic for the private sector to supply goods competitively and location along Africa’s southeastern access new regional and global markets. coastline. More than a thousand years ago, the historical Mozambican trading ports of Chibuene and Angoche allowed has become increasingly important to the facilitation and create the conditions Swahili and Muslim traders to develop Mozambican economy, representing over for the private sector to supply goods trade routes that ran more than 1,500 100% of GDP since 2012.3 competitively and access new regional kilometers inland, connecting the hinter- and global markets. The country’s ratifi- land to the Indian Ocean trade network.1 However, inefficient customs procedures, cation of the World Trade Organization’s Today Mozambique’s trade corridors high administrative fees associated with Trade Facilitation Agreement (WTO- connect its major ports to the inland customs clearance and the high cost of TFA) in January 2017, along with recent provinces and neighboring countries,2 doing business for transport and logistics business regulation reforms, are steps in integrating Southern Africa in regional service providers are still a burden for the right direction. and global trade networks (box 6.1). small and medium-size companies that want to compete globally.4 Research has How does the process compare? Despite its strategic location, shown that transport delays between Considering trade by sea, Mozambique’s Mozambique has yet to realize its full origin and destination, including those measured ports tend to outperform trade potential. The civil war, which caused by customs, generate negative neighboring ports in Tanzania and South ended in 1992, marked a period of insta- impacts on trade performance.5 Studies Africa. The exceptions are Port Elizabeth bility that disrupted Mozambique’s role focusing specifically on Sub-Saharan and Ngqura in South Africa, which are in international trade. Since then, the Africa observed similar impacts on the cheaper and faster in complying with country has moved to position itself as region’s exports6 and economic growth.7 border requirements — especially in a key international trade hub, adopting Facilitating trade not only benefits major exports (80 and 84 hours, respectively, trade facilitation measures — including players; it also fosters the ability of small for a cost of $451) — and also cheaper decreases in tariffs, rehabilitation of and medium-size companies to partici- in complying with documentary require- transport and border infrastructure, and pate in international trade, generating ments. With an average trading across implementation of several capital-inten- economies of scale and enabling their borders score of 64.05, the measured sive megaprojects linked to its rich natural integration into regional and global value ports in Mozambique surpass the ports resources, such as the Mozal aluminum chains.8 To achieve its full trade potential, of Durban (South Africa), at 59.64 smelter. The trade of goods and services Mozambique must further enhance trade points, and Dar es Salaam (Tanzania), at TABLE 6.1  Case study assumptions Doing Business Beira Maputo Nacala Ressano Garcia (Maputo, seaport for exports/Ressano (seaport) (seaport) (seaport) (land border crossing) Garcia, land border crossing for imports) Export Product HS 38 – Miscellaneous HS 17 – Sugars and HS 07 – Edible HS 17 – Sugars and HS 76 – Aluminum and articles chemical products sugar confectionery vegetables and certain sugar confectionery thereof (aluminum) (coal) (sugar) roots and tubers (sugar molasses) (pigeon peas) Trade partner India Portugal India South Africa Netherlands Import Product HS 8708 - Parts and accessories of motor vehicles (auto parts) Trade partner China South Africa Domestic transport Business city Beira Maputo Nacala Maputo Source: Doing Business database. Note: To identify the export product and trading partner for Mozambique, Doing Business collects data on trade flows for the most recent four-year period from the United Nations Commodity Trade Statistics Database (UN Comtrade). To identify the export products and trading partners for Mozambique locations in the subnational Doing Business in Mozambique 2019, data from the National Institute of Statistics (Instituto Nacional de Estatística, INE) were used. See box below—What does trading across borders measure?— for more details. TRADING ACROSS BORDERS 75 WHAT DOES TRADING ACROSS BORDERS MEASURE? Doing Business measures the time and cost (excluding tariffs) associated with the logistical process of exporting and importing goods. It assesses three sets of procedures — documentary compliance, border compliance and domestic transport — within the overall process of exporting or importing a shipment of goods (see figure). The methodology accounts for good practices in trade facilitation such as the use of customs unions and trade agreements. O Doing Business in Mozambique 2019 adopts the Doing Business approach to measuring trade processes and applies it to Mozambique’s three major seaports — Beira, Maputo and Nacala — and the most important land border crossing in terms of volu- me and value of traded goods, Ressano Garcia (table 6.1). It measures the ease of trading across borders based on an import and export case study for each of these locations. The Doing Business methodology assumes Trading across borders: time and cost to export and import that each economy exports the product of its Rankings are based on scores for eight indicators comparative advantage to its natural export Time for documentary compliance Cost for documentary compliance partner — the economy to which it sells the and border compliance when and border compliance when largest value of such goods. Doing Business 25% 25% exporting the product of exporting the product of Time Cost assesses Mozambique’s most exported pro- comparative advantage to export to export comparative advantage duct (HS 76 – aluminum and articles thereof, 25% 25% under the Harmonized System classification Time for documentary compliance Time Cost Cost for documentary compliance code), traded with the Netherlands via a and border compliance when to import to import and border compliance when dedicated terminal at Maputo port. To com- importing auto parts importing auto parts plement this analysis and show a more com- prehensive picture of that port’s performance, this subnational report uses data based on Maputo port’s second most exported product (HS 17 – sugars and sugar confectionery), traded with Portugal. The other benchmarked locations are measured based on their leading export product (table 6.1). For imports, the case study assumes that traders are bringing in a standardized shipment of 15 metric tons of containerized auto parts (HS 8708) from each location’s natural import partner. In the case of the three measured seaports, that is China; in the case of Ressano Garcia, the natural import partner is South Africa. (On an economy-wide level, Doing Business assumes that Mozambique is importing auto parts from South Africa through Ressano Garcia, so the case studies on imports through this border crossing are similar for the Doing Business report and this subnational report.) The process of exporting and importing goods —  the case of Maputo port in Doing Business in Mozambique 2019 EXPORTING Maputo HS 17 – Sugars and sugar confectionery Port Domestic transport Maputo Border compliance Documentary compliance Portugal China HS 8708 - Auto parts IMPORTING Documentary compliance Border compliance Domestic transport Maputo Maputo Port Source: Doing Business database. 76 Doing Business IN MOZAMBIQUE 2019 BOX 6.1 Mozambique’s trade corridors are key assets for the region Trade corridors support regional integration and access to global markets.a These corridors lie along transport and logistics net- works — extensive road and rail systems that connect landlocked production areas to seaports.b They are shaped by coordinated investments in soft and hard infrastructure, usually anchored in megaprojects such as extractive industries.c Due to its geographi- cal location and abundant natural resources, such as coal, Mozambique has been at the forefront of integrated trade corridors in Southern Africa. These transport networks connect production areas inland — especially Mozambique’s landlocked neighbors and South Africa — to its three main seaports: Beira, Maputo and Nacala. The Maputo Development Corridor (MDC) connects Maputo port to the Gauteng region in South Africa by railway and highway systems. Officially created in 1996, it has turned the Maputo port into the busiest multipurpose port in Mozambique, with a spe- cial emphasis on bulk cargo due to the connection to South Africa’s mining regions and to the Mozal aluminum smelter, a joint venture between Mozambique and South Africa.d Likewise, the border post at Ressano Garcia has benefitted from new facilities and increased coordination between Mozambique and South Africa — including the one-stop border post project — and has be- come one of the busiest in Southern Africa. The Beira Corridor connects Beira port to Mozambique’s interior and to Zimbabwe. Over the past decade Beira port and its con- necting railway lines have been rehabilitated, a process driven by the Moatize coal mines (Tete) and agricultural growth projects. As a multipurpose port, it has gained relevance in the container freight business to and from Zambia and Zimbabwe. However, it is a shallow tidal port with a 30-kilometer-long access channel that requires constant dredging to allow the navigation of ocean- going vessels.e These limitations generate delays, particularly for bulk cargo, and lead to higher maintenance costs. The Nacala Corridor connects Nacala port to Malawi, Zambia and the provinces of Tete and Niassa. Nacala is the newest of the main ports and one of the deepest-water ports in East Africa, making it appropriate to handle bulk cargo for large vessels, especially coal. With no access constraints for large ocean-going vessels, Brazilian company Vale opted for Nacala as the prefer- ential port for its coal exports. Thanks to its favorable features and its role in unlocking the economic potential of the region, the Nacala Corridor has recently received major investments.f But as the smallest of the three main Mozambican ports, Nacala has constraints in terms of expansion; it is enclosed by urban areas and existing infrastructure. It also lacks ship-to-shore container cranes. Loading and unloading operations can be conducted only by the ships’ cranes, with reduced efficiency. a. Kunaka, Charles. 2010. Logistics in Lagging Regions: Overcoming Local Barriers to Global Connectivity. A World Bank Study. Washington, DC: World Bank b. Hope, Albie, and John Cox. 2015. Topic Guide: Development Corridors. London: Coffey International Development. c. Domínguez-Torres, Carolina, and Cecilia Briceño-Garmendia. 2011. Mozambique’s Infrastructure: A Continental Perspective. Policy Research Working Paper, No. 5885. Washington, DC: World Bank. d. The port of Maputo’s role was diminished during the civil war, as its infrastructure collapsed, and volumes were diverted to its competitors — mainly the ports of Durban and Richards Bay but also Ngqura and Port Elizabeth. e. Rasagam, Ganesh, Michael Engman, Tugba Gurcanlar and Eneida Fernandess. 2014.  “Mozambique’s Development Corridors: Platforms for Shared Prosperity.” In Ross, Doris C. (editor), Mozambique Rising: Building a New Tomorrow. Washington, DC: International Monetary Fund, pp. 87–97. f. These are among the biggest infrastructure investments in Africa, amounting to more than $3 billion in the 2013-17 period. USAID Speed Program. 2018. Nacala Corridor and Port Performance Assessment: February 2018 Draft Final Report. Available at: https://www.agenceecofin.com/files/31/Hebdo/176/ Ecofin-Hebdo-1-2018-02_-_USAID_-Nacala-Corridor-Draft-Final-Report-2018-02-12.pdf. TRADING ACROSS BORDERS 77 TANZANIA MOZAMBIQUE N I ASSA Pemba Lichinga MALAWI ZAMBIA Nacala To Nacala Line Lilongwe Nampula MOATIZE NACALA (including Nacala Velha) COAL MINES Volumes in 2017: Tete Million Tons / Thousand TEUS 13.3 / 70.2 Sena Line Quelimane BEIRA Volumes in 2017: ZIMBABWE To Harare, Lusaka and Lubumbashi Chimoio Million Tons / Thousand TEUS 11.2 / 218.9 Machipanga Line Beira MAPUTO DEVELOPMENT CORRIDOR BEIRA CORRIDOR NACALA CORRIDOR To Harare Limpopo Line GAZA SOUTH Inhambane Source: National Statistics Institute, OpenStreetMap Contributors AFRICA TRADE CORRIDORS IN MOZAMBIQUE BORDER CROSSINGS Ressano Garcia Ressano Garcia Line Xai-Xai PROVINCE CAPITALS IBRD 44113| DECEMBER 2018 To NATIONAL CAPITAL This map was produced by the Johannesburg Matola Cartography Unit of the World Bank MAPUTO MAPUTO HIGHWAYS Group. The boundaries, colors, denominations and any other Volumes in 2017: information shown on this map do not RAILWAYS Goba Line Million Tons / Thousand TEUS imply, on the part of the World Bank Group, any judgment on the legal status ESWATINI 18.2 / 102.0 INTERNATIONAL BOUNDARIES of any territory, or any endorsement or acceptance of such boundaries. 78 Doing Business IN MOZAMBIQUE 2019 TABLE 6.2  Time and cost for border compliance and documentary compliance for Mozambique’s benchmarked locations Export Import Border compliance Documentary compliance Border compliance Documentary compliance Trading across borders score Time Cost Time Cost Time Cost Time Cost (0-100) (hours) (USD) (hours) (USD) (hours) (USD) (hours) (USD) OECD high income 94.21 13 139 2 35 8 100 3 25 Mozambique (Doing Business) 73.84 66 602 36 160 9 399 16 60 Mozambique (average) 68.37 100 441 35 135 41 649 27 113 SADC 61.46 85 654 64 195 102 636 57 188 Sub-Saharan Africa 53.59 97 606 73 169 126 684 98 284 SADC (by sea) 49.91 106 896 73 206 151 1,021 84 272 Sub-Saharan Africa (by sea) 47.70 116 819 81 191 146 877 99 289 Ressano Garcia 81.31 79 245 16 70 9 399 16 60 Beira 68.40 52 335 40 170 84 710 36 140 Maputo 62.92 130 500 36 160 34 815 25 125 Nacala 60.85 140 685 48 140 36 670 30 125 Source: Doing Business database. Note: Rankings are based on the average ease of doing business score associated with trading across borders. The scores are the simple average of the scores for border compliance and documentary compliance. The score is normalized to range from 0 to 100, with 100 representing the best regulatry practices (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019” and the ‘’Data notes’’. The averages for Mozambique are based on the data for three seaports (Beira, Maputo and Nacala) and the Ressano Garcia border crossing. The averages for OECD high-income economies are based on economy-level data for 34 economies, 13 of which export by sea and 8 of which import by sea. The Sub-Saharan Africa averages are based on economy-level data for the 48 economies in Sub-Saharan Africa, 29 of which export by sea and 29 of which import by sea. The SADC averages are based on economy-level data for the 16 economies of the Southern African Development Community, 10 of which export by sea and 8 of which import by sea. . 20.21 —  their direct competitors — with Considering trade by sea, Mozambique’s measured ports lower fees and shorter delays. tend to outperform neighboring ports in Tanzania and South Africa. Mozambique compares favorably with the average of the Southern African various agencies and port and terminal of Cape Town, Durban, Ngqura and Port Development Community (SADC) handling — Mozambique’s average Elizabeth ($676 for each of the four economies trading by sea and land; with compliance time (107 hours) is in line ports).11 However, they are lower than the cheaper and faster compliance with with the average for SADC economies average for SADC economies importing documentary requirements, it trails only exporting by sea (106 hours) and consid- by sea ($1,021). OECD high-income economies (table erably longer than that of South Africa 6.2). This holds true when comparing (94 hours on average) and Tanzania (96 The Ressano Garcia land border crossing Ressano Garcia (with a trading across hours).10 is also affected by the same inefficiencies borders score of 81.31) with its neighbors in these areas; border compliance takes that trade by land, such as Malawi (65.29 This average compliance time is also 79 hours and costs $399. These figures points), Zambia (56.88) and Zimbabwe longer than for the aluminum exports are both above the average for SADC (54.34). This reflects the success of from Maputo port measured by Doing economies trading by land (50 hours Ressano Garcia’s one-stop border post Business. It is easier to export aluminum and $251, respectively) and consider- project. than sugar from Maputo port because ably longer and more expensive than the major exporting company, Mozal, other economies also trading with South A more granular look at the data, however, operates its own dedicated aluminum Africa by land — Eswatini (2 hours and shows that the Mozambican ports’ effi- port terminal. Additionally, aluminum $134), Lesotho (4 hours and $150) and ciency, as measured by Doing Business does not require phytosanitary certifica- Botswana12 (5 hours and $98) — except indicators, is held back by high border tion, unlike sugar exports. for Zimbabwe (88 hours and $562). compliance time for exports and cost for imports (figure 6.1).9 First, in terms Second, Mozambique’s average border of border requirements when exporting compliance costs for imports when by sea — a category that includes dealing trading by sea ($732) are substantially with customs regulations, inspections by higher than for the South African ports TRADING ACROSS BORDERS 79 FIGURE 6.1  Mozambique has room for improvement in border requirements as clearing agents,15 requirements not compliance, in the time for exports and the costs for imports in accordance with the principles of the WTO-TFA.16 Only 61 economies out Documentary Documentary of the 190 measured by Doing Business Import 100 100 Export compliance compliance have the same requirement. It means time time that customs brokers are the only agents that can submit export and import decla- rations through the electronic single 50 Border 100 Trading across 100 Border window where all customs declarations borders score are processed (box 6.2). Other relevant (0–100) private sector actors include, among 0 others, freight forwarders, carriers, ship- ping agents and value-added logistics service providers. 100 100 Documentary Documentary How does exporting work in Mozambique? Import Export To export, the customs broker scans and compliance 100 compliance uploads the necessary documents to cost 100 cost Border Border the electronic single window. Numerous documents are required throughout Beira the export process: a customs declara- Maputo Global best tion, commercial invoice, packing list, Nacala Ressano Garcia certificate of origin, bill of lading, bank commitment term, supervision of packing report for exports, customs release order, Source: Doing Business database. inspection report from scanner, terminal Note: The score is normalized to range from 0 to 100, with 100 representing the best regulatry practices (the higher the score, the better). handling receipts and SOLAS (Safety of Life at Sea) certificate.17 Some of these for export and import. 13 Furthermore, can be submitted through the electronic HOW DOES TRADING the state-owned company Ports and single window, such as the bank commit- ACROSS BORDERS WORK IN Railways of Mozambique (Caminhos de ment term, certifying that the exporter is MOZAMBIQUE? Ferro de Moçambique, CFM) manages a client of the bank and the bank is acting Mozambican railways and both grants as a broker to the transaction; the super- Trading across borders involves multiple concessions and has part ownership in vision of packing report and customs players from both the public and private Mozambican port concessionaires. release order issued by customs; and the sectors. Among the government agen- inspection report issued by Kudumba. cies, the main role is reserved to the Private companies hold key roles, with The customs broker also presents these customs office (Direcção Geral das concessionaires acting as port operators: documents in paper format at a later Alfàndegas) within the tax authority Maputo Port Development Company stage to be stamped by customs, ship- (Autoridade Tributaria, AT), which (MPDC) in Maputo port, Cornelder de ping agents and port authorities. Once enforces customs laws, levies and Moçambique (CdM) in Beira and Corredor the documents are submitted, the elec- collects duties, classifies tariffs and de Desenvolvimento do Norte (CDN) in tronic single window immediately issues investigates customs infractions. Other Nacala.14 Since 2011 the Mozambique a payment slip for the applicable duties, agencies include the Ministry of Industry Community Network, SA (MCNET) has taxes and other charges to be settled. The and Commerce (Ministério da Industria been the concessionaire that manages exporter or the customs broker makes e Comercio, MIC), which is responsible the electronic single window (Janela this payment online and then uploads for licensing traders, and the National Única Electrónica or JÚE), and Kudumba the scanned proof of payment to the Phytosanitary Authority, under the Investments provides border security electronic single window. At this point, Ministry of Agriculture and Food Security services through scanners. All exporters the bank validates the commitment term (Ministério da Agricultura e da Segurança and importers must have a license from through the electronic single window.18 Alimentar, MASA), which attests to the the Ministry of Industry and Commerce After confirming the payment, the tax quality of food and agricultural goods and must use licensed customs brokers 80 Doing Business IN MOZAMBIQUE 2019 BOX 6.2 The electronic single window   Janela Única Electrónica —  An electronic single window is a system that electronically connects stakeholders involved in trade. It enables them to submit and process standard information and documents through a single entry point to fulfill all import, export and transit-related regulatory requirements.a Research has shown that electronic single windows reduce delays and costs, improve revenue yields and enhance predictability,b besides delivering positive impacts on international trade performance.c Mozambique’s electronic single window for trade, Janela Única Electrónica (JÚE), was launched in 2011d and rolled out gradually, replacing the previous manual customs system, the Trade Information Management System. The electronic single window com- bines two main systems: the Customs Management System (CMS) and TradeNet. All customs-related transactions — including customs declarations, manifest management, customs valuation, customs release, collection of duties and fees, and risk manage- ment, among others — fall under the CMS. TradeNet sets the electronic data interchange that links different stakeholders. These include the tax authority, customs brokers (as clearing agents), freight forwarders, shipping agents, container terminal operators, border control agencies, port authorities and commercial banks. Electronic single window Banks Payments E-declaration Customs Ministries Border Authority Agriculture Phytosanitary certification Land INNOQ Conformity assessments Handling fees border Commerce Port and industry Trade license INNOQ = Instituto Nacional de Normalização e Qualidade In 2012 the electronic single window became operational in the ports of Maputo, Beira and Nacala. This helped Maputo reduce the time to comply with requirements for exports by 48 hours and for imports by 72 hours, under the specific case study mea- sured by Doing Business (exports of aluminum to the Netherlands). However, Mozambique has yet to reap the full benefits of the electronic single window. Despite having a built-in risk-management module that determines the clearance channel — the as- sessed risk category for goods to be cleared through customs — the large majority of consignments still require complete physical and documentary inspections. Additionally, the electronic single window in theory allows for a fully paperless environment, but that does not happen in practice, as different stakeholders — especially customs, shipping agents and port authorities — continue to require hard copies of all documents. Finally, a shared concern among small and medium-size companies is the electronic single window’s fees, which can be high, particularly for imports: $64 for consignments valued at $10,000 to $50,000, and 0.85% of the value of the consignment valued above $50,000.e a. United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). 2005. Recommendations and Guidelines on establishing a Single Window to enhance the efficient exchange of information between trade and government: Recommendation No. 33. New York and Geneva: United Nations. b. United Nations Economic Commission for Europe (UNECE). 2005. “Case studies on implementing a Single Window to enhance the efficient exchange of information between trade and government.” Geneva: UNECE. c. Sá Porto, Paulo C., Cristiano Morini and Otaviano Canuto. 2015. “The Impacts of Trade Facilitation Measures on International Trade Flows.” Policy Research Working Paper, No. 7367. Washington, DC: World Bank. d. The electronic single window is managed by a public-private partnership, the Mozambique Community Network, SA (MCNET), composed of the Tax Authority (20%), the Mozambican Trade Association (CTA) (20%) and the Consortium Escopil Lda/SGS SA (60%), which won a concession contract for 15 years. e. These fees (established by Ministerial Order No.25/2012 of March 12) are paid immediately after the customs broker submits the necessary documentation and receives the payment slip. Unlike in Mozambique, in many economies the fees for using the electronic single window are negligible TRADING ACROSS BORDERS 81 authority receives the export declaration How does importing work in These border compliance times range electronically. Mozambique? from 52 hours in Beira to 140 hours in For importing, unlike the export process, Nacala (figure 6.2). The variation is driven While waiting for a conditional customs the customs broker may submit the mostly by differences in efficiency in release order,19 the customs broker required documentation only after the customs procedures and dwelling times requests the supervision of packing and port authority issues a reference number at the port. Nacala’s delays vis-à-vis the container sealing by a customs official, for the arriving vessel (contra-marca). other ports are due to the supervision which must be scheduled 24 to 48 hours This reference number is communicated of packing — this usually takes place at in advance.20 Compulsory for all exports, to the shipping agents, who then inform the Special Export Terminal, where there this procedure is performed at the export- the clearing and forwarding agents. are long lines and high fees25 — and to er’s warehouse or at a terminal legally While Mozambican ports are working the bureaucratic process for the loaded recognized by customs, such as the dry to provide these reference numbers container to enter the port. The latter port called the Nacala Special Export 24 to 48 hours in advance — especially requires a formal authorization by Terminal (Terminal Especial de Exportação Maputo — in practice they are usually Nacala’s local customs office, advance de Nacala – TEEN). The customs official issued just a few hours before the arrival payment of the port terminal’s fees at the then produces a “supervision of packing of the vessel or even after its arrival, as port administration, stamped confirma- report,” which is also signed by different in Beira. customs clearance is completed tion of the container’s entry forms by the units of the tax authority, as well as inland at the customs office located in shipping agent and the inclusion of the other government agencies.21 Next, each port, which offsets any possible container in the following day’s “entry the forwarding agent moves the ship- gains from prearrival clearance. However, program” (programa de entrada), which ment to the terminal, where customs importing by land has recently improved causes long truck lines to enter the port.26 officials check all the documentation with the “single road cargo manifest,” Finally, the container will also wait at the in paper format and provide the final fully implemented in 2018. Carriers must port to be loaded onto the vessel by the customs release. The goods must also introduce this reference number directly ship’s own cranes, as the port does not pass through a scanning inspection.22 In in the electronic single window as soon have ship-to-shore container cranes. a small percentage of cases — less than as the cargo is loaded. This allows 20% — customs officials use their discre- Mozambican customs brokers to start Times can also vary depending on the tionary power to flag the consignment for the clearance process in advance. product that is exported. Nevertheless, an additional physical inspection at this even when similar products are consid- stage. The shipments are then cleared After the customs import declaration ered, there are efficiency differences. to move into the terminal gates. This is submitted, the process works much Maputo, Nacala and Ressano Garcia process applies to trading both by sea like the export case, though without all trade agricultural goods that require and by land. supervision of packing or a required bank phytosanitary certification; however, the commitment term.23 Only a few selected process of completing this inspection For exporting food or agricultural prod- products require a preshipment inspec- and certification is twice as fast in Nacala ucts, an additional step is needed. Prior tion24; auto parts are exempt. However, it (24 hours) than in Maputo and Ressano to submitting the customs declaration, is common for customs officials to physi- Garcia. This is due to the specialization of the exporter must comply with health cally inspect most goods. Nacala’s local MASA office in certifying and phytosanitary requirements imposed exports of pigeon peas, the region’s main either by the Ministry of Agriculture Border compliance time agricultural product. Beira has the fastest or by the trading partners’ authorities. Mozambique’s long times to comply border compliance time for exports, The phytosanitary inspection must be with border requirements for exports are largely because the main product traded requested by the exporter in advance, driven mainly by the requirement to have is coal, which does not require phytosani- and it is conducted at the exporter’s a customs official supervise the packing tary certificates, supervision of packing or warehouse. The phytosanitary certificate, and have the packing report signed. In the scanning inspections.27 Instead, after the confirming that the shipment meets the locations where this is required for the customs release order is issued, customs importing country’s requirements for case study products — Maputo, Nacala authorities check only the information on plant products, is uploaded together with and Ressano Garcia —  it takes on average the vessel’s draft supplied by the ship- the customs declaration. 30 hours from the moment this step is ping agent.28 Therefore, despite having scheduled until the report is produced. the same handling time as Maputo’s (48 This represents more than a quarter of hours) and much longer than Ressano the total time spent in complying with Garcia’s (5 hours), Beira is still fastest border requirements for exports. overall for exports. 82 Doing Business IN MOZAMBIQUE 2019 FIGURE 6.2  Except for Ressano Garcia, on average the longest border compliance through scanning and physical inspec- times are related to port handling efficiency tions by customs. These inspections apply to imports at all four Mozambican EXPORT Ressano locations measured and delay the final 26 2 48 3 79 Time (days) Garcia clearance of the consignment. Nacala 44 4 24 68 140 Maputo 34 4 48 44 130 Port handling times vary widely, ranging from 34 hours in Maputo to 84 hours in Beira 4 2 46 52 Beira. Maputo and Nacala are deep-water ports that do not face vessel congestion IMPORT Ressano issues. Nacala performs slightly worse Garcia 2 4 3 9 than Maputo, despite lower volumes, Nacala 14 22 36 due to infrastructure constraints such as Maputo 12 22 34 the absence of ship-to-shore container cranes. Unlike Maputo and Nacala, Beira Beira 29 55 84 is a shallow tidal port, and it is common Clearance and inspections required by customs authorities for vessels to wait at sea for the high tide to clear the necessary draft to berth. The Simultaneous customs and handling procedures usual waiting times may reach several Clearance and inspections required by agencies other than customs days, especially for bulk cargo vessels. Port or border handling This vessel congestion entering the port Source: Doing Business database. constrains operations, resulting in longer waiting and handling times. The success of Ressano Garcia’s one- and customs procedures at the port Border compliance cost stop border post project is reflected average 18 hours — considerably faster Traders pay up to twice as much to in faster handling times at the border than SADC economies trading by sea comply with border procedures when terminal — 5 hours for exports and 7 for (51hours). Border compliance when importing than when exporting — except imports29 — when compared with other importing through Ressano Garcia (9 in Nacala, where costs are equally high economies in the region trading by land. hours) is also six times faster than in (figure 6.4). Higher fees charged by Ressano Garcia outperforms Malawi’s comparable SADC economies importing customs brokers, forwarding agents and Mwanza border crossing (7 hours for by land (54 hours). shipping agents, as well as steeper costs exports and 6 for imports) and is consid- for the use of the electronic single window erably faster than Zimbabwe’s Breitridge This is mainly due to the electronic and scanner, are to blame. The high fees border (24 and 48 hours, respectively) single window’s impact on the submis- are partly a response to increased risk: and Zambia’s Chirundu border (72 and sion of documents and issuance of the customs brokers and freight forwarders 96 hours). However, Ressano Garcia lags conditional customs release order. With can be held liable for the importer’s behind the members of the Southern the electronic single window, all the infractions of regulations, such as tariff African Customs Union (SACU) that necessary information for the goods misdeclarations, undervaluation of goods trade with South Africa via land: to be cleared is immediately available. and smuggling. Eswatini’s Ngwenya border (1 hour for However, the largest bottlenecks occur exports and 2 for imports) and Lesotho’s after the conditional customs release Fees charged by the shipping Maseru bridge border (4 hours for both) order is issued. Under the clearance agents — including import service, (figure 6.3). process, customs brokers must formally tracking and cleaning fees — are 40% request the local customs office and port higher for imports than for exports. The Regarding border compliance times for administration to retrieve the goods and total of terminal handling fees, including imports, Mozambican ports outperform issue a port gate pass; the goods then go shipping agent’s fees, comes to $345 other ports in the region due to rela- tively fast customs import procedures. On average, Mozambican seaports are The success of Ressano Garcia’s one-stop border post almost three times faster than SADC project is reflected in faster handling times at the border economies trading by sea (51 hours terminal when compared with other economies in the in Mozambique, 151 in the SADC), region trading by land. TRADING ACROSS BORDERS 83 on average for imports by sea. Despite FIGURE 6.3  Trading with a partner within the same customs union is an advantage these fees, Mozambique’s average Time for customs procedures when exporting to South Africa by land port handling fees for imports remain below the average for SADC economies 2 hours 28 hours importing by sea ($446). The costs 11 12 1 associated with complying with border 2 11 12 1 10 2 requirements for imports range from 10 9 3 9 3 $670 in Nacala to $815 in Maputo, where 8 4 8 4 customs brokers and shipping agents’ 7 6 5 7 6 5 fees are the highest. Eswatini* (Ngwenya border crossing) Lesotho* Meanwhile, the costs associated with (Maseru Bridge border crossing) Ressano Garcia complying with border requirements for exports by sea vary from $335 in Beira * Members of the Southern African Customs Union (SACU), which also includes South Africa to $685 in Nacala. This variation signals the difference between an expedited, Source: Doing Business database. low-risk process with no supervision Note: The five members of the Southern African Customs Union (SACU) are Botswana, Eswatini, Lesotho, Namibia of packing — as with coal exports from and South Africa. Botswana and Namibia are not included here as they trade by sea via Durban and Walvis Bay ports, respectively. Beira — and the cumbersome customs and port procedures associated with exports of pigeon peas from Nacala. The supervision of packing in Nacala occurs Documentary compliance time The time to obtain all documents for at the Special Export Terminal, whose With the implementation of the elec- imports is fastest in Maputo (25 hours) fees ($132) represent 19% of all the costs tronic single window at the national level, and slowest in Beira (36 hours). In Beira to comply with border requirements for the time to obtain and prepare all docu- the release of the bill of lading by the exports. In Nacala the shipping agent ments for both exports and imports is shipping agents takes slightly longer. also charges a fee to obtain an empty relatively low in Mozambique and faster Shipping agents release it only after the container for exports, which accounts than the SADC average when trading local charges are paid; the bill of lading for the difference in port handling fees by sea — including for South African must then be submitted electronically between Nacala ($355) and Beira ($175). ports. Mozambican traders spend on and in hard copy to the local customs average 35 hours to complete all docu- office. This process is similar across all Ressano Garcia has the lowest costs mentary requirements for exports and ports, making this the must cumbersome associated with complying with border 27 hours for imports. On exports by document overall. requirements for both exports ($245) sea, the times range from 36 hours in and imports ($399). On the export front, Maputo to 48 hours in Nacala (figure Completing documentary requirements expenses in Ressano Garcia are on par with 6.5). This difference points to the more when trading by land via Ressano Garcia the average of SADC economies trading bureaucratic process in Nacala, where is much faster, as it does not require the by land ($250), but they are substantially documents — especially the bill of use of a bill of lading. In Ressano Garcia higher for imports ($251 average in the lading and the mate’s receipt (recibo de these requirements take only 16 hours SADC economies). customs procedures bordo) — must be stamped several times for both exports and imports, much for imports (scanner, electronic single by customs, shipping agents and the faster than in SADC economies trading window fees and broker fees) account port authority before the container may by land (49 hours for exports and 29 for the difference. These costs are higher be brought into the port and loaded onto for imports). Ressano Garcia, however, in Ressano Garcia ($285) than in any the vessel. In Maputo the documents underperforms other economies trading of the neighboring countries trading by must also be presented in paper format with South Africa by land within the land — Malawi ($132), Zimbabwe ($148) at some point, but the process is more SACU — Lesotho (1 hour for both exports and Zambia ($180) — or than in other streamlined. SACU economies importing from South Africa by land — Eswatini ($134) and Lesotho ($150). Port handling times vary widely, ranging from 34 hours in Maputo to 84 hours in Beira. Maputo and Nacala are deep- water ports that do not face vessel congestion issues. 84 Doing Business IN MOZAMBIQUE 2019 FIGURE 6.4  Importing is more expensive in Mozambique than exporting—except in Nacala, where costs are similar 815 Border compliance cost (USD) 710 685 670 653 636 375 270 500 355 256 Port or border handling 327 390 399 195 335 20 114 114 Clearance and inspections 20 65 required by agencies other than customs 245 175 440 440 35 20 285 310 285 Clearance and inspections 280 261 266 190 required by customs authorities 160 E Exports E I E I E I E I E I I Imports Beira Maputo Nacala Ressano Garcia SADC média SADC = Southern African Development Community Source: Doing Business database. Note: Globally, the average costs associated with complying with border requirements are $396 for exports and $450 for imports. and imports) and Eswatini (2 hours and 4 The main driver of documentary costs in Mozambique — hours, respectively). representing 85% of the total documentary compliance cost of trading by sea—is the cost to obtain the bill of lading Documentary compliance cost from the shipping agent. There is not much variation across Mozambican ports regarding the costs to complete all necessary documents. The incurred in all South African ports ($60 documentary costs in these economies least expensive port is Nacala — $140 for exports and $73 for imports). The are due to higher fees associated with the for exports and $125 for imports30 — and cost to obtain the bill of lading from the inland bill of lading. the most expensive is Beira — $170 shipping agent in South African ports is for exports and $140 for imports. The considerably lower due to the automa- Overall performance with same main driver of documentary costs in tion of documents and to higher cargo export product Mozambique — representing 85% of the volumes. Maputo port is slower in terms of border total documentary compliance cost of compliance than Fiji — the other economy trading by sea — is the cost to obtain the The documentary costs when trading by exporting sugar by sea — especially due bill of lading from the shipping agent. This land via Ressano Garcia ($70 for exports to longer times for customs and phytos- also accounts for the differences among and $60 for imports) are much lower than anitary procedures. This also holds true Mozambican ports, as shipping agents in the Mozambican seaports because no when comparing Ressano Garcia with charge different fees for the bill of lading bill of lading is needed. These costs are Azerbaijan, the other economy exporting in different ports. Overall, the average also considerably lower than those in sugar via land crossing. Nacala lags documentary costs in Mozambican ports other SADC economies trading by land Myanmar in the cost of border compli- ($157 for exports and $130 for imports) ($176 for exports and $105 for imports) ance when exporting edible vegetables, compare favorably with the average for and lower than for those economies particularly due to the fees associated with SADC economies trading by sea ($206 trading with South Africa by land, despite customs procedures and port handling. and $272, respectively) and with that of all being part of the SACU — Eswatini Beira, on the other hand, is slower than the neighboring Tanzania ($275 and $375) ($76 for both exports and imports) other economies exporting coal — Libya but are more expensive than those and Lesotho ($90 for both). The higher TRADING ACROSS BORDERS 85 FIGURE 6.5  Mozambique’s strong performance in documentary compliance showcases the benefits of the electronic single window Documentary compliance to export Documentary compliance to import Time 26 economies* Cost Time 30 economies*** Cost (hours) (global best) (USD) (hours) (global best) (USD) 0 — Lesotho 0 20 economies** 0 — Lesotho 0 31 economies**** — Eswatini, OECD (global best) — Botswana, (global best) high income OECD high income 25 Eswatini 25 — OECD OECD Ressano Garcia — high income Ressano Garcia high income 20 Durban, Ngura, 20 Ressano Garcia Botswana Kenya 50 Port Elizabeth Maputo 50 Botswana — South Africa Mozambique average Mozambique average Nacala South Africa, Cape Town, Ressano Garcia Durban, Ngura, Port Elizabeth Maputo 75 — Cape Town Beira, South Africa, 75 40 Beira Eswatini 40 Cape Town,Durban, Eswatini — Lesotho Ngura, Port Elizabeth — Lesotho Nacala 100 100 Malawi Mozambique average — SADC — Kenya 60 SADC 125 Mozambique average 60 — Kenya 125 Maputo, Nacala Durban, Ngura, — Port Elizabeth Nacala Beira — SSA 150 — Zambia 150 — Zimbabwe — Malawi, South Africa Maputo SSA — Malawi 80 80 — Zimbabwe Beira, Zimbabwe 175 — Botswana 175 — Zambia Cape Town, Tanzania, — Kenya — SADC — Zambia 200 SADC 200 100 — Zimbabwe Zambia 100 — SSA SSA 284 Tanzania 275 120 Malawi 342 Tanzania 240 Tanzania 375 South Africa = Average for Cape Town, Durban, Ngqura and Port Elizabeth SADC = Southern African Development Community Source: Doing Business database. * Top performers, time to export: Austria; Belgium; Canada; Croatia; Czech Republic; Denmark; Estonia; France; Germany; Greece; Hong Kong SAR, China; Hungary; Ireland; Italy; Republic of Korea; Lesotho; Luxembourg; Netherlands; Poland; Portugal; Romania; San Marino; Slovak Republic; Slovenia; Spain; and Sweden. ** Top performers, cost to export: Austria; Belgium; Croatia; Czech Republic; Denmark; Estonia; France; Georgia; Hungary; Italy; Luxembourg; Netherlands; Norway; Poland; Portugal; Romania; San Marino; Slovak Republic; Slovenia and Spain. *** Top performers, time to import: Austria; Belgium; Bulgaria; Canada; Croatia; Czech Republic; Denmark; Estonia; Finland; France; Germany; Greece; Hong Kong SAR, China; Hungary; Ireland; Italy; Republic of Korea; Latvia; Lesotho; Lithuania; Luxembourg; Malta; Netherlands; New Zealand; Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain and Sweden. **** Top performers, cost to import: Austria; Belarus; Belgium; Bulgaria; Croatia; Czech Republic; Denmark; Estonia; Finland; France; Germany; Greece; Hungary; Iceland; Italy; Kazakhstan; Latvia; Lithuania; Luxembourg; Malta; Netherlands; Norway; Poland; Portugal; Romania; Slovak Republic; Slovenia; Spain; Sweden and the United Kingdom. and Puerto Rico — due to longer customs Domestic transport time and cost The wait times on the road to and from the procedures (figure 6.6). All benchmarked Mozambican locations ports, as well as the downtime for trucks have similar domestic transportation awaiting supervision of packing, translate In terms of documentary compliance, times,31 all taking four hours for both into inefficiencies in the trucking sector all Mozambique’s locations are faster exports and imports regardless of the and high transport costs. The costs in all than their respective counterparts, but distances from the warehouse to the locations are the same for both exports compliance in Beira and Maputo costs ports or land crossing. These times are and imports, varying from $185 in Beira considerably more. Beira’s $310 in total similar due to poor road conditions and to $400 in Ressano Garcia, which is documentary compliance cost contrasts congested access to the ports. Ressano outside Maputo’s city limits. However, with Libya’s $110 and Puerto Rico’s $150; Garcia is farther away from a warehouse Nacala ($350) is the most expensive port in Maputo, meanwhile, the cost is $285, than the port in Maputo, but the N4 toll when measured in US$ per kilometer; as opposed to $134 in Fiji. These differ- road is in better condition and the roads at $35/km it costs more than 10 times ences are mainly due to the higher costs leading to the border terminal are not as the average for SADC economies ($3/ associated with processing the bill of congested. km) for both exports and imports. These lading in Mozambican ports. higher domestic transport costs reflect 86 Doing Business IN MOZAMBIQUE 2019 FIGURE 6.6  Among economies exporting the same product, Maputo lags because of the time and cost of complying with border procedures, Beira because of high costs to obtain documents Trading across borders score (0–100) Azerbaijan 77.04 HS 17 Ressano Garcia 81.31 Sugar Fiji 77.57 Maputo 62.92 HS 38 Myanmar 47.67 Edible vegetables Nacala 60.85 Libya and Puerto Rico HS 07 73.26 (United States) Average Coal Beira 68.40 Time Cost Time Cost Border compliance Documentary compliance Source: Doing Business database. Note: The trading across borders score is normalized to range from 0 to 100, with 100 representing the best practices (the higher the score, the better). For more information, see the chapter “About Doing Business and Doing Business in Mozambique 2019” and the ‘’Data notes’’. The only economy in Doing Business that exports goods classified as HS 07 (edible vegetables and certain roots and tubers) by sea is Myanmar. The only economies that export goods classified as HS 17 (sugars and sugar confectionery) in Doing Business are Azerbaijan, by land, and Fiji, by sea; these compare, respectively, with Ressano Garcia and Maputo. The economies that export goods classified as HS 38 (miscellaneous chemical products) by sea in Doing Business are Libya and Puerto Rico. the usual long queues of trucks waiting to While there are known compli- broker fees and may lead to a decrease enter and leave Nacala port. ance issues with traders, customs in cost. In addition, applying risk-based brokers and forwarding agents in inspections would further limit personal Mozambique — including tariff misdecla- interactions and reduce the opportunities WHAT CAN BE IMPROVED? rations, under-invoicing, undervaluation for bribes. of goods, misclassification and smug- For more than two decades, the gling32 — it is essential to devise a balance Mozambique can find inspiration from Mozambican government has enacted between enforcement and trade facilita- other regional players for ways to business regulation reforms to facili- tion. To do so, the tax authority could streamline customs procedures and tate trade, and others are ongoing. improve its automated risk-management adopt risk-based management. In 2017 Nonetheless, Mozambique should keep system by more precisely defining the Mauritius amended its Customs Act to on reforming in areas that would lead to criteria used to assess risk within the introduce a risk-management mecha- efficiency gains for traders (box 6.3). electronic single window. Using an effi- nism to streamline customs clearance cient risk-based approach would enable and inspections. The new system has Streamline customs procedures customs to conduct physical inspec- since reduced physical inspections and and apply efficient risk-based tions only in a minority of cases, both scanning for exports, expediting the management for exports and imports, thus speeding clearance of declarations. As a result, the Customs procedures in Mozambique up customs clearance. If a consignment time required for export customs clear- are not based on efficient risk-based is not flagged for risks, the conditional ance and border compliance decreased management; physical inspections apply customs release order would become by 16 hours, more than halving the time to practically all consignments. When final and allow the consignment to be associated with customs procedures. it comes to exports, the supervision of quickly cleared. This scenario would Rwanda implemented, among other packing requirement adds an unneces- be similar to what already occurs with initiatives, a risk-based inspection system sary burden for all exporters. In terms of streamlined customs clearance of coal for exports. As a result, coffee and tea are imports, most consignments are physi- consignments in Beira, which is six times now classified as low-risk goods and are cally inspected by customs before the faster than the average of the other loca- cleared without physical inspections by final customs clearance. tions. Such an initiative would also reduce customs in most cases. the risks that are factored into customs TRADING ACROSS BORDERS 87 customs of Oman integrated 28 govern- BOX 6.3 Initiatives for facilitating trade in Mozambique ment bodies — including the Ministry of Beyond the implementation of the electronic single window, Mozambique has un- Agriculture and Fisheries, the Ministry dertaken other reforms in the past two years. These include the rehabilitation and of Health and the Ministry of Industry upgrade of infrastructure at the Maputo port and Ressano Garcia border crossing; and Commerce — into its electronic the full implementation of the single road cargo manifest, which carriers submit single window, the Bayan system. It also through the electronic single window; and the simplification of export documen- incorporated a risk-management module tary compliance requirements. Moreover, in cooperation with the South African and brought the number of electronic Revenue Service (SARS), Mozambique’s tax authority has gradually rolled out the services it offers to 92. The Bayan system project for the one-stop border post at Ressano Garcia. allows the online submission and elec- In 2013 the tax authority also launched the Authorized Economic Operator (AEO) tronic processing of declarations, licenses program, which allows trusted traders to benefit from streamlined customs clear- and permits by the different stakeholders, ance — so-called “blue channels.” While the adoption of the program and the which has reduced the time required to share of declarations processed through blue channels remains limited,a this ini- comply with documentary requirements tiative reduces physical and documentary checks. By engaging customs officials, for both exports and imports. customs brokers, forwarders and importers in a relationship based on partnership and compliance, the AEO scheme may produce notable impacts in the future. Remove the mandatory use of a AEO programs are usually restricted to a limited number of trusted larger companies. While customs brokers and foster recognized as a good practice, such programs are acknowledged by Doing Business as a reform making it easier to do business only when they encompass the majority of traders or when they competition in the brokerage create positive spillover benefits for the trading community as a whole. In Mozambique there profession were only nine approved AEOs as of October 2016. World Trade Organization. 2017. Trade Policy Review. WT/TPR/S/354/Rev.1. Geneva: World Trade Organization. According to WTO-TFA principles, the use of customs brokers should not be mandatory as it currently is in Despite having a working electronic single window, Mozambique. Decree No.18/2011 and Mozambique falls short of reaping its full benefits. Article 82 of the Chamber of customs Brokers Statute establish that licensed customs brokers must conduct all Fully implement the electronic Furthermore, to take full advantage of the import, export and transit operations. By single window by going electronic single window, Mozambique removing that requirement, Mozambique paperless, and connect more could electronically link the remaining could enable traders to be registered as stakeholders to the platform stakeholders to the platform. These users of the electronic single window and Despite having a working electronic include government agencies as well provide training so they can input the rele- single window, Mozambique falls short as the traders themselves. This would vant data for their transactions directly of reaping its full benefits. While all allow the platform to work as a true into the system. While customs brokers documents are currently uploaded single window where all trade-related will remain relevant due to their expertise electronically, resulting in a perfor- transactions are processed electronically in the industry, the costs associated with mance that compares favorably with and information provided in real time, complying with border requirements are the region, traders (or their agents) are further streamlining procedures. With likely to be reduced. Doing Business data still required to present hard copies of all all stakeholders connected, there would show that in economies where the use of documents — most of them redundantly be increased coordination among them, customs brokers is not mandatory, these stamped by customs, shipping agents allowing different agencies to schedule costs are more than 40% lower than in or port authorities. Mozambique would simultaneous inspections when required economies where their use is required. make better use of the electronic single and enabling consignments to be seam- window by transitioning to a paperless lessly managed electronically, from the Decree No.18/2011 also imposes limits on environment, limiting the use of hard- submission of the customs declaration the licensing of customs brokers, which copy requirements. These practices are to the final customs and port or border constrains competition in this sector. also in line with the principles of the clearance. Ultimately, the increased There is no defined schedule for the WTO-TFA, ratified by Mozambique in coordination would increase efficiency, license examination for customs brokers; 2017. Moving toward a paperless trade reducing the associated time and cost. it is a civil service exam offered by the environment would avoid long waits for tax authority when deemed necessary the relevant paper documentation, such Oman shows the benefits of enhancing to increase the pool of brokers.33 These as those currently seen in Nacala. an existing electronic single window. limits keep a tight control on the supply In 2017 the Directorate General of of customs brokers in the market. Easing 88 Doing Business IN MOZAMBIQUE 2019 those limits and enhancing competition Among all Mozambique’s land border crossings with its in the brokerage profession may also neighbors, Ressano Garcia is the only one with a one-stop lead to lower fees and higher quality of border post. service. participating in customs union agree- substantial rehabilitation and upgrading Strengthen regional integration ments. Mozambique is a founding efforts, especially along the trade corri- through the effective member of the SADC and has signed dors — including the major ports and the implementation of border regional trade agreements with the other roads and railways that connect them cooperation and customs union SADC members, establishing a free trade to the interior. The port of Maputo has agreements area for most goods (SADC-FTA).36 undergone significant improvements, Mozambique’s trade corridors connect customs unions entail deeper integration, including the expansion of several termi- its landlocked neighbors and the Gauteng usually through a “whole-of-govern- nals, the addition of a new terminal, the region in South Africa to the Indian ment” approach that addresses issues dredging of the access channel to the port Ocean. Despite its strategic location, on and behind the border — among and an increase in warehouse storage Mozambique has yet to achieve a high others, common standards, sanitary and capacity. Six berths were also rehabili- level of regional cooperation and regional phytosanitary measures, restrictive rules tated, as was the access to the port via trade.34 Among all Mozambique’s land of origin and regional infrastructure. As roads and railways. As a result, terminal border crossings with its neighbors, the examples of Eswatini and Lesotho handling at the Maputo port complex has Ressano Garcia is the only one with show, being in a customs union, the improved, reducing the time for export a one-stop border post. This project SACU, has enabled these economies to border compliance. The Nacala and Sena resulted in a more effective management reduce the time and cost when trading railway lines have also been rehabilitated. of the border under the cooperation of with fellow SACU member South Africa. both Mozambican and South African Participating in such an agreement with Despite these improvements, trade logis- authorities. Sharing information, avoiding its neighbors — whether by deepening tics infrastructure remains a significant duplicate procedures and conducting the SADC-FTA or expanding SACU constraint.38 For example, in November joint inspections are among the benefits membership — could bring about impor- 2017 Beira port had to do emergency of border cooperation, resulting in faster tant gains for Mozambique. Customs dredging to allow the port to remain in clearance times at the border. Similar unions render border compliance proce- operation. It also recently added a new projects, which are under negotiation,35 dures more efficient, decreasing the time gate, but access roads through Munhava would also deliver results in border cross- and cost associated with completing are still in extremely poor condition. The ings with other neighbors. them. The data for Eswatini and Lesotho latter is a common concern to all the are corroborated at the global level, as ports analyzed. Indeed, the long times Uganda is an example of how border exporting to a partner in a customs union recorded for domestic transport are cooperation leads to strong improve- via a land border takes on average 13.3 related to truck congestion due to poorly ments. The Malaba one-stop border post hours — just over a third of the 35.5 hours maintained access roads and entrances. is shared by Uganda and Kenya and aims it takes to export by land to a partner not Truck congestion generates inefficiencies to harmonize transit clearance between in a customs union. Deeper regional inte- and higher transport costs. It is important the two countries. It houses several gration may also lead to the creation of to note that the road connecting Maputo government agencies on both sides of regional markets, generating economies port to Ressano Garcia has been recently the border, including customs. Although of scale for local firms and increasing rehabilitated and while there are still the development of the Malaba one-stop trade flows between cooperating part- lines, these have been reduced. border post is still being finalized, in 2017 ners.37 Strengthening regional integration it had already improved the flow of goods is a step toward improving efficiency at Among the three seaports, Nacala from Uganda into Kenya thanks to faster the borders and expanding and diversi- has received the most investment in customs processing and automation as fying trade. the past few years. Although this has well as more clearance lanes. customs brought benefits, the transport network clearance and terminal handling proce- Upgrade trade logistics connecting to Nacala port — including dures at the Malaba border crossing have infrastructure with a special rail lines and roads — requires further improved, reducing the time for export focus on access roads to the upgrades to reduce transport times and border compliance. ports increase the area from which the port Mozambique’s trade logistics infra- draws business; this would enable an Furthermore, Mozambique may structure was shattered during the increase in cargo volumes and generate strengthen regional integration by civil war. Since then there have been economies of scale. Additionally, TRADING ACROSS BORDERS 89 Nacala has limited space for handling Bulletin 67(195): 59-74. See also Newitt, setting standards and conducting conformity Malyn. 2005. A History of Portuguese Overseas assessments on imported goods. and storage facilities, due to the port’s Expansion, 1400–1668. Abingdon: Routledge. 14. These concessionaires are also jointly narrow location. This constraint has been 2. These include landlocked neighbors, such as owned by the CFM with varying degrees of partially solved by the new coal terminal Malawi, Zambia, Zimbabwe and Eswatini, as participation. well as the industrial Gauteng region in South 15. Decree No.18/2011 and Article 82 of the on the opposite side of Nacala Bay, but Africa. It is important to note that Maputo Chamber of Customs Brokers Statute expanding handling and storage facilities is the closest port to Johannesburg (540 establish the requirement of licensed customs is still a priority. Nacala also faces a severe kilometers), closer than the ports of Durban brokers to conduct all import, export and (570 km) or Richards Bay (610 km). transit operations. constraint in its loading and offloading 3. World Bank Group. World Integrated Trade 16. Article 10(6), WTO-TFA. operations, as the port does not have Solution. See Mozambique profile at https:// 17. The bill of lading and the SOLAS certificate any ship-to-shore container cranes and wits.worldbank.org/countryprofile/en/ apply to trade by sea. country/MOZ/startyear/2012/endyear/2016/ 18. There are still some cases where the trader is completely dependent on the vessels’ indicator/NE-TRD-GNFS-ZS. may be required to pay by check directly at own equipment. By upgrading its infra- 4. World Bank Group. 2016. Republic of the bank and get a hard copy of the stamped structure Mozambique could reduce Mozambique: Systematic Country Diagnostic. payment receipt. These steps are no longer Washington, DC: World Bank; National common but add delays to the process when delays in accessing the ports, cut trans- Directorate of Studies and Policy Analysis. they occur. action costs and increase traffic volumes, 2013. “Inquérito as Indústrias Manufactureiras 19. The customs administration issues a release enhancing competitiveness. 2017 (IIM 2017).” Maputo: National order once customs formalities have been Directorate of Studies and Policy Analysis, completed. In Mozambique a conditional Ministry of Planning and Development. customs release order is issued after a Consider reducing 5. Martincus, Christian Volpe, Jerónimo customs official assesses the information administrative fees Carballo and Alejandro Graziano. 2015. submitted through the electronic single “Customs.” Journal of International Economics window; it is conditional on additional physical Traders in Mozambique must pay heavy 96(1): 119–37. Djankov, Simeon, Caroline L. and documentary checks. The final customs administrative fees, specifically those Freund and Cong S. Pham. 2006. “Trading on release order is only issued after supervision charged by the electronic single window Time.” The Review of Economics and Statistics of packing and scanning inspections for 92(1):166-173. exports, and after scanning and physical and scanner. These fees are considerably 6. Freund, Caroline L., and Nadia Rocha. inspections for imports. higher than those incurred in comparable 2010. “What Constrains Africa’s Exports?” 20. If exporting containerized goods via a seaport, economies. They hinder the competitive- Policy Research Working Paper, No. 5184. as in the Maputo and Nacala case studies, Washington DC: World Bank. the trader (or its forwarding agent) must ness of exporting companies and raise 7. Moïsé, Evdokia, and Silvia Sorescu. 2013. also request an empty container from the domestic prices for both final consumers “Trade Facilitation Indicators: The Potential shipping agent, to be loaded at the exporter’s and companies importing inputs from Impact of Trade Facilitation on Developing warehouse. Countries’ Trade.” Trade Policy Papers No. 144. 21. The tax authority has mobile units, “Brigadas overseas. Reducing these fees would Paris: Organization for Economic Cooperation Móveis” (FAST and BRT), while other agencies enable cost savings that could be passed and Development. may include units from MASA (including on to consumers and could strengthen 8. Rippel, Barbara. 2011. “Why Trade Facilitation agriculture and forestry officials) and the is Important for Africa.” Africa Trade Policy police, depending on the product under competitiveness. Notes, No. 27. Washington, DC: World Bank. assessment. 9. Border compliance captures the time and 22. Most consignments are instructed to go Mozambique could take into consid- cost associated with compliance with a) through the scanner, and all shipments must the economy’s customs regulations; b) pay the scanner fees, even if not going through eration the recent example of China. inspections required by agencies other than the scanning inspection. In 2018 — as part of its Streamline customs that are mandatory in order for the 23. The bank commitment term is now being Administration, Delegate Power and shipment to cross the economy’s border; and implemented for imports through a pilot c) the time and cost for handling that takes project. The rollout is scheduled for March Improve Public Service Initiative — the place at its port. If customs clearance or 2019. government of China streamlined import inspections take place at the port at the same 24. A preshipment inspection (PSI) refers to and export procedures, eliminating all time, the time estimate for border compliance a physical inspection and verification of takes this simultaneity into account. documents for the goods to be imported at administrative charges from government 10. Beira is the only port that performs better on the point of supply, before shipping, to ensure authorities involved in the international border compliance times for exports due to that these comply with local regulations. In trade process. For both Beijing and the facilitated process to export coal. Mozambique the products subject to a PSI are 11. Ports in South Africa have similar listed in Service Order No. 05/DGA/2016 of Shanghai, this measure led to a reduc- performances as they are all managed by April 27. tion in the costs associated with customs the same state-owned freight transport and 25. Small and medium-size exporters in Nacala procedures. handling company, Transnet. By contrast, usually do not have the facilities to receive each port in Mozambique is managed by its customs officials at their warehouse or factory, own concessionaire, thus resulting in different and the TEEN is one of the only terminals performances between the ports. legally recognized by the government in NOTES 12. The export case study assumes an export of the region. Additionally, until 2017 it was HS 75 (nickel and articles thereof) to Norway, mandatory for Nacala’s exporters to use the via Durban port. The border analyzed by Doing TEEN, a requirement that was withdrawn by 1. Wood, Marilee, Laure Dussubieux and Peter Business in the transit to South Africa is the the tax authority’s Service Order No. 37/2017. Robertshaw. 2012. “The Glass of Chibuene, Ramatlabama border crossing. The government is also trying to curb TEEN- Mozambique: New Insights into Early Indian 13. The Instituto Nacional de Normalização e related costs by moving to incorporate the Ocean Trade.” South African Archaeological Qualidade (INNOQ) is also responsible for terminal into the port of Nacala. 90 Doing Business IN MOZAMBIQUE 2019 26. Trucks line up overnight at the entrance of countries in infrastructure, 75 in the quality the port, in hopes that their containers will of railway infrastructure and 88 in quality of be included in the following day’s “entry port infrastructure. Schwab, Klaus, and Xavier program,” issued between 9 a.m. and 10 a.m. Sala-i-Martín (editors). 2017. The Global daily. If a container is not included, the truck Competitiveness Report 2017–2018. Geneva: must wait in line an additional 24 hours. World Economic Forum. 27. Coal is transported by rail from Tete (Moatize) directly to terminal No. 8 at the Beira port, via the Sena line. The oceangoing vessels with coal cargo do not berth at the Beira port but remain anchored at the transshipment deep-water area located about 25 nautical miles from the loading berth and are loaded by two transshipment feeder vessels. A customs official may be present while these feeder vessels successively load the cargo, but that person’s focus is to receive and confirm the information on the difference in the vessel’s draft, supplied by the shipping agent, in order to ascertain the total load of the shipment. 28. A vessel’s draft is the distance between the water surface and the lowest point of the vessel. 29. These include 2 hours of customs procedures taking place simultaneously for exports and 4 hours of customs procedures taking place simultaneously for imports. 30. The costs associated with documentary requirements for imports is also the same in Maputo ($125). 31. The times and costs also include those for loading and unloading the shipment at the warehouse. The distances to and from the warehouse in the business cities to the ports are around 10 kilometers, while the distance from Ressano Garcia to Maputo is around 85 kilometers. 32. Baker, Raymond, Christine Clough, Dev Kar, Brian LeBlanc and Joshua Simmons. 2014. Hiding in Plain Sight: Trade Misinvoicing and the Impact of Revenue Loss in Ghana, Kenya, Mozambique, Tanzania, and Uganda: 2002-2011. Washington DC: Global Financial Integrity. 33. The Chamber of Customs Brokers is also consulted in this regard. 34. In 2015 exports from Mozambique to other economies in Sub-Saharan Africa (SSA) amounted to 24.8% (South Africa alone representing 18.3%), while imports from SSA economies amounted to 33.6% ((South Africa alone representing 30.10%). World Bank Group. World Integrated Trade Solution. 35. Mozambique has already signed memoranda of understanding with its neighbors, facilitating the sharing of information and mutual assistance on customs issues. World Trade Organization. 2017. Trade Policy Review. WT/TPR/S/354/Rev.1. Geneva: World Trade Organization. 36. The SADC-FTA was signed in 2000 and entered into force in 2008. Mozambique had a transition period until 2012 for imports of goods from all SADC members except South Africa. The transition period for imports of goods from South Africa ended in 2015. 37. Chauffour, Jean-Pierre, and Jean-Christophe Maur (editors). 2011. Preferential Trade Agreement Policies for Development: A Handbook. Washington, DC: The World Bank. 38. According to the World Economic Forum, Mozambique is ranked 125 out of 138 91 Data notes T he indicators presented and and economies and over time—with analyzed in Doing Business in assumptions about the legal form of the LIMITS TO WHAT IS Mozambique 2019 measure busi- business, its size, its location and the MEASURED ness regulation and the protection of nature of its operations. Questionnaires property rights as well as their effect were administered to local experts, The Doing Business methodology has four on businesses, especially small and including lawyers, notaries, clearing limitations that should be considered medium-size domestic firms. First, the agents and freight forwarders, public when interpreting the data. First, the data indicators document the complexity of officials and other professionals routinely often focus on a specific business form— regulation, such as the number of proce- administering or advising on legal and generally a limited liability company dures to open a company or to register a regulatory requirements. These experts (or its legal equivalent) of a specified transfer of commercial property. Second, had several rounds of interaction with the size—and may not be representative of they gauge the time and cost to achieve project team, involving conference calls, the regulation on other businesses (for a regulatory goal or comply with regula- written correspondence and visits by the example, sole proprietorships). Second, tion, such as the time and cost to enforce team. The data from questionnaires were transactions described in a standardized a contract. Third, they measure the extent subjected to numerous rounds of verifi- case scenario refer to a specific set of of legal protections, for example, the cation, leading to revisions or expansions issues and may not represent the full protections of property rights. of the information collected. set of issues that a business encoun- ters. Third, the measures of time involve This report presents Doing Business indi- The Doing Business methodology offers an element of judgment by the expert cators for 10 provinces, three ports and several advantages. It is transparent, respondents. When sources indicate one border crossing in Mozambique. The using factual information about what laws different estimates, the time indicators data for all sets of indicators in Doing and regulations say and allowing multiple reported in Doing Business represent the Business in Mozambique 2019 are current interactions with local respondents to median values of several responses given as of September 1, 2018. The data for the clarify potential misinterpretations of under the assumptions of the standar- 189 other economies used for compa- questions. Having representative samples dized case. rison are based on the indicators in Doing of respondents is not an issue; Doing Business 2019: Training for Reform, the 16th Business is not a statistical survey, and Finally, the methodology assumes that in a series of annual reports published by the texts of the relevant laws and regula- a business has full information on what the World Bank Group. tions are collected and answers checked is required and does not waste time for accuracy. The methodology is easily when completing procedures. In prac- replicable, so data can be collected in a tice, completing a procedure may take methodology large sample of locations and economies. longer if the business lacks informa- Because standard assumptions are used tion or is unable to follow up promptly. The data for Doing Business in Mozambique in the data collection, comparisons and Alternatively, the business may choose 2019 were collected in a standardized benchmarks are valid across locations. to disregard some burdensome proce- way. To start, the team customized the Finally, the data not only highlight the dures. For both reasons the time delays Doing Business questionnaires for the extent of specific regulatory obstacles reported in Doing Business would differ specific study in Mozambique. The ques- to business but also identify their source from the recollection of entrepreneurs tionnaires use a simple business case to and point to what might be reformed. reported in the World Bank Enterprise ensure comparability across locations Surveys or other firm-level surveys. 92 Doing Business in MOzAMBIQUE 2019 Economy characteristics Gross national income per capita Doing Business in Mozambique 2019 relies on 2017 income per capita data as published in the World Bank’s World Development Indicators 2018. Income is calculated using the Atlas method (in current U.S. dollars). For cost indicators expressed as a per- centage of income per capita, 2017 gross national income (GNI) per capita in current U.S. dollars is used as the denominator. Mozambique’s income per capita for 2017 is $420 (MZN 25,797). Region and income grou Doing Business uses the World Bank regional and income group classifications, available at https://datahelpdesk.worldbank.org/ knowledgebase/articles/906519. Regional averages presented in figures and tables in Doing Business in Mozambique 2019 include economies from all income groups (low, lower middle, upper middle and high income), though high-income OECD economies are assigned the “regional” classification OECD high income. Exchange rate The exchange rate for the U.S. dollar used in this report is: $1 = 61.42 Mozambican Metical (MZN). After a study of laws, regulations and by local experts differ, inquiries continue starting a business publicly available information on busi- until the data are reconciled. ness entry, a detailed list of procedures Doing Business records all procedures is developed, along with the time and To make the data comparable across officially required, or commonly done cost to comply with each procedure locations, several assumptions about the in practice, for an entrepreneur to start under normal circumstances and the businesses and the procedures are used. up and formally operate an industrial paid-in minimum capital requirement. or commercial business, as well as Subsequently, local incorporation Assumptions about the business the time and cost to complete these lawyers, notaries and government offi- The business: procedures and the paid-in minimum cials complete and verify the data. ƒƒ Is a limited liability company (or its capital requirement (figure 7.1). These legal equivalent). If there is more than procedures include the processes entre- Information is also collected on the one type of limited liability company preneurs undergo when obtaining all sequence in which procedures are to in the economy, the limited liability necessary approvals, licenses, permits be completed and whether procedures form most common among domestic and completing any required notifica- may be carried out simultaneously. It is firms is chosen. Information on the tions, verifications or inscriptions for the assumed that any required information most common form is obtained from company and employees with relevant is readily available and that the entre- incorporation lawyers or the statis- authorities. The ranking of locations on preneur will pay no bribes. If answers tical office. the ease of starting a business is deter- mined by sorting their scores for starting FIGURE 7.1 What are the time, cost, paid-in minimum capital and number of a business. These scores are the simple procedures to get a local limited liability company up and running? average of the scores for each of the component indicators (figure 7.2). Cost (% of income per capita) Two types of local limited liability Formal operation companies are considered under the starting a business methodology. They Paid-in are identical in all aspects, except that $ Number of minimum capital procedures one company is owned by five married women and the other by five married men. The score for each indicator is the average of the scores obtained for each Entrepreneur of the component indicators for both of Time Preregistration Registration Postregistration (days) these standardized companies. data notes 93 FIGURE 7.2 Starting a business: getting ƒƒ Has a turnover of at least 100 times consequences under the law, such as a local limited liability company up and income per capita. the loss of right to financial mainte- running ƒƒ Has a company deed 10 pages long. nance. Obtaining permissions only Rankings are based on scores The owners: required by one gender for company for four indicators ƒƒ Have reached the legal age of majority registration and operation, or getting 25% Time 25% Cost and are capable of making decisions additional documents only required by Preregistration, As % of income as an adult. If there is no legal age of one gender for a national identification registration and per capita, no majority, they are assumed to be 30 card are considered additional proce- postregistration bribes included (in calendar days) years old. dures. In that case, only procedures 12.5% 12.5% ƒƒ Are sane, competent and in good required for one spouse but not the women men health and have no criminal record. other are counted. Both pre- and postin- 12.5% 12.5% ƒƒ Are married and their marriages are corporation procedures that are officially men women 12.5% 25% monogamous and registered with the required or commonly done in practice women Paid-in authorities. for an entrepreneur to formally operate a minimum 12.5% capital men ƒƒ Where the answer differs according business are recorded (table 7.1). to the legal system applicable to the 25% Paid-in woman or man in question (as may Procedures required for official 25% Procedures minimum capital Procedures are Funds deposited in a be the case in economies where there correspondence or transactions with completed when bank or with a notary is legal plurality), the answer used will public agencies are also included. For final document before registration (or is received up to three months after be the one that applies to the majority example, if a company seal or stamp incorporation), as % is required on official documents, such of income per capita of the population. as tax declarations, obtaining the seal Procedures or stamp is counted. Similarly, if a ƒƒ Operates in the selected location. A procedure is defined as any interaction company must open a bank account ƒƒ Is 100% domestically owned and has of the company founders with external in order to complete any subsequent five owners, none of whom is a legal parties (for example, government agen- procedure—such as registering for entity. cies, lawyers, auditors or notaries) or value added tax or showing proof of ƒƒ Has start-up capital of 10 times spouses (if legally required). Interactions minimum capital deposit—this tran- income per capita. between company founders or company saction is included as a procedure. ƒƒ Performs general industrial or officers and employees are not counted Shortcuts are counted only if they fulfill commercial activities, such as the as procedures. Procedures that must be four criteria: they are legal, they are production or sale to the public of completed in the same building but in available to the general public, they are products or services. The business different offices or at different counters used by the majority of companies, and does not perform foreign trade activi- are counted as separate procedures. If avoiding them causes delays. ties and does not handle products founders have to visit the same office subject to a special tax regime, for several times for different sequential Only procedures required of all busi- example, liquor or tobacco. It is not procedures, each is counted separately. nesses are included. Industry-specific using heavily polluting production The founders are assumed to complete procedures are excluded. For example, processes. all procedures themselves, without procedures to comply with environ- ƒƒ Leases the commercial plant or offices middlemen, facilitators, accountants or mental regulations are included only and is not a proprietor of real estate. lawyers, unless the use of such a third when they apply to all businesses ƒƒ The amount of the annual lease for party is mandated by law or solicited conducting general commercial or the office space is equivalent to one by the majority of entrepreneurs. If the industrial activities. Procedures that income per capita. services of professionals are required, the company undergoes to connect to ƒƒ The size of the entire office space is procedures conducted by such profes- electricity, water, gas or waste disposal approximately 929 square meters sionals on behalf of the company are services are not included in the starting (10,000 square feet). counted as separate procedures. Each a business indicators. ƒƒ Does not qualify for investment incen- electronic procedure is counted as a tives or any special benefits. separate procedure. Approvals from ƒƒ Has at least 10 and up to 50 employees spouses to own a business or leave one month after the commencement the home are considered procedures if of operations, all of them domestic required by law or if by failing to obtain nationals. such approval the spouse will suffer 94 Doing Business in MOzAMBIQUE 2019 Time same day (that is, simultaneous proce- Paid-in minimum capital Time is recorded in calendar days. dures start on consecutive days), again The paid-in minimum capital requi- The measure captures the median with the exception of procedures that rement reflects the amount that the duration that incorporation lawyers can be fully completed online. A regis- entrepreneur needs to deposit in a bank or notaries indicate is necessary in tration process is considered completed or with a third party (for example, a practice to complete a procedure with once the company has received the notary) before registration or up to three minimum follow-up with government final incorporation document or can months after incorporation. It is recorded agencies and no unofficial payments. officially commence business opera- as a percentage of the economy’s It is assumed that the minimum time tions. If a procedure can be accelerated income per capita. The amount is typi- required for each procedure is one legally for an additional cost, the fastest cally specified in the commercial code day, except for procedures that can be procedure is chosen if that option is or the company law. The legal provision fully completed online, for which the more beneficial to the location’s score. needs to be adopted, enforced and fully time required is recorded as half a day. When obtaining a spouse’s approval, it implemented. Any legal limitation of Although procedures may take place is assumed that permission is granted at the company’s operations or decisions simultaneously, they cannot start on the no additional cost unless the permission related to the payment of the minimum needs to be notarized. It is assumed capital requirement is recorded. In case TABLE 7.1 What do the starting that the entrepreneur does not waste the legal minimum capital is provided a business indicators measure? time and commits to completing each per share, it is multiplied by the number remaining procedure without delay. The of shareholders owning the company. Procedures to legally start and formally operate a company (number) time that the entrepreneur spends on Many economies require minimum Preregistration (for example, name verification or gathering information is not measured. capital but allow businesses to pay only reservation, notarization) It is assumed that the entrepreneur is a part of it before registration, with the Registration in the selected location aware of all entry requirements and rest to be paid after the first year of Postregistration (for example, social security their sequence from the beginning but operation. In El Salvador in May 2018, for registration, company seal) has had no prior contact with any of the example, the minimum capital require- Obtaining approval from spouse to start a officials involved. ment was $2,000, of which 5% needed business, to leave the home to register the to be paid before registration. Therefore, company, or to open a bank account Cost the paid-in minimum capital recorded for Obtaining any gender-specific document for company registration and operation, national Cost is recorded as a percentage of the El Salvador is $100, or 2.7% of income identification card or the opening of a bank economy’s income per capita. It includes per capita. account all official fees and fees for legal or Time required to complete each procedure (calendar days) professional services if such services This methodology was developed by are required by law or commonly used Djankov and others (2002) and is adopted Does not include time spent gathering information in practice. Fees for purchasing and here with minor changes. The data details on Each procedure starts on a separate day legalizing company books are included starting a business can be found at http:// (two procedures cannot start on the same day)— if these transactions are required by www.doingbusiness.org. though procedures that can be fully completed online are an exception to this rule law. Although value added tax regis- tration can be counted as a separate Registration process considered completed once final incorporation document is received or procedure, value added tax is not part REGISTering property company can officially start operating of the incorporation cost. The company No prior contact with officials takes place law, the commercial code, and specific Doing Business records the full sequence Cost required to complete each procedure regulations and fee schedules are used of procedures necessary for a business (% of income per capita) as sources for calculating costs. In the (the buyer) to purchase a property from Official costs only, no bribes absence of fee schedules, a government another business (the seller) and to No professional fees unless services required by officer’s estimate is taken as an official transfer the property title to the buyer’s law or commonly used in practice source. In the absence of a government name so that the buyer can use the Paid-in minimum capital (% of income per officer’s estimate, estimates by incor- property for expanding its business, use capita) poration lawyers are used. If several the property as collateral in taking new Funds deposited in a bank or with a notary before registration (or up to three months after incorporation experts provide different loans or, if necessary, sell the property to incorporation) estimates, the median reported value is another business. It also measures the applied. In all cases the cost excludes time and cost to complete each of these bribes. procedures. Doing Business also measures the quality of the land administration data notes 95 FIGURE 7.3 Registering property: information on procedures as well as the land. The warehouse is 10 years old, efficiency and quality of the land time and cost to complete each of them. is in good condition, has no heating administration system system and complies with all safety To make the data comparable across standards, building codes and other Rankings are based on scores for four indicators locations, several assumptions about the legal requirements. The property, parties to the transaction, the property consisting of land and building, will be Days to transfer Cost to transfer property between two property, as % of and the procedures are used. transferred in its entirety. Will not be local companies property value subject to renovations or additional Assumptions about the parties building following the purchase. The parties (buyer and seller): ƒƒ Has no trees, natural water sources, 25% 25% ƒƒ Are limited liability companies (or the Time Cost natural reserves or historical monu- 25% 25% legal equivalent). ments of any kind. Procedures Quality of land ƒƒ Are located in the periurban area of ƒƒ Will not be used for special purposes, administration index the selected location. and no special permits, such as for ƒƒ Are 100% domestically and privately residential use, industrial plants, Steps to transfer Reliability, owned. waste storage or certain types of agri- property so that it transparency and can be sold or used coverage of land ƒƒ Have 50 employees each, all of whom cultural activities, are required. as collateral administration system; are nationals. ƒƒ Has no occupants, and no other party protection against land disputes; equal access Perform general commercial activities. holds a legal interest in it. to property rights Assumptions about the property Procedures system in each economy or location. The property: A procedure is defined as any interaction The quality of land administration index ƒƒ Has a value of 50 times income per of the buyer or the seller, their agents (if has five dimensions: reliability of infras- capita, which equals the sale price. an agent is legally or in practice required) tructure, transparency of information, ƒƒ Is fully owned by the seller. or the property with external parties, geographic coverage, land dispute reso- ƒƒ Has no mortgages attached and has including government agencies, inspec- lution and equal access to property rights. been under the same ownership for tors, notaries and lawyers. Interactions the past 10 years. between company officers and employees The ranking of locations on the ease ƒƒ Is registered in the land registry or are not considered. All procedures that of registering property is determined cadastre, or both, and is free of title are legally or in practice required for by sorting their scores for registering disputes. registering property are recorded, even if property. These scores are the simple ƒƒ Is located in a periurban commercial they may be avoided in exceptional cases average of scores for each of the compo- zone, and no rezoning is required. (table 7.2). If a procedure can be acce- nent indicators (figure 7.3). ƒƒ Consists of land and a building. The lerated legally for an additional cost, the land area is 557.4 square meters fastest procedure is chosen if that option EFFICIENCY OF TRANSFERRING (6,000 square feet). A two-story is more beneficial to the economy’s PROPERTY warehouse of 929 square meters score and if it is used by the majority of As recorded by Doing Business, the (10,000 square feet) is located on the property owners. Although the buyer process of transferring property starts with obtaining the necessary documents, FIGURE 7.4 What are the time, cost and number of procedures required to transfer such as a copy of the seller’s title if property between two local companies? necessary, and conducting due diligence Cost if required. The transaction is considered (% of property value) complete when it is opposable to third Buyer can use parties and when the buyer can use the property, resell it or the property, use it as collateral for a use it as collateral bank loan or resell it (figure 7.4). Every Number of procedures procedure required by law or necessary Land & two-story warehouse in practice is included, whether it is the responsibility of the seller or the buyer Seller with property registered and no or must be completed by a third party title disputes Time on their behalf. Local property lawyers, Preregistration Registration Postregistration (days) notaries and property registries provide 96 Doing Business in MOzAMBIQUE 2019 TABLE 7.2 What do the indicators on of property owners is chosen. If proce- the majority of maps are fully digital; the efficiency of transferring property dures can be undertaken simultaneously, 1 if the majority are scanned; 0 if the measure? it is assumed that they are. It is assumed majority are kept in paper format. that the parties involved are aware of all ƒƒ Whether there is a geographic Procedures to legally transfer title on immovable property (number) requirements and their sequence from information system—an electronic Preregistration procedures (for example, checking the beginning. Time spent on gathering database for recording bounda- for liens, notarizing sales agreement, paying information is not considered. If time ries, checking plans and providing property transfer taxes) estimates differ among sources, the cadastral information. A score of 1 is Registration procedures in the selected location median reported value is used. assigned if yes; 0 if no. Postregistration procedures (for example, filing ƒƒ How the land ownership registry title with municipality) Cost and mapping agency are linked. A Time required to complete each procedure (calendar days) Cost is recorded as a percentage of the score of 1 is assigned if information property value, assumed to be equi- about land ownership and maps are Does not include time spent gathering information valent to 50 times income per capita. kept in a single database or in linked Each procedure starts on a separate day— Only official costs required by law are databases; 0 if there is no connection though procedures that can be fully completed recorded, including fees, transfer taxes, between the different databases. online are an exception to this rule stamp duties and any other payment to ƒƒ How immovable property is identi- Procedure considered completed once final the property registry, notaries, public fied. A score of 1 is assigned if there is document is received agencies or lawyers. Other taxes, such as a unique number to identify property No prior contact with officials capital gains tax or value added tax, are for the majority of land plots; 0 if there Cost required to complete each procedure excluded from the cost measure. Both are multiple identifiers. (% of property value) costs borne by the buyer and those borne Official costs only (such as administrative fees, duties and taxes) by the seller are included. If cost esti- The index ranges from 0 to 8, with Value added tax, capital gains tax and illicit mates differ among sources, the median higher values indicating a higher quality payments are excluded reported value is used. of infrastructure for ensuring the reliabi- lity of information on property titles and may use lawyers or other professionals QUALITY OF LAND boundaries. In Turkey, for example, the where necessary in the registration ADMINISTRATION land registry offices in Istanbul maintain process, it is assumed that the buyer The quality of land administration index titles in a fully digital format (a score of does not employ an outside facilitator in is composed of five other indices: the 2) and have a fully electronic database the registration process unless legally or reliability of infrastructure, transparency to check for encumbrances (a score of in practice required to do so. of information, geographic coverage, 1). The Cadastral Directorate offices in land dispute resolution and equal access Istanbul have digital maps (a score of Time to property rights indices (table 7.3). 2), and the Geographical Information Time is recorded in calendar days. The Data are collected for each of the Directorate has a public portal allowing measure captures the median dura- selected locations. users to check the plans and cadas- tion that property lawyers, notaries or tral information on parcels along with registry officials indicate is necessary Reliability of infrastructure satellite images (a score of 1). Databases to complete a procedure. It is assumed index about land ownership and maps are that the minimum time required for each The reliability of infrastructure index has linked through the TAKBIS system, an procedure is one day, except for proce- six components: integrated information system for the dures that can be fully completed online, ƒƒ How land titles are kept at the registry land registry offices and cadastral offices for which the time required is recorded as of the selected location. A score of 2 (a score of 1). Finally, there is a unique half a day. Although procedures may take is assigned if the majority of land titles identifying number for properties (a place simultaneously, they cannot start are fully digital; 1 if the majority are score of 1). Adding these numbers gives on the same day (again except for proce- scanned; 0 if the majority are kept in Turkey a score of 8 on the reliability of dures that can be fully completed online). paper format. infrastructure index. It is assumed that the buyer does not ƒƒ Whether there is an electronic data- waste time and commits to completing base for checking for encumbrances. Transparency of information each remaining procedure without delay. A score of 1 is assigned if yes; 0 if no. index If a procedure can be accelerated for an ƒƒ How maps of land plots are kept at The transparency of information index additional cost, the fastest legal proce- the mapping agency of the selected has 10 components: dure available and used by the majority location. A score of 2 is assigned if data notes 97 TABLE 7.3 What do the indicators on the quality of land administration measure? in the selected location in the past calendar year; 0 if no such statistics Reliability of infrastructure index (0–8) are made publicly available. Type of system for archiving information on land ownership (0–2) ƒƒ Whether maps of land plots are made Availability of electronic database to check for encumbrances (0–1) publicly available. A score of 0.5 is Type of system for archiving maps (0–2) assigned if maps are accessible by Availability of geographic information system (0–1) anyone; 0 if access is restricted. ƒƒ Whether the fee schedule for acces- Link between property ownership registry and mapping system (0–2) sing maps is made publicly available. Transparency of information index (0–6) A score of 0.5 is assigned if the fee Accessibility of information on land ownership (0–1) schedule is accessible online or on a Accessibility of maps of land plots (0–0.5) public board, free of charge; 0 if it is Publication of fee schedules, lists of registration documents, service standards (0–2.5) not made available to the public or if it Availability of a specific and separate mechanism for complaints (0–1.5) can be obtained only in person. ƒƒ Whether the mapping agency Publication of statistics about the number of property transactions (0–0.5) commits to delivering an updated Geographic coverage index (0–8) map within a specific time frame. A Coverage of land registry at the level of the selected location and the economy (0–4) score of 0.5 is assigned if the service Coverage of mapping agency at the level of the selected location and the economy (0–4) standard is accessible online or on Land dispute resolution index (0–8) a public board; 0 if it is not made Legal framework for immovable property registration (0–2) available to the public or if it can be Mechanisms to prevent and resolve land disputes (0–6) obtained only in person. ƒƒ Whether there is a specific and sepa- Equal access to property rights index (-2–0) rate mechanism for filing complaints Unequal ownership rights to property between unmarried men and women about a problem that occurred at Unequal ownership rights to property between married men and women the mapping agency. A score of Quality of land administration index (0–30) 0.5 is assigned if there is a specific Sum of the reliability of infrastructure, transparency of information, geographic coverage, land dispute and separate mechanism for filing a resolution and equal access to property rights indices complaint; 0 if there is only a general mechanism or no mechanism. ƒƒ Whether information on land owner- commits to delivering a legally ship is made publicly available. A binding document that proves The index ranges from 0 to 6, with higher score of 1 is assigned if information property ownership within a specific values indicating greater transparency in on land ownership is accessible by time frame. A score of 0.5 is assigned the land administration system. In the anyone; 0 if access is restricted. if the service standard is accessible Netherlands, for example, anyone who ƒƒ Whether the list of documents online or on a public board; 0 if it is pays a fee can consult the land owner- required for completing any type of not made available to the public or if it ship database (a score of 1). Information property transaction is made publicly can be obtained only in person. can be obtained at the office, by mail available. A score of 0.5 is assigned ƒƒ Whether there is a specific and sepa- or online using the Kadaster website if the list of documents is accessible rate mechanism for filing complaints (http://www.kadaster.nl). Anyone can online or on a public board; 0 if it is about a problem that occurred at also get information online about the not made available to the public or if it the agency in charge of immovable list of documents to submit for property can be obtained only in person. property registration. A score of 1 registration (a score of 0.5), the fee ƒƒ Whether the fee schedule for comple- is assigned if there is a specific and schedule for registration (a score of ting any type of property transaction separate mechanism for filing a 0.5) and the service standards (a score is made publicly available. A score of complaint; 0 if there is only a general of 0.5). And anyone facing a problem 0.5 is assigned if the fee schedule is mechanism or no mechanism. at the land registry can file a complaint accessible online or on a public board, ƒƒ Whether there are publicly available or report an error by filling in a specific free of charge; 0 if it is not made official statistics tracking the number form online (a score of 1). In addition, available to the public or if it can be of transactions at the immovable the Kadaster makes statistics about obtained only in person. property registration agency. A score land transactions available to the public, ƒƒ Whether the agency in charge of of 0.5 is assigned if statistics are reporting a total of 39,849 property immovable property registration published about property transfers transfers in Amsterdam in 2017 (a score 98 Doing Business in MOzAMBIQUE 2019 of 0.5). Moreover, anyone who pays a Land dispute resolution index over tenure rights worth 50 times fee can consult online cadastral maps The land dispute resolution index income per capita and located in (a score of 0.5). It is also possible to get assesses the legal framework for the selected location. A score of 3 is public access to the fee schedule for map immovable property registration and assigned if it takes less than one year; consultation (a score of 0.5), the service the accessibility of dispute resolution 2 if it takes between one and two standards for delivery of an updated plan mechanisms. The index has eight years; 1 if it takes between two and (a score of 0.5) and a specific mecha- components: three years; 0 if it takes more than nism for filing a complaint about a map ƒƒ Whether the law requires that all three years. (a score of 0.5). Adding these numbers property sale transactions be regis- ƒƒ Whether there are publicly avail- gives the Netherlands a score of 6 on the tered at the immovable property able statistics on the number of land transparency of information index. registry to make them opposable to disputes in the first instance. A score third parties. A score of 1.5 is assigned of 0.5 is assigned if statistics are Geographic coverage index if yes; 0 if no. published about land disputes in the The geographic coverage index has four ƒƒ Whether the formal system of economy in the past calendar year; 0 components: immovable property registration is if no such statistics are made publicly ƒƒ How complete the coverage of the subject to a guarantee. A score of 0.5 available. land registry is at the level of the is assigned if either a state or a private selected location. A score of 2 is guarantee over immovable property The index ranges from 0 to 8, with assigned if all privately held land plots registration is required by law; 0 if no higher values indicating greater protec- in the location are formally registered such guarantee is required. tion against land disputes. In the United at the land registry; 0 if not. ƒƒ Whether there is a specific compen- Kingdom, for example, according to the ƒƒ How complete the coverage of the sation mechanism to cover for losses Land Registration Act 2002 property land registry is at the level of the incurred by parties who engaged transactions must be registered at the economy. A score of 2 is assigned in good faith in a property transac- land registry to make them opposable if all privately held land plots in the tion based on erroneous information to third parties (a score of 1.5). The economy are formally registered at certified by the immovable property property transfer system is guaranteed the land registry; 0 if not. registry. A score of 0.5 is assigned if by the state (a score of 0.5) and has ƒƒ How complete the coverage of the yes; 0 if no. a compensation mechanism to cover mapping agency is at the level of ƒƒ Whether the legal system requires losses incurred by parties who engaged the selected location. A score of 2 is verification of the legal validity of the in good faith in a property transaction assigned if all privately held land plots documents necessary for a property based on an error by the registry (a score in the location are mapped; 0 if not. transaction. A score of 0.5 is assigned of 0.5). In accordance with the Proceeds ƒƒ How complete the coverage of the if there is a review of legal validity, of Crime Act 2002 and the Money mapping agency is at the level of the either by the registrar or by a profes- Laundering Regulations 2007, a lawyer economy. A score of 2 is assigned sional (such as a notary or lawyer); 0 verifies the legal validity of the docu- if all privately held land plots in the if there is no review. ments in a property transaction (a score economy are mapped; 0 if not. ƒƒ Whether the legal system requires of 0.5) and the identity of the parties verification of the identity of the (a score of 0.5). The United Kingdom The index ranges from 0 to 8, with higher parties to a property transaction. has a national database to verify the values indicating greater geographic A score of 0.5 is assigned if there is accuracy of identity documents (a coverage in land ownership registration verification of identity, either by the score of 1). In a land dispute between and cadastral mapping. In Japan, for registrar or by a professional (such two British companies over the tenure example, all privately held land plots are as a notary or lawyer); 0 if there is no rights of a property worth $2,026,500, formally registered at the land registry verification. the Land Registration division of the in Tokyo and Osaka (a score of 2) and ƒƒ Whether there is a national database Property Chamber (First-tier Tribunal) the economy as a whole (a score of 2). to verify the accuracy of identity gives a decision in less than one year (a Also, all privately held land plots are documents. A score of 1 is assigned if score of 3). Finally, statistics about land mapped in both cities (a score of 2) and such a national database is available; disputes are collected and published; the economy as a whole (a score of 2). 0 if not. there were a total of 1,154 land disputes Adding these numbers gives Japan a ƒƒ How much time it takes to obtain a in the country in 2017 (a score of 0.5). score of 8 on the geographic coverage decision from a court of first instance Adding these numbers gives the United index. (without appeal) in a standard land Kingdom a score of 8 on the land dispute dispute between two local businesses resolution index. data notes 99 Equal access to property rights Quality of land administration TABLE 7.4 What do the indicators on index index the efficiency of resolving a commercial The equal access to property rights The quality of land administration index dispute measure? index has two components: is the sum of the scores on the reliabi- Time required to enforce a contract through ƒƒ Whether unmarried men and unmar- lity of infrastructure, transparency of the courts (calendar days) ried women have equal ownership information, geographic coverage, land Time to file and serve the case rights to property. A score of −1 is dispute resolution and equal access Time for trial and to obtain the judgment assigned if there are unequal owner- to property rights indices. The index Time to enforce the judgment ship rights to property; 0 if there is ranges from 0 to 30, with higher values Cost required to enforce a contract through equality. indicating better quality of the land the courts (% of claim) ƒƒ Whether married men and married administration system. Average attorney fees women have equal ownership rights Court costs to property. A score of −1 is assigned If private sector entities were unable if there are unequal ownership rights to register property transfers in an Enforcement costs to property; 0 if there is equality. economy between June 2017 and May 2018, the economy receives a “no The data are collected for a specific court Ownership rights cover the ability to practice” mark on the procedures, time for each location covered, under the manage, control, administer, access, and cost indicators. A “no practice” assumptions about the case described encumber, receive, dispose of and economy receives a score of 0 on the below. The court is the one with juris- transfer property. Each restriction is quality of land administration index even diction over disputes worth 200% of considered if there is a differential treat- if its legal framework includes provisions income per capita or $5,000, whichever ment for men and women in the law related to land administration. is greater. Whenever more than one considering the default marital property court has original jurisdiction over a case regime. For customary land systems, The data details on registering property can comparable to the standardized case equality is assumed unless there is a be found at http://www.doingbusiness.org. study, the data are collected based on general legal provision stating a diffe- the court that would be used by litigants rential treatment. in the majority of cases. The name of enforcing contracts the relevant court in each economy is The index ranges from −2 to 0, with published on the Doing Business website higher values indicating greater inclu- Doing Business measures the time and at http://www.doingbusiness.org/data/ siveness of property rights. In Mali, for cost for resolving a commercial dispute exploretopics/enforcing-contracts. example, unmarried men and unmarried through a local first-instance court (table women have equal ownership rights 7.4) and the quality of judicial processes to property (a score of 0). Similarly, index, evaluating whether each economy married men and married women can or location has adopted a series of use their property in the same way (a good practices that promote quality FIGURE 7.5 Enforcing contracts: score of 0). Adding these numbers gives and efficiency in the court system. The efficiency and quality of commercial Mali a score of 0 on the equal access to data are collected through study of the dispute resolution property rights index—which indicates codes of civil procedure and other court Rankings are based on scores equal property rights between men and regulations as well as questionnaires for three indicators women. Conversely, in Tonga, according completed by local litigation lawyers and to the Land Act [Cap 132], sections 7, 45 judges. The ranking of economies on the Days to resolve Attorney, court and a commercial dispute enforcement costs, and 82, unmarried men and unmarried ease of enforcing contracts is determined through the courts as % of claim value women do not have equal ownership by sorting their scores for enforcing rights to property (a score of −1), and contracts. These scores are the simple 33.3% 33.3% married men and married women are average of the scores for each of the Time Cost not permitted to use their property in component indicators (figure 7.5). 33.3% the same way (a score of −1). Adding Quality of judicial these numbers gives Tonga a score EFFICIENCY OF RESOLVING A processes index of −2 on the equal access to property COMMERCIAL DISPUTE rights index—which indicates unequal The data on time and cost are built by Use of good practices promoting property rights between men and following the step-by-step evolution of quality and efficiency women. a commercial sale dispute (figure 7.6). 100 Doing Business in MOzAMBIQUE 2019 FIGURE 7.6 What are the time and quality of the goods was not adequate. The filing and service phase includes the cost to resolve a commercial dispute Because the court cannot decide the following: through a local first-instance court? case on the basis of documentary ƒƒ The time for Seller to try to obtain evidence or legal title alone, an expert payment out of court through a non- Court opinion is given on the quality of the litigious demand letter, including the goods. If it is standard practice in the time to prepare the letter and the economy for each party to call its own deadline provided to Buyer to comply. Time expert witness, the parties each call ƒƒ The time necessary for a local lawyer Cost one expert witness. If it is standard to write the initial complaint and practice for the judge to appoint an gather all supporting documents Company A Company B independent expert, the judge does needed for filing, including authenti- (Seller & Commercial (Buyer & plaintiff) dispute defendant) so. In this case the judge does not cating or notarizing them if required. allow opposing expert testimony. ƒƒ The time necessary to file the Filing & Trial & Enforcement service judgment ƒƒ Following the expert opinion, the complaint at the court. judge decides that the goods deliv- ƒƒ The time necessary for Buyer (defen- ered by Seller were of adequate dant) to be served, including the quality and that Buyer must pay the processing time at the court and the contract price. The judge thus renders waiting periods between unsuccessful Assumptions about the case a final judgment that is 100% in favor attempts to serve Buyer, if more than ƒƒ The value of the claim is equal to of Seller. one attempt is usually required. 200% of the economy’s income per ƒƒ Buyer does not appeal the judgment. capita or $5,000, whichever is greater. Seller decides to start enforcing the The trial and judgment phase includes ƒƒ The dispute concerns a lawful trans- judgment as soon as the time allo- the following action between two businesses cated by law for appeal lapses. ƒƒ The time between the moment a (Seller and Buyer), both located in the ƒƒ Seller takes all required steps for notice of the case is served on Buyer selected city. Pursuant to a contract prompt enforcement of the judg- and the moment a pretrial conference between the businesses, Seller sells ment. The money is successfully is held, if a pretrial conference is part some custom-made furniture to collected through a public sale of of the case management techniques Buyer worth 200% of the economy’s Buyer’s movable assets (for example, used by the competent court. income per capita or $5,000, which- office equipment and vehicles). It is ƒƒ The time between the pre-trial ever is greater. After Seller delivers assumed that Buyer has no money conference and the first hearing, if the goods to Buyer, Buyer refuses to in its bank account, making it impos- a pre-trial conference is part of the pay the contract price, alleging that sible for the judgment to be enforced case management techniques used the goods are not of adequate quality. through a seizure of Buyer’s account. by the competent court. If not, the Because they were custom-made, time between the moment a notice Seller is unable to sell them to anyone Time of the case is served on Buyer and the else. Time is recorded in calendar days, moment the first hearing is held. ƒƒ Seller (the plaintiff) sues Buyer (the counted from the moment Seller decides ƒƒ The time to conduct all trial activities, defendant) to recover the amount to file the lawsuit in court until payment. including exchanges of briefs and under the sales agreement. The This includes both the days when actions evidence, multiple hearings, waiting dispute is brought before the court take place and the waiting periods in times in between hearings and the located in the selected location with between. The average duration of the obtaining of an expert opinion. jurisdiction over commercial cases following three stages of dispute reso- ƒƒ The time necessary for the judge to worth 200% of income per capita or lution is recorded: (i) filing and service; issue a written final judgment once $5,000, whichever is greater. (ii) trial and judgment; and (iii) enforce- the evidence period has closed. ƒƒ At the outset of the dispute, Seller ment. Time is recorded considering the ƒƒ The time limit for appeal. decides to attach Buyer’s movable case study assumptions detailed above assets (for example, office equipment and only as applicable to the competent The enforcement phase includes the and vehicles) because Seller fears that court. Time is recorded in practice, regar- following: Buyer may hide its assets or otherwise dless of time limits set by law if such time ƒƒ The time it takes to obtain an enforce- become insolvent. limits are not respected in the majority of able copy of the judgment and contact ƒƒ The claim is disputed on the merits cases. the relevant enforcement office. because of Buyer’s allegation that the data notes 101 ƒƒ The time it takes to locate, identify, court automation and alternative dispute TABLE 7.5 What do the indicators seize and transport Buyer’s (losing resolution (table 7.5). on the quality of judicial processes party) movable assets (including the measure? time necessary to obtain an order Court structure and proceedings Court structure and proceedings index (-1–5) from the court to attach and seize the index Availability of specialized commercial court, assets, if applicable). The court structure and proceedings division or section (0–1.5) ƒƒ The time it takes to advertise, orga- index has five components: Availability of small claims court or simplified nize and hold the auction. If more ƒƒ SWhether a specialized commercial procedure for small claims (0–1.5) than one auction is usually required court or a section dedicated solely to Availability of pretrial attachment (0–1) to fully recover the value of the claim hearing commercial cases is in place. Criteria used to assign cases to judges (0–1) in a case comparable to the standard- A score of 1.5 is assigned if yes; 0 if no. Evidentiary weight of a woman’s testimony (-1-0) ized case, the time between multiple ƒƒ Whether a small claims court or a Case management index (0–6) auction attempts is recorded. fast-track procedure for small claims ƒƒ The time it takes for Seller (winning is in place. A score of 1 is assigned if Regulations setting time standards for key court events (0–1) party) to fully recover the value of the such a court or procedure is in place, Regulations on adjournments or continuances (0–1) claim once the auction is successfully it is applicable to all civil cases and the completed. law sets a cap on the value of cases Availability of performance measurement reports (0–1) that can be handled through this Availability of pretrial conference (0–1) Cost court or procedure. If small claims are handled by a stand-alone court, Availability of electronic case management Cost is recorded as a percentage of system for judges (0–1) the claim, assumed to be equivalent to the point is assigned only if this court Availability of electronic case management 200% of income per capita or $5,000, applies a simplified procedure. An system for lawyers (0–1) whichever is greater. Three types of additional score of 0.5 is assigned Court automation index (0–4) costs are recorded: average attorney if parties can represent themselves Ability to file initial complaint electronically (0–1) fees, court costs and enforcement before this court or during this Ability to serve initial complaint electronically costs. procedure. If no small claims court (0–1) or simplified procedure is in place, a Ability to pay court fees electronically (0–1) Average attorney fees are the fees score of 0 is assigned. Publication of judgments (0–1) that Seller (plaintiff) must advance ƒƒ Whether plaintiffs can obtain pretrial to a local attorney to represent Seller attachment of the defendant’s Alternative dispute resolution index (0–3) in the standardized case, regardless movable assets if they fear that the Arbitration (0–1.5) of final reimbursement. Court costs assets may be moved out of the Voluntary mediation or conciliation (0–1.5) include all costs that Seller (plaintiff) jurisdiction or otherwise dissipated. Quality of judicial processes index (0–18) must advance to the court, regardless A score of 1 is assigned if yes; 0 if no. Sum of the court structure and proceedings, case of the final cost borne by Seller. Court ƒƒ Whether cases are assigned randomly management, court automation and alternative dispute resolution indices costs include the fees that must be paid and automatically to judges throu- to obtain an expert opinion, regardless ghout the competent court. A score of whether they are paid to the court of 1 is assigned if the assignment of and Herzegovina, for example, a specia- or to the expert directly. Enforcement cases is random and automated; 0.5 lized commercial court is in place (a score costs are all costs that Seller (plaintiff) if it is random but not automated; 0 of 1.5), and small claims can be resolved must advance to enforce the judg- if it is neither random nor automated. through a dedicated court in which self- ment through a public sale of Buyer’s ƒƒ Whether a woman’s testimony carries -representation is allowed (a score of 1.5). movable assets, regardless of the final the same evidentiary weight in court Plaintiffs can obtain pretrial attachment cost borne by Seller. Bribes are not as a man’s. A score of −1 is assigned of the defendant’s movable assets if they taken into account. if the law differentiates between the fear dissipation during trial (a score of 1). evidentiary value of a woman’s testi- Cases are assigned randomly through an QUALITY OF JUDICIAL mony and that of a man’s testimony in electronic case management system (a PROCESSES any type of civil case, including family score of 1). A woman’s testimony carries The quality of judicial processes index cases; 0 if it does not. the same evidentiary weight in court measures whether each location has as a man’s (a score of 0). Adding these adopted a series of good practices in its The index ranges from -1 to 5, with higher numbers gives Bosnia and Herzegovina court system in four areas: court struc- values indicating a more sophisticated a score of 5 on the court structure and ture and proceedings, case management, and streamlined court structure. In Bosnia proceedings index. 102 Doing Business in MOzAMBIQUE 2019 Case management index A score of 0 is assigned if only one of and decisions in a particular case. A The case management index has six these reports is available or if none are. score of 1 is assigned if an electronic components: ƒƒ Whether a pretrial conference case management system is available ƒƒ Whether any of the applicable laws or is among the case management that lawyers can use for at least four regulations on civil procedure contain techniques used before the compe- of these purposes; 0 if not. time standards for at least three of the tent court and at least three of the following key court events: (i) service following issues are discussed during The index ranges from 0 to 6, with of process; (ii) first hearing; (iii) filing the pretrial conference: (i) scheduling higher values indicating a higher-quality of the statement of defense; (iv) (including the time frame for filing and more efficient case management completion of the evidence period; motions and other documents with system. In Australia, for example, time (v) filing of testimony by expert; and the court); (ii) case complexity and standards for at least three key court (vi) submission of the final judgment. projected length of trial; (iii) possibility events are established in applicable A score of 1 is assigned if such time of settlement or alternative dispute civil procedure instruments and are standards are available and respected resolution; (iv) exchange of witness respected in more than 50% of cases in more than 50% of cases; 0.5 if they lists; (v) evidence; (vi) jurisdiction and (a score of 1). The law stipulates that are available but not respected in other procedural issues; and (vii) the adjournments can be granted only for more than 50% of cases; 0 if there are narrowing down of contentious issues. unforeseen and exceptional circums- time standards for less than three of A score of 1 is assigned if a pretrial tances, and this rule is respected in more these key court events. conference in which at least three than 50% of cases (a score of 0.5). A ƒƒ Whether there are any laws regulating of these events are discussed is held time to disposition report, a clearance the maximum number of adjourn- within the competent court; 0 if not. rate report and an age of pending ments or continuances that can ƒƒ Whether judges within the compe- cases report can be generated about be granted, whether adjournments tent court can use an electronic case the competent court (a score of 1). A are limited by law to unforeseen management system for at least pretrial conference is among the case and exceptional circumstances and four of the following purposes: (i) to management techniques used before whether these rules are respected access laws, regulations and case the District Court of New South Wales in more than 50% of cases. A score law; (ii) to automatically generate a (a score of 1). An electronic case mana- of 1 is assigned if all three conditions hearing schedule for all cases on their gement system satisfying the criteria are met; 0.5 if only two of the three docket; (iii) to send notifications (for outlined above is available to judges (a conditions are met; 0 if only one of the example, e-mails) to lawyers; (iv) score of 1) and to lawyers (a score of 1). conditions is met or if none are. to track the status of a case on their Adding these numbers gives Australia ƒƒ Whether there are any performance docket; (v) to view and manage case a score of 5.5 on the case management measurement reports that can be documents (briefs, motions); (vi) to index, the highest score attained by any generated about the competent court assist in writing judgments; (vii) to economy on this index. to monitor the court’s performance, semi-automatically generate court to track the progress of cases through orders; and (viii) to view court orders Court automation index the court and to ensure compliance and judgments in a particular case. A The court automation index has four with established time standards. A score of 1 is assigned if an electronic components: score of 1 is assigned if at least two case management system is available ƒƒ Whether the initial complaint can be of the following four reports are made that judges can use for at least four of filed electronically through a dedi- publicly available: (i) time to disposi- these purposes; 0 if not. cated platform (not e-mail or fax) tion report (measuring the time the ƒƒ Whether lawyers can use an elec- within the relevant court. A score court takes to dispose or adjudicate tronic case management system for of 1 is assigned if such a platform is its cases); (ii) clearance rate report at least four of the following purposes: available and litigants are not required (measuring the number of cases (i) to access laws, regulations and to follow up with a hard copy of the resolved relative to the number of case law; (ii) to access forms to complaint; 0 if not. Electronic filing incoming cases); (iii) age of pending be submitted to the court; (iii) to is acknowledged regardless of the cases report (providing a snapshot receive notifications (for example, percentage of users, as long as no of all pending cases according to e-mails); (iv) to track the status of a additional in-person interactions are case type, case age, last action held case; (v) to view and manage case required and local experts have used and next action scheduled); and (iv) documents (briefs, motions); (vi) to it enough to be able to confirm that it single case progress report (providing file briefs and documents with the is fully functional. a snapshot of the status of one case). court; and (vii) to view court orders data notes 103 ƒƒ Whether the initial complaint can electronically (a score of 1), and court resolution. In Israel, for example, arbi- be served on the defendant electro- fees can be paid electronically as well tration is regulated through a dedicated nically, through a dedicated system (a score of 1). In addition, judgments in statute (a score of 0.5), all relevant or by e-mail, fax or SMS (short commercial cases at all levels are made commercial disputes can be submitted message service) for cases filed publicly available through the internet (a to arbitration (a score of 0.5), and valid before the competent court. A score score of 1). Adding these numbers gives arbitration clauses are usually enforced of 1 is assigned if electronic service Estonia a score of 4 on the court auto- by the courts (a score of 0.5). Voluntary is available and no further service of mation index. mediation is a recognized way of resol- process is required; 0 if not. Electronic ving commercial disputes (a score of service is acknowledged regardless of Alternative dispute resolution 0.5), it is regulated through a dedicated the percentage of users, as long as no index statute (a score of 0.5), and part of the additional in-person interactions are The alternative dispute resolution index filing fees is reimbursed if the process is required and local experts have used has six components: successful (a score of 0.5). Adding these it enough to be able to confirm that it ƒƒ Whether domestic commercial arbi- numbers gives Israel a score of 3 on the is fully functional. tration is governed by a consolidated alternative dispute resolution index. ƒƒ Whether court fees can be paid elec- law or consolidated chapter or section tronically for cases filed before the of the applicable code of civil proce- Quality of judicial processes competent court, either through a dure encompassing substantially all index dedicated platform or through online its aspects. A score of 0.5 is assigned The quality of judicial processes banking. A score of 1 is assigned if fees if yes; 0 if no. index is the sum of the scores on the can be paid electronically and litigants ƒƒ Whether commercial disputes of all court structure and proceedings, case are not required to follow up with a kinds—aside from those dealing with management, court automation and hard copy of the receipt or produce a public order, public policy, bankruptcy, alternative dispute resolution indices. stamped copy of the receipt; 0 if not. consumer rights, employment issues The index ranges from 0 to 18, with Electronic payment is acknowledged or intellectual property—can be higher values indicating better and more regardless of the percentage of users, submitted to arbitration. A score of efficient judicial processes. as long as no additional in-person 0.5 is assigned if yes; 0 if no. interactions are required and local ƒƒ Whether valid arbitration clauses The data details on enforcing contracts experts have used it enough to be able or agreements are enforced by local can be found for each economy at http:// to confirm that it is fully functional. courts in more than 50% of cases. A www.doingbusiness.org. This methodology ƒƒ Whether judgments rendered by score of 0.5 is assigned if yes; 0 if no. was initially developed by Simeon Djankov, local courts are made available to the ƒƒ Whether voluntary mediation, concil- Rafael La Porta, Florencio López-de-Silanes general public through publication in iation or both are a recognized way and Andrei Shleifer (“Courts,” Quarterly official gazettes, in newspapers or on of resolving commercial disputes. A Journal of Economics 118, no. 2 [2003]: the internet. A score of 1 is assigned score of 0.5 is assigned if yes; 0 if no. 453–517) and is adopted here with several if judgments rendered in commercial ƒƒ Whether voluntary mediation, changes. The quality of judicial processes cases at all levels are made available conciliation or both are governed by index was introduced in Doing Business to the general public; 0.5 if only judg- a consolidated law or consolidated 2016. The good practices tested in this index ments rendered at the appeal and chapter or section of the applicable were developed on the basis of internatio- supreme court level are made available code of civil procedure encompassing nally recognized good practices promoting to the general public; 0 in all other substantially all their aspects. A score judicial efficiency. instances. No points are awarded if of 0.5 is assigned if yes; 0 if no. judgments need to be individually ƒƒ Whether there are any financial incen- requested from the court or if the case tives for parties to attempt mediation TRADING ACROSS BORDERS number or parties’ details are required or conciliation (for example, if media- in order to obtain a copy of a judgment. tion or conciliation is successful, a Doing Business records the time and cost refund of court filing fees, an income associated with the logistical process The index ranges from 0 to 4, with higher tax credit or the like). A score of 0.5 is of exporting and importing goods. values indicating a more automated, assigned if yes; 0 if no. Doing Business measures the time and efficient and transparent court system. cost (excluding tariffs) associated with In Estonia, for example, the initial The index ranges from 0 to 3, with higher three sets of procedures—documentary summons can be filed online (a score values associated with greater availability compliance, border compliance and of 1), it can be served on the defendant of mechanisms of alternative dispute domestic transport—within the overall 104 Doing Business in MOzAMBIQUE 2019 process of exporting or importing a FIGURE 7.7 What makes up the time and cost to export to an overseas trading partner? shipment of goods. Figure 7.7, using the example of Brazil (as exporter) and China (as importer), shows the process of exporting a shipment from a warehouse São Paulo Domestic transport: 8.6 hours, $763 in the origin economy to a warehouse in an overseas trading partner through Border compliance: 49 hours, $862 China a port. Figure 7.8, using the example of Kenya (as exporter) and Uganda (as Documentary compliance: 12 hours, $226 importer), shows the process of expor- ting a shipment from a warehouse in Source: Doing Business database. the origin economy to a warehouse in a regional trading partner through a land border. The ranking of economies or FIGURE 7.8 What makes up the time and cost to export to a regional trading partner? trade locations on the ease of trading across borders is determined by sorting their scores for trading across borders. Nairobi I II I These scores are the simple average Domestic transport: 9 hours, $967 II I of the scores for the time and cost for I II documentary compliance and border Border compliance: 15.5 hours, $143 Kampala compliance to export and import (figure Documentary compliance: 19 hours, $191 7.9). Although Doing Business collects and Source: Doing Business database. publishes data on the time and cost for domestic transport, it does not use these of 0 for all the trading across borders value (price times quantity) of auto data in calculating the score for trading indicators. parts. across borders or the ranking on the ƒƒ With the exception of Maputo, it is ease of trading across borders. The main Assumptions of the case study assumed that each port or border reason for this is that the time and cost for To make the data comparable across crossing exports the product of its domestic transport are affected by many locations, several assumptions are comparative advantage (defined by external factors—such as the geography made about the traded goods and the the largest export value) to its natural and topography of the transit territory, transactions: export partner—the economy that is road capacity and general infrastructure, ƒƒ For each of the locations covered by the largest purchaser of this product proximity to the nearest port or border, Doing Business in Mozambique 2019, For Maputo, the export case study in and the location of warehouses where it is assumed that a shipment is Doing Business in Mozambique 2019 the traded goods are stored—and so are located at a warehouse in the closest assumes an export of the second not directly influenced by an economy’s main business city of the exporting most exported product HS 17 (Sugars trade policies and reforms. economy (Beira, Maputo, Nacala, and and sugar confectionery) to Portugal. Ressano Garcia for border crossing) Maputo’s most exported product HS The data on trading across borders and travels to a warehouse in the 76 (Aluminum and articles thereof) are gathered through a questionnaire largest business city of the importing to the Netherlands is assessed by administered to local freight forwarders, economy (Mumbai, Lisbon, Mumbai the annual Doing Business report. The customs brokers, port authorities and and Johannesburg respectively). product of comparative advantage traders. ƒƒ The import and export case studies for Mozambique as a whole is HS 76 assume different traded products. It (Aluminum and articles thereof), and If an economy has no formal, large-scale, is assumed that each port or border Maputo port is the main port in the private sector cross-border trade taking crossing imports a standardized country exporting this commodity to place as a result of government restric- shipment of 15 metric tons of contain- the Netherlands. Precious metal and tions armed conflict or a natural disaster, erized auto parts (HS 8708) from its gems, mineral fuels, oil products, live it is considered a “no practice” economy. natural import partner—the economy animals, residues and waste of foods A “no practice” economy receives a score from which it imports the largest and products as well as pharmaceu- ticals are excluded from the list of data notes 105 FIGURE 7.9 Trading across borders: TABLE 7.6 What do the indicators on the time and cost to export and import cover? time and cost to export and import Documentary compliance Rankings are based on scores Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border for eight indicators handling in origin economy Obtaining, preparing and submitting documents required by destination economy and any transit economies Time for documentary Cost for documentary compliance and border compliance and border Covers all documents required by law and in practice, including electronic submissions of information as compliance when compliance when well as non-shipment-specific documents necessary to complete the trade exporting the product exporting the product of comparative of comparative Border compliance advantage advantage Customs clearance and inspections by customs Inspections by other agencies (if applied to more than 10% of shipments) 25% 25% Port or border handling at most widely used port or border of economy Time Cost to export to export Domestic transport 25% 25% Time Cost Loading and unloading of shipment at warehouse, dry port or border to import to import Transport by most widely used mode between warehouse and terminal or dry port Transport by most widely used mode between terminal or dry port and most widely used border or port Time for documentary Cost for documentary compliance and border compliance and border Traffic delays and road police checks while shipment is en route compliance when compliance when importing auto parts importing auto parts obtained, prepared and submitted reported in U.S. dollars. Contributors possible export products, however, during the export or import process. are asked to convert local currency into and in these cases the second largest ƒƒ A port or border is defined as a place U.S. dollars based on the exchange rate product category is considered as (seaport or land border crossing) prevailing on the day they answer the needed.1 where merchandise can enter or leave questionnaire. Contributors are private ƒƒ A shipment is a unit of trade. Export an economy. sector experts in international trade logis- shipments do not necessarily need to ƒƒ Government agencies consid- tics and are informed about exchange be containerized, while import ship- ered relevant are agencies such as rates and their movements. ments of auto parts are assumed to customs, port authorities, road police, be containerized. border guards, standardization agen- Documentary compliance ƒƒ If fees are determined by the value of cies, ministries or departments of Documentary compliance captures the the shipment, the value is assumed to agriculture or industry, national secu- time and cost associated with compliance be $50,000. rity agencies, central banks and any with the documentary requirements of ƒƒ The product is new, not secondhand other government authorities. all government agencies of the origin or used merchandise. economy, the destination economy and ƒƒ The exporting/importing firm hires Time any transit economies (table 7.6). The and pays for a freight forwarder or Time is measured in hours, and 1 day aim is to measure the total burden of customs broker (or both) and pays for is 24 hours (for example, 22 days are preparing the bundle of documents that all costs related to domestic transport, recorded as 22 × 24 = 528 hours). If will enable completion of the interna- clearance and mandatory inspections customs clearance takes 7.5 hours, the tional trade for the product and partner by customs and other agencies, port data are recorded as is. Alternatively, pair assumed in the case study. As a ship- or border handling, documentary suppose that documents are submitted ment moves from Mumbai to New York compliance fees and the like. to a customs agency at 8:00 a.m., are City, for example, the freight forwarder ƒƒ The mode of transport is the one most processed overnight and can be picked must prepare and submit documents widely used for the chosen export up at 8:00 a.m. the next day. In this case to the customs agency in India, to the or import product and the trading the time for customs clearance would be port authorities in Mumbai and to the partner, as is the seaport or land recorded as 24 hours because the actual customs agency in the United States. border crossing. procedure took 24 hours. ƒƒ All electronic submissions of informa- The time and cost for documentary tion requested by any government Cost compliance include the time and cost agency in connection with the ship- Insurance cost and informal payments for for obtaining documents (such as time ment are considered to be documents which no receipt is issued are excluded spent to get the document issued and from the costs recorded. Costs are stamped); preparing documents (such 106 Doing Business in MOzAMBIQUE 2019 as time spent gathering information to Border compliance and checking the veracity of other infor- complete the customs declaration or Border compliance captures the time and mation on the customs declaration. (This certificate of origin); processing docu- cost associated with compliance with category includes all inspections aimed at ments (such as time spent waiting for the the economy’s customs regulations and preventing smuggling.) These are clea- relevant authority to issue a phytosani- with regulations relating to other inspec- rance and inspection procedures that take tary certificate); presenting documents tions that are mandatory in order for the place in the majority of cases and thus are (such as time spent showing a port shipment to cross the economy’s border, considered the “standard” case. The time terminal receipt to port authorities); and as well as the time and cost for handling and cost estimates capture the efficiency submitting documents (such as time that takes place at its port or border. The of the customs agency of the economy. spent submitting a customs declaration time and cost for this segment include to the customs agency in person or time and cost for customs clearance Doing Business also asks contributors to electronically). and inspection procedures conducted estimate the total time and cost for clea- by other agencies. For example, the time rance and inspections by customs and all All electronic or paper submissions of and cost for conducting a phytosanitary other agencies for the specified product. information requested by any gover- inspection would be included here. These estimates account for inspections nment agency in connection with the related to health, safety, phytosanitary shipment are considered to be docu- The computation of border compliance standards, conformity and the like, and ments obtained, prepared and submitted time and cost depends on where the thus capture the efficiency of agencies during the export or import process. border compliance procedures take that require and conduct these additional All documents prepared by the freight place, who requires and conducts the inspections. forwarder or customs broker for the procedures and what the probability is product and partner pair assumed in that inspections will be conducted. If all If inspections by agencies other than the case study are included regardless customs clearance and other inspections customs are conducted in 20% or fewer of whether they are required by law or take place at the port or border at the cases, the border compliance time and in practice. Any documents prepared same time, the time estimate for border cost measures take into account only and submitted so as to get access to compliance takes this simultaneity into clearance and inspections by customs preferential treatment—for example, a account. It is entirely possible that the (the standard case). If inspections certificate of origin—are included in the border compliance time and cost could by other agencies take place in more calculation of the time and cost for docu- be negligible or zero, as in the case of than 20% of cases, the time and cost mentary compliance. Any documents trade between members of the European measures account for clearance and prepared and submitted because of a Union or other customs unions. inspections by all agencies. Different perception that they ease the passage types of inspections may take place with of the shipment are also included (for If some or all customs or other inspec- different probabilities—for example, example, freight forwarders may prepare tions take place at other locations, the scanning may take place in 100% of a packing list because in their experience time and cost for these procedures are cases while physical inspection occurs in this reduces the probability of physical or added to the time and cost for those 5% of cases. In situations like this, Doing other intrusive inspections). that take place at the port or border. In Business would count the time only for Kazakhstan, for example, all customs scanning because it happens in more than In addition, any documents that are clearance and inspections take place at 20% of cases while physical inspection mandatory for exporting or importing a customs post in Almaty that is not at does not. The border compliance time are included in the calculation of time the land border between Kazakhstan and and cost for an economy do not include and cost. Documents that need to be China. In this case border compliance the time and cost for compliance with the obtained only once are not counted, time is the sum of the time spent at the regulations of any other economy. however. And Doing Business does not terminal in Almaty and the handling time include documents needed to produce at the border. Domestic transport and sell in the domestic market—such Domestic transport captures the time as certificates of third-party safety stan- Doing Business asks contributors to esti- and cost associated with transporting dards testing that may be required to sell mate the time and cost for clearance the shipment from a warehouse in the toys domestically—unless a government and inspections by customs agencies— location measured to the seaport or land agency needs to see these documents defined as documentary and physical border (if applicable). This set of proce- during the export process. inspections for the purpose of calculating dures captures the time for (and cost of) duties by verifying product classification, the actual transport; any traffic delays and confirming quantity, determining origin road police checks; as well as time spent data notes 107 loading or unloading at the warehouse The data details on trading across borders NOTE or border. For a coastal economy with an can be found for each economy at http:// overseas trading partner, domestic trans- www.doingbusiness.org. This methodology 1. To identify the trading partners and export product for each economy, Doing Business port captures the time and cost from the was initially developed by Djankov and collected data on trade flows for the most loading of the shipment at the warehouse others (2008) and was revised in 2015. recent four-year period from international until the shipment reaches the economy’s databases such as the United Nations Commodity Trade Statistics Database (UN port (figure 7.8). For an economy trading Comtrade). For economies for which trade through a land border, domestic trans- flow data were not available, data from port captures the time and cost from the ancillary government sources (various ministries and departments) and World loading of the shipment at the warehouse Bank Group country offices were used to until the shipment reaches the economy’s identify the export product and natural trading land border (figure 7.9). partners. The time and cost estimates are based on the most widely used mode of transport (truck, train, riverboat) and the most widely used route (road, border posts) as reported by contributors. The time and cost estimates are based on the mode and route chosen by the majority of contributors. In the export case study, as noted, Doing Business does not assume a containerized shipment, and time and cost estimates may be based on the transport of 15 tons of noncontainerized products. In the import case study, auto parts are assumed to be containerized. In the cases where cargo is containerized, the time and cost for transport and other procedures are based on a shipment consisting of homogeneous cargo belon- ging to a single Harmonized System (HS) classification code. This assumption is particularly important for inspections, because shipments of homogeneous products are often subject to fewer and shorter inspections than shipments of products belonging to various HS codes. In some cases, the shipment travels from the warehouse to a customs post or terminal for clearance or inspections and then travels onward to the port or border. In these cases, the domestic transport time is the sum of the time for both transport segments. The time and cost for clearance or inspections are included in the measures for border compliance, however, not in those for domestic transport. 109 Provinces profiles 110 Doing Business in MOzAMBIQUE 2019 CABO DELGADO (Pemba) Starting a business (rank) 2 Registering property (rank) 8 Enforcing contracts (rank) 8 Score for starting a business (0–100) 67.32 Score for registering property (0–100) 52.13 Score for enforcing contracts (0–100) 51.53 Procedures (number) 11 Procedures (number) 8 Time (days) 612 Time (days) 38 Time (days) 39 Cost (% of claim value) 39.2 Cost (% of income per capita) 68.4 Cost (% of property value) 6.0 Quality of judicial processes index (0–18) 7.0 Quality of land administration index(0–30) 7.5 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Cost: MZN 21,400 (ranges vary from MZN 12,000 to (for notarial deeds, MZN 50 for each copy, one for the MZN 30,800) seller and one for the buyer) + MZN 120 (for each Property value: MZN 1,289,850 (USD 21,000) additional page, MZN 20 for 3 pages for 2 copies) + Data as of: September 30, 2018 Procedure 4. Payment of local transfer tax MZN 50 (for each entry in the notarial registration (SISA) book)] Procedure 1. Obtain property tax Agency: Municipal tax office certificate Procedure 6. Apply for registration of the Time: 7 days Agency: Tax authority transfer of property Cost: MZN 25,797 (2% of property value) Time: 7 days Agency: Property registry Cost: No cost Procedure 5. Submit the draft sale and Time: 5 days purchase agreement to verify and issue Cost: MZN 10,759 [MZN 5,159 (0.4% of property Procedure 2*. Obtain ownership the notarial deed of purchase (notarize value up to the first MZN 5 million; 0.03% of property certificate the sales agreement) value above MZN 5 million) + MZN 250 (for each Agency: Property registry Agency: Notary’s office entry in the registration book) + MZN 1,500 (for Time: 3 days each inscription in the Registry) + MZN 2,100 (for Time: 2 days registration certificate of a property transfer, 3 copies, Cost: MZN 700 Cost: MZN 8,659 [MZN 2,580 (0.2% of property MZN 700 each) + MZN 1,000 (for the pre-registration value for stamp duty) + MZN 250 (for notarial deed process study and organization) + MZN 500 (for the Procedure 3. Lawyer prepares the draft stamp duty) + MZN 5,159 (notarial fees of 0.4% of application) + MZN 250 (for property titles verifica- sale and purchase agreement property value up to the first MZN 5 million; 0.03% tion)] Agency: Lawyer’s office for the amounts exceeding MZN 5 million) + MZN Time: 10 days 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for the application) + MZN 100 PROVINCES PROFILES 111 CABO DELGADO Procedure 7. Submit the updated ownership certificate to update QUALITY OF LAND ADMINISTRATION INDEX the land use title to update the land use title Score Agency: Municipal urban planning department Quality of land administration index (0–30) 7.5 Time: 7 days Cost: MZN 10,000 Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.5 Procedure 8*. Apply for the update of the property tax certificate Geographic coverage index (0–8) 0.0 Agency: Tax authority Time: 7 days Land dispute resolution index (0–8) 6.0 Cost: No cost Equal access to property rights index (-2–0) 0.0 Note: For a list of all components questions and results on this index, refer to the Note: For additional details on each procedure, please visit http://doingbusiness. org/ “Details on the quality indexes” section. mozambique. *Simultaneous with previous procedure  Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 112 Doing Business in MOzAMBIQUE 2019 Cabo Delgado ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 72 Quality of judicial processes index (0–18) 7.0 Trial and judgement 320 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 220 Case management (0–6) 2.0 Total time 612 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 25.0 Note: For a list of all components questions and results on this index, refer to the Court fees 6.0 “Details on the quality indexes” section. Enforcement fees 8.2 Total cost 39.2 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 113 GAZA (Xai-Xai) Starting a business (rank) 3 Registering property (rank) 2 Enforcing contracts (rank) 9 Score for starting a business (0–100) 66.65 Score for registering property (0–100) 54.78 Score for enforcing contracts (0–100) 50.34 Procedures (number) 11 Procedures (number) 7 Time (days) 610 Time (days) 36 Time (days) 41 Cost (% of claim value) 42.5 Cost (% of income per capita) 77.8 Cost (% of property value) 5.5 Quality of judicial processes index (0–18) 7.0 Quality of land administration index(0–30) 7.5 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Improve the implementation of the license by simple • Ministério da Indústria e Comércio Short term notice at the one-stop shop • BAÚ Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 5 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain ownership certificate Agency: Property registry Procedure 5. Submit the draft sale and purchase agreement to Time: 3 days verify and issue the notarial deed of purchase (notarize the sales Cost: MZN 700 agreement) Agency: Notary’s office Procedure 2. Obtain property tax certificate Time: 2 days Agency: Municipal tax office Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 7 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: No cost up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 7 days 114 Doing Business in MOzAMBIQUE 2019 gaza Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 7.5 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.5 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 7 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 4,500 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 115 gaza ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 45 Quality of judicial processes index (0–18) 7.0 Trial and judgement 359 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 206 Case management (0–6) 2.0 Total time 610 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 30.0 Note: For a list of all components questions and results on this index, refer to the Court fees 6.0 “Details on the quality indexes” section. Enforcement fees 6.5 Total cost 42.5 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 116 Doing Business in MOzAMBIQUE 2019 INHAMBANE (Inhambane) Starting a business (rank) 6 Registering property (rank) 3 Enforcing contracts (rank) 4 Score for starting a business (0–100) 61.07 Score for registering property (0–100) 54.77 Score for enforcing contracts (0–100) 57.05 Procedures (number) 11 Procedures (number) 7 Time (days) 483 Time (days) 35 Time (days) 37 Cost (% of claim value) 33.9 Cost (% of income per capita) 124.5 Cost (% of property value) 5.6 Quality of judicial processes index (0–18) 7.0 Quality of land administration index(0–30) 7.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Time: 3 days Cost: MZN 25,797 (2% of property value) Property value: MZN 1,289,850 (USD 21,000) Data as of: September 30, 2018 Procedure 5. Submit the draft sale and purchase agreement to verify and issue the notarial deed of purchase (notarize the sales Procedure 1. Obtain property tax certificate agreement) Agency: Municipal tax office Agency: Notary’s office Time: 10 days Time: 4 days Cost: MZN 500 Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Procedure 2*. Obtain ownership certificate (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + Agency: Property registry MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Time: 3 days the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the Cost: MZN 700 seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Procedure 3. Lawyer prepares the draft sale and purchase agreement Procedure 6. Apply for ownership registration of the property Agency: Lawyer’s office Agency: Property registry Time: 10 days Time: 3 days Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Procedure 4. Payment of local transfer tax (SISA) Agency: Municipal tax office PROVINCES PROFILES 117 inhambane Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 QUALITY OF LAND ADMINISTRATION INDEX million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 7.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 7 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 4,500 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 118 Doing Business in MOzAMBIQUE 2019 inhambane ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 68 Quality of judicial processes index (0–18) 7.0 Trial and judgement 190 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 225 Case management (0–6) 2.0 Total time 483 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 20.0 Note: For a list of all components questions and results on this index, refer to the Court fees 6.0 “Details on the quality indexes” section. Enforcement fees 7.9 Total cost 33.9 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 119 MANICA (Chimoio) Starting a business (rank) 7 Registering property (rank) 5 Enforcing contracts (rank) 1 Score for starting a business (0–100) 60.38 Score for registering property (0–100) 53.61 Score for enforcing contracts (0–100) 64.40 Procedures (number) 11 Procedures (number) 7 Time (days) 380 Time (days) 38 Time (days) 47 Cost (% of claim value) 21.8 Cost (% of income per capita) 124.0 Cost (% of property value) 5.5 Quality of judicial processes index (0–18) 7.0 Quality of land administration index(0–30) 7.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 15 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain property tax certificate Agency: Municipal tax office Procedure 5. Submit the draft sale and purchase agreement to Time: 10 days verify and issue the notarial deed of purchase (notarize the sales Cost: MZN 2,000 agreement) Agency: Notary’s office Procedure 2*. Obtain ownership certificate Time: 2 days Agency: Property registry Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 3 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 700 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 3 days 120 Doing Business in MOzAMBIQUE 2019 manica Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 7.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 7 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 2,785 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 121 manica ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 58 Quality of judicial processes index (0–18) 7.0 Trial and judgement 167 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 155 Case management (0–6) 2.0 Total time 380 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 10.0 Note: For a list of all components questions and results on this index, refer to the Court fees 5.0 “Details on the quality indexes” section. Enforcement fees 6.8 Total cost 21.8 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 122 Doing Business in MOzAMBIQUE 2019 MAPUTO CITY (Maputo) Starting a business (rank) 1 Registering property (rank) 6 Enforcing contracts (rank) 10 Score for starting a business (0–100) 67.56 Score for registering property (0–100) 52.94 Score for enforcing contracts (0–100) 39.78 Procedures (number) 10 Procedures (number) 8 Time (days) 950 Time (days) 17 Time (days) 43 Cost (% of claim value) 53.3 Cost (% of income per capita) 120.5 Cost (% of property value) 5.2 Quality of judicial processes index (0–18) 8.5 Quality of land administration index(0–30) 7.5 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 7 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain ownership certificate Agency: Property registry Procedure 5. Submit the draft sale and purchase agreement to Time: 3 days verify and issue the notarial deed of purchase (notarize the sales Cost: MZN 700 agreement) Agency: Notary’s office Procedure 2. Obtain property tax certificate Time: 2 days Agency: Municipal tax office Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 7 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: No cost up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 7 days PROVINCES PROFILES 123 maputo CITY Cost: MZN 10,759 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 3 copies, MZN 700 each) + Quality of land administration index (0–30) 7.5 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 2.0 Transparency of information index (0–6) 1.5 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 4.0 Time: 7 days Equal access to property rights index (-2–0) 0.0 Cost: No cost Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Procedure 8*. Submit the updated ownership certificate for property tax purposes Agency: Municipal tax office Time: 1 day Cost: No cost Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 124 Doing Business in MOzAMBIQUE 2019 maputo CITY ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 90 Quality of judicial processes index (0–18) 8.5 Trial and judgement 640 Court structure and proceedings (-1–5) 4.0 Enforcement of judgement 220 Case management (0–6) 2.0 Total time 950 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 35.0 Note: For a list of all components questions and results on this index, refer to the Court fees 9.4 “Details on the quality indexes” section. Enforcement fees 8.9 Total cost 53.3 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 125 NAMPULA (Nampula) Starting a business (rank) 10 Registering property (rank) 9 Enforcing contracts (rank) 2 Score for starting a business (0–100) 59.01 Score for registering property (0–100) 50.92 Score for enforcing contracts (0–100) 58.45 Procedures (number) 11 Procedures (number) 8 Time (days) 673 Time (days) 40 Time (days) 47 Cost (% of claim value) 23.7 Cost (% of income per capita) 130.9 Cost (% of property value) 6.1 Quality of judicial processes index (0–18) 8.5 Quality of land administration index(0–30) 7.5 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Improve the implementation of the license by simple • Ministério da Indústria e Comércio Short term notice at the one-stop shop • BAÚ Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 7 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain property tax certificate Agency: Tax authority Procedure 5. Submit the draft sale and purchase agreement to Time: 10 days verify and issue the notarial deed of purchase (notarize the sales Cost: No cost agreement) Agency: Notary’s office Procedure 2*. Obtain ownership certificate Time: 2 days Agency: Property registry Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 3 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 700 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 3 days 126 Doing Business in MOzAMBIQUE 2019 nampula Cost: MZN 10,759 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 3 copies, MZN 700 each) + Quality of land administration index (0–30) 7.5 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.5 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 15 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 11,956 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Procedure 8*. Apply for the update of the property tax certificate Agency: Tax authority Time: 7 days Cost: No cost Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 127 nampula ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 65 Quality of judicial processes index (0–18) 8.5 Trial and judgement 337 Court structure and proceedings (-1–5) 4.0 Enforcement of judgement 271 Case management (0–6) 2.0 Total time 673 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 11.0 Note: For a list of all components questions and results on this index, refer to the Court fees 4.0 “Details on the quality indexes” section. Enforcement fees 8.7 Total cost 23.7 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 128 Doing Business in MOzAMBIQUE 2019 NIASSA (Lichinga) Starting a business (rank) 5 Registering property (rank) 4 Enforcing contracts (rank) 3 Score for starting a business (0–100) 61.33 Score for registering property (0–100) 54.18 Score for enforcing contracts (0–100) 57.37 Procedures (number) 11 Procedures (number) 7 Time (days) 571 Time (days) 34 Time (days) 42 Cost (% of claim value) 26.6 Cost (% of income per capita) 124.4 Cost (% of property value) 5.6 Quality of judicial processes index (0–18) 7 Quality of land administration index(0–30) 7.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 5 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain property tax certificate Agency: Municipal tax office Procedure 5. Submit the draft sale and purchase agreement to Time: 7 days verify and issue the notarial deed of purchase (notarize the sales Cost: No cost agreement) Agency: Notary’s office Procedure 2*. Obtain ownership certificate Time: 2 days Agency: Property registry Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 3 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 700 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 3 days PROVINCES PROFILES 129 niassa Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 7.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)] Reliability of infrastructure index (0–8) 0.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 15 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 5,000 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 130 Doing Business in MOzAMBIQUE 2019 niassa ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 85 Quality of judicial processes index (0–18) 7.0 Trial and judgement 271 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 215 Case management (0–6) 2.0 Total time 571 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 15.0 Note: For a list of all components questions and results on this index, refer to the Court fees 4.0 “Details on the quality indexes” section. Enforcement fees 7.6 Total cost 26.6 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 131 SOFALA (Beira) Starting a business (rank) 9 Registering property (rank) 10 Enforcing contracts (rank) 5 Score for starting a business (0–100) 59.04 Score for registering property (0–100) 49.94 Score for enforcing contracts (0–100) 56.52 Procedures (number) 11 Procedures (number) 7 Time (days) 708 Time (days) 39 Time (days) 83 Cost (% of claim value) 26.3 Cost (% of income per capita) 132.6 Cost (% of property value) 6.2 Quality of judicial processes index (0–18) 8.5 Quality of land administration index(0–30) 9.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Improve the implementation of the license by simple • Ministério da Indústria e Comércio Short term notice at the one-stop shop • BAÚ Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 10 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain ownership certificate Agency: Property registry Procedure 5. Submit the draft sale and purchase agreement to Time: 7 days verify and issue the notarial deed of purchase (notarize the sales Cost: MZN 700 agreement) Agency: Notary’s office Procedure 2. Obtain property tax certificate Time: 4 days Agency: Municipal tax office Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 7 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 750 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 15 days 132 Doing Business in MOzAMBIQUE 2019 sofala Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 9.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)]] Reliability of infrastructure index (0–8) 3.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 5.0 Time: 30 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 12,000 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 133 sofala ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 55 Quality of judicial processes index (0–18) 8.5 Trial and judgement 365 Court structure and proceedings (-1–5) 4.0 Enforcement of judgement 288 Case management (0–6) 2.0 Total time 708 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 13.5 Note: For a list of all components questions and results on this index, refer to the Court fees 4.0 “Details on the quality indexes” section. Enforcement fees 8.8 Total cost 26.3 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 134 Doing Business in MOzAMBIQUE 2019 TETE (Tete) Starting a business (rank) 4 Registering property (rank) 7 Enforcing contracts (rank) 6 Score for starting a business (0–100) 66.16 Score for registering property (0–100) 52.61 Score for enforcing contracts (0–100) 53.38 Procedures (number) 11 Procedures (number) 8 Time (days) 348 Time (days) 39 Time (days) 47 Cost (% of claim value) 60.9 Cost (% of income per capita) 75.7 Cost (% of property value) 6.4 Quality of judicial processes index (0–18) 8.5 Quality of land administration index(0–30) 10.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Improve the implementation of the license by simple • Ministério da Indústria e Comércio Short term notice at the one-stop shop • BAÚ Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 5 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain property tax certificate Agency: Tax authority Procedure 5. Submit the draft sale and purchase agreement to Time: 7 days verify and issue the notarial deed of purchase (notarize the sales Cost: No cost agreement) Agency: Notary’s office Procedure 2*. Obtain ownership certificate Time: 5 days Agency: Property registry Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 5 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 700 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 5 days PROVINCES PROFILES 135 tete Cost: MZN 10,759 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 3 copies, MZN 700 each) + Quality of land administration index (0–30) 10.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)]] Reliability of infrastructure index (0–8) 3.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 6.0 Time: 15 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 15,000 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Procedure 8*. Apply for the update of the property tax certificate Agency: Tax authority Time: 7 days Cost: No cost Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 136 Doing Business in MOzAMBIQUE 2019 tete ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 38 Quality of judicial processes index (0–18) 8.5 Trial and judgement 130 Court structure and proceedings (-1–5) 4.0 Enforcement of judgement 180 Case management (0–6) 2.0 Total time 348 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 49.0 Note: For a list of all components questions and results on this index, refer to the Court fees 4.0 “Details on the quality indexes” section. Enforcement fees 7.9 Total cost 60.9 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 137 ZAMBEZIA (Quelimane) Starting a business (rank) 8 Registering property (rank) 1 Enforcing contracts (rank) 7 Score for starting a business (0–100) 59.77 Score for registering property (0–100) 56.72 Score for enforcing contracts (0–100) 52.74 Procedures (number) 11 Procedures (number) 7 Time (days) 791 Time (days) 36 Time (days) 39 Cost (% of claim value) 23.0 Cost (% of income per capita) 132.8 Cost (% of property value) 5.2 Quality of judicial processes index (0–18) 7.0 Quality of land administration index(0–30) 9.0 Starting a business Please refer to the List of procedures for starting a business on page 140 Reform recommendations to improve the ease of starting a business Suggested reform Key players to champion the reform Implementation timeframe Improve the implementation of the license by simple • Ministério da Indústria e Comércio Short term notice at the one-stop shop • BAÚ Reduce the cost and remove or streamline the process • Ministério da Indústria e Comércio (MIC) Short to medium term of publishing the articles of association in the official • National printing press gazette • BAÚ • Company registry Simplify the current fee schedules for company • Company registrars and notaries Creating a table with fees in the short term; incorporation and make them publicly available at the • Ministério da Indústria e Comércio simplifying legislation in the medium to company registries and online • BAÚ long term. Improve coordination among stakeholders and • Ministério da Indústria e Comércio Medium to long term enhance back-office workflow in one-stop shops • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Increase efficiency by improving the implementation • Ministério da Indústria e Comércio Long term of the e-BAÚ and introducing online procedures • BAÚ • Company registrars and notaries • Tax authority • Provincial Directorate of Labor • National Social Security Institute • National printing press Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. Registering property LIST OF PROCEDURES Procedure 4. Payment of local transfer tax (SISA) Property value: MZN 1,289,850 (USD 21,000) Agency: Municipal tax office Data as of: September 30, 2018 Time: 3 days Cost: MZN 25,797 (2% of property value) Procedure 1. Obtain property tax certificate Agency: Municipal tax office Procedure 5. Submit the draft sale and purchase agreement to Time: 7 days verify and issue the notarial deed of purchase (notarize the sales Cost: MZN 500 agreement) Agency: Notary’s office Procedure 2*. Obtain ownership certificate Time: 5 days Agency: Property registry Cost: MZN 8,659 [MZN 2,580 (0.2% of property value for stamp duty) + MZN 250 Time: 3 days (for notarial deed stamp duty) + MZN 5,159 (notarial fees of 0.4% of property value Cost: MZN 700 up to the first MZN 5 million; 0.03% for the amounts exceeding MZN 5 million) + MZN 150 (for each one-act deed, MZN 50 for each page, 3 pages) + MZN 100 (for Procedure 3. Lawyer prepares the draft sale and purchase the application) + MZN 100 (for notarial deeds, MZN 50 for each copy, one for the agreement seller and one for the buyer) + MZN 120 (for each additional page, MZN 20 for 3 pages for 2 copies) + MZN 50 (for each entry in the notarial registration book)] Agency: Lawyer’s office Time: 10 days Procedure 6. Apply for ownership registration of the property Cost: MZN 21,400 (ranges vary from MZN 12,000 to MZN 30,800) Agency: Property registry Time: 7 days 138 Doing Business in MOzAMBIQUE 2019 zaMbEzia Cost: MZN 10,059 [MZN 5,159 (0.4% of property value up to the first MZN 5 million; 0.03% of property value above MZN 5 million) + MZN 250 (for each entry QUALITY OF LAND ADMINISTRATION INDEX in the registration book) + MZN 1,500 (for each inscription in the Registry) + MZN Score 1,400 (for registration certificate of a property transfer, 2 copies, MZN 700 each) + Quality of land administration index (0–30) 9.0 MZN 1,000 (for the pre-registration process study and organization) + MZN 500 (for the application) + MZN 250 (for property titles verification)]] Reliability of infrastructure index (0–8) 3.0 Transparency of information index (0–6) 1.0 Procedure 7. Submit the updated ownership certificate to update the land use title Geographic coverage index (0–8) 0.0 Agency: Municipal urban planning department Land dispute resolution index (0–8) 5.0 Time: 7 days Equal access to property rights index (-2–0) 0.0 Cost: MZN 500 Note: For a list of all components questions and results on this index, refer to the “Details on the quality indexes” section. Note: For additional details on each procedure, please visit http://doingbusiness. org/ mozambique. *Simultaneous with previous procedure Reform recommendations to improve the ease of registering property Suggested reform Key players to champion the reform Implementation timeframe Reinforce transparency in the land administration • Ministry of Justice, Constitutional and Religious Affairs Producing a brochure with compiled informa- system • Property registrars and notaries tion as well as producing a report with annual statistics in the short term; making cadastral information public in the medium to long term. Provide clarity on fee schedules for registration • Property registrars and notaries Creating a table with fees in the short term; and notary services at the property registries and simplify legislation, in the medium to long term. online Streamline the transfer tax payment process • Ministério da Justiça, Assuntos Constitucionais e Religiosos Delegation to urban land officials in the short • Autarquias term; amending legislation in the medium to long term. Improve coordination among stakeholders by • Ministry of Justice, Constitutional and Religious Affairs Short to medium/long term establishing communication systems between the • Property registrars and notaries property registries and the municipalities • Municipalities Increase digitization of cadastral plans and • Ministry of Justice, Constitutional and Religious Affairs Medium to long term ownership records • Property registrars • Municipalities Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. PROVINCES PROFILES 139 zaMbEzia ENFORCING CONTRACTS INDICATOR DETAILS QUALITY OF JUDICIAL PROCESSES INDEX Time (days) Score Filing and service 80 Quality of judicial processes index (0–18) 7.0 Trial and judgement 483 Court structure and proceedings (-1–5) 2.5 Enforcement of judgement 228 Case management (0–6) 2.0 Total time 790 Court automation (0–4) 0.0 Cost (% of claim value) Alternative dispute resolution (0–3) 2.5 Attorney fees 15.0 Note: For a list of all components questions and results on this index, refer to the Court fees 3.0 “Details on the quality indexes” section. Enforcement fees 5.0 Total cost 23.0 Reform recommendations to improve the ease of enforcing contracts Suggested reform Key players to champion the reform Implementation timeframe Publish laws and judgments • Ministry of Justice, Constitutional and Religious Affairs Short term • National printing press • Provincial courts Enhance training for judges and judiciary support • Supreme Court While a training plan could start being imple- staff • Superior appeal courts mented in the short term, the effects of such • Provincial courts could be felt from the medium to the long term. Consider limiting adjournments and enforcing time • Ministry of Justice, Constitutional and Religious Affairs Short term limits • Supreme Court • Superior Council of the Judiciary Increase judge’s accountability through periodic • Superior Council of the Judiciary Short term judicial inspections and performance statistics • Provincial courts Use process mapping to identify bottlenecks in the • Ministry of Justice, Constitutional and Religious Affairs Process mapping in the short term; the relevant court system • Provincial courts reforms to the Code of Civil Procedure in the medium to long term. Streamline the case management system • Ministry of Justice, Constitutional and Religious Affairs Medium to long term. Approaches to electronic • Provincial courts or web-based tools depend on the priorities of the judiciary and budget allocation and a gradual approach could be considered. Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 140 Doing Business in MOzAMBIQUE 2019 Procedures required to start a business, by location Company legal form: Closely held limited liability company Minimum capital requirement: MZN 0 Data as of: September 30, 2018 Cabo Delgado Gaza Inhambane Manica Maputo City Nampula Niassa 1. Obtain a certificate of name reserva- Time (days) 2 1 2 2 1 2 1 tion (certidão de Reserva de Nome) Cost (MZN) 300 300 300 300 300 300 300 Agency Company registry of Company registry of Company registry of Company registry Legal Entities Registry Company registry of Company registry of Cabo Delgado (Con- Gaza (Conservatória Inhambane (Conser- of Manica (Conser- of Maputo City (Con- Nampula (Conser- Niassa (Conservatória servatória do Registo do Registo das vatória do Registo vatória do Registo servatória do Registo vatória do Registo do Registo das das Entidades Legais) Entidades Legais) das Entidades Legais) das Entidades Legais) das Entidades Legais) das Entidades Legais) Entidades Legais) 2. Sign the company deed before a Time (days) 2 1 1 1 1 1 1 notary/Authenticate the signatures of the company deed (1) Cost (MZN) 100 250 100 250 100 100 100 Agency One-stop shop Notary (Cartório One-stop shop (Bal- Notary (Cartório One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Balcão de Atendi- Notarial) cão de Atendimento Notarial) cão de Atendimento cão de Atendimento (Balcão de Atendi- mento Único)/ Notary Único) Único) Único) mento Único)/ Notary (Cartório Notarial) (Cartório Notarial) 3. Open a bank account and pay the Time (days) 1 1 1 1 1 1 1 company registration fees Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency Bank Bank Bank Bank Bank Bank Bank 4. Register the company (2) Time (days) 2 3 2 4 5 3 2 Cost (MZN) 2,707 2,832 3,062 2,782 30,682 2,582 3,032 Agency Company registry of Company registry of Company registry of Company registry Company registry of Company registry of Company registry of Cabo Delgado (Con- Gaza(Conservatória Inhambane (Conser- of Manica (Conser- Maputo City (Con- Nampula (Conser- Niassa (Conservatória servatória do Registo do Registo das vatória do Registo vatória do Registo servatória do Registo vatória do Registo do Registo das das Entidades Legais) Entidades Legais) das Entidades Legais) das Entidades Legais) das Entidades Legais) das Entidades Legais) Entidades Legais) 5. Request the publication of the articles Time (days) 21 21 21 21 n.a 21 21 of association in the official gazette (Boletim da República) Cost (MZN) 14,550 14,550 28,650 28,650 n.a 28,650 28,650 Agency National printing National printing National printing National printing n.a National printing National printing press (Cabo Delgado) press (Maputo City) press (Maputo City) press (Maputo City) press (Maputo City) press (Maputo City) 6. Register for taxes and obtain a unique Time (days) 3 2 2 2 3 3 2 tax identification number (NUIT) Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency Tax authority Tax authority Tax authority Tax authority Tax authority Tax authority Tax authority 7. Apply for a simplified operating license/ Time (days) 1 2 1 2 1 3 1 Notify the commencement of business (3) Cost (MZN) no cost 2,128 no cost no cost no cost 2,128 no cost Agency One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- cão de Atendimento cão de Atendimento cão de Atendimento cão de Atendimento cão de Atendimento cão de Atendimento cão de Atendimento Único) Único) Único) Único) Único) Único) Único) 8/9. Declare the commencement of See note (4) Procedure 8 Procedure 9 Procedure 8 Procedure 9 Procedure 8 Procedure 9 Procedure 8 activity Time (days) 3 2 (*) 2 1 (*) 1 (*) 3 (*) 2 Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency Tax authority Tax authority Tax authority Tax authority Tax authority Tax authority Tax authority 8/9. Declare the beginning of activity and See note (4) Procedure 9 Procedure 8 Procedure 9 Procedure 8 Procedure 7 Procedure 8 Procedure 9 register employees Time (days) 3 (*) 3 2 (*) 3 3 4 2 (*) Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency Provincial Directorate Provincial Directorate Provincial Directorate Provincial Directorate Provincial Directorate Provincial Directorate Provincial Directorate of Labor, Employment of Labor, Employment of Labor, Employment of Labor, Employment of Labor, Employment of Labor, Employment of Labor, Employment and Social Security and Social Security and Social Security and Social Security and Social Security and Social Security and Social Security 10. Register the company and the Time (days) 1 1 1 1 1 2 1 employees Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency National Social National Social National Social National Social National Social National Social National Social Secu- Security Institute Security Institute Security Institute Security Institute Security Institute Security Institute rity Institute (Instituto (Instituto Nacional (Instituto Nacional (Instituto Nacional (Instituto Nacional (Instituto Nacional (Instituto Nacional Nacional de Segu- de Segurança Social, de Segurança Social, de Segurança Social, de Segurança Social, de Segurança Social, de Segurança Social, rança Social, INSS) INSS) INSS) INSS) INSS) INSS) INSS) 11. Obtain workers' compensation insur- Time (days) 1 (*) 1 (*) 1 (*) 1 (*) 1 (*) 1 (*) 1 (*) ance coverage Cost (MZN) no cost no cost no cost no cost no cost no cost no cost Agency Insurance company Insurance company Insurance company Insurance company Insurance company Insurance company Insurance company (1) In Gaza, Inhambane, Manica, Maputo City and Niassa, it is still necessary to sign the company deed before a notary. (2) In Maputo City, entrepreneurs can complete both procedures—registering the company and publishing its articles of association in the official gazette—at the company registry. In other provinces these procedures must be done separately at the company registry and the national printing press. Inhambane, Manica, Maputo City, Nampula, Niassa, Sofala and Zambezia have not yet implemented the simplified abstract of publication and publish all the pages of their articles of association in the official gazette. (3) In Gaza, Nampula, Sofala, Tete and Zambezia it is still necessary to apply for a simplified operating license wich has a fee of 50% of the minimum monthly salary of a public servant. (4) Procedures 8 and 9 are simultaneous in all provinces except in Tete. In Gaza, Manica, Maputo City, Nampula and Zambezia the procedure in the Provincial Directorate of Labor, Employment and Social Security is placed before the procedure of declaration of commencement of activity in the Tax authority because according to the Doing Business methodology, when two procedures are simultaneous, the procedure whith the longest associated time is recorded first. PROVINCES PROFILES 141 Sofala Tete Zambezia 2 1 1 One must verify the availability of the company name. Depending on the province the certificate of name reservation can be obtained at the company registry (Conservatoria do Registo das Entidades Legais) or at the one-stop shop (Balcão de Atendimento Único). 300 300 400 The fee charged can be found in the fee schedules of the company registry (Tabela de Emolumentos do Registo das Entidades Legais) in Ministerial Order No. 2/2016 of January 6. Company registry of One-stop shop (Bal- One-stop shop (Bal- Sofala (Conservatória cão de Atendimento cão de Atendimento do Registo das Único) Único) Entidades Legais) 1 1 1 According to Decree No. 1/2018 of May 4, which recently reformed Article 90 of the Commercial Code, partners are no longer required to sign the articles of association in the presence of a notary. The articles of association are issued in written form and may be signed and submitted along with the partners’ 100 100 250 identification documents for subsequent authentication of their signatures by the relevant authority. There is no need for a public deed. Depending on the province this procedure can be done at the notary’s office (Cartóro Notarial), the one-stop-Shop (Balcão de Atendimento Único) or the One-stop shop One-stop shop (Bal- One-stop shop (Bal- company registry (Conservatória do Registo das Entidades Legais). (Balcão de Atendi- cão de Atendimento cão de Atendimento The fee charged can be found in the fee schedules of the company registry (Tabela de Emolumentos do Registo de Entidades Legais) in Ministerial Order No. mento Único)/ Notary Único) Único) 2/2016 of January 6. (Cartorio Notarial) 1 1 1 The registration fees can be paid through a bank deposit. For companies with annual sales (or volume de negócios) above MZN 2,500,000, the tax authority requires a bank account in the company’s name for tax registration purposes. no cost no cost no cost Bank Bank Bank 4 3 2 In order to register the company, the signed articles of association must be submitted at the company registry. Registration fees vary according to the share capital of the company. the company’s capital up to MZN 5 million are taxable at a 0.4% rate, and amounts exceeding MZN 5 million are taxable at a 0.03% 3,032 2,457 2,832 rate. Company registry of One-stop shop (Bal- Company registry of In order to complete the registration process, it is necessary to publish the company’s articles of association in the official gazette (Boletim da Républica). A Sofala (Conservatória cão de Atendimento Zambezia (Conser- recent modification of the Commercial Code (Decree No. 1/2018 of May 4) allows the publication of a simplified abstract of the articles of association. This do Registo das Único) vatória do Registo abstract contains the basic information of the articles of association and can be done by the company registry (Conservatoria do Registo das Entidades Legais). Entidades Legais) das Entidades Legais) The fees charged can be found in the fee schedules of the company registry (Tabela de Emolumentos do Registo das Entidades Legais) in Ministerial Order No. 2/2016 of January 6. 21 21 21 The company’s articles of association must be published in the official gazette (Boletim da República). The national printing press of Mozambique (Imprensa Nacional) is the institution in charge of the gazette. Applicants must submit a hard copy as well as a digital copy of the publication abstract to the national 28,650 14,550 28,650 printing press in Maputo. The total amount payable for publishing the articles of association varies according to the number of pages of the publication National printing National printing National printing abstract and is estimated by the national printing press. The fee for publication of the articles of association is MZN 2,820 per 25-line page (Ministerial Order press (Sofala) press (Maputo City) press (Zambezia) No.79/2017 of December 27). The fee to send the articles of association to the national printing press in Maputo is MZN 450. Applicants must make the corresponding payment to the national printing press’s bank account and submit a copy of the payment receipt to the national print- ing press. The articles of association are also published online at: http://www.portaldogoverno.gov.mz/por/Governo/Legislacao/Boletins-da-Republica. 3 2 2 The company must be registered at the tax authority (Autoridade Tributária). In order to apply for a unique tax identification number (Número Único de Identificação Tributária or NUIT), two copies of form M/01C must be filled out and submitted to the tax authority. In addition, the following documents must be no cost no cost no cost submitted: the partners’ personal NUIT, the certificate of name reservation and the company’s registration certificate. Tax authority Tax authority Tax authority 1 2 3 Depending on its sector of activity, a newly established company would be required to submit a simple notice for commencement of operations or to obtain the customary simplified business license. Companies in sectors such as clothing, shoes, office supplies, or accounting, engineering and legal services, can submit a 2,128 2,128 2,128 simple notice to the one-stop shop (Balcão de Atendimento Único) at no cost. The requirements for submitting a simple notice are: One-stop shop (Bal- One-stop shop (Bal- One-stop shop (Bal- 1. Application form; cão de Atendimento cão de Atendimento cão de Atendimento 2. A copy of a valid identification document: Passport, Driver’s License, Professional Registration Card or Voter Registration Card (for Mozambican citizens); Único) Único) Único) 3. A legal entity registration certificate or copy of the publication of the articles of association in the official gazette (Boletim da República) and proof of the quality of the applicant, for legal persons; 4. Copy of the proof of issuance of the unique tax identification number. For some other sectors, a customary simplified business license must be obtained at the one-stop shop with payment of a fee of 50% of the minimum monthly salary of a public servant. Procedure 8 Procedure 8 Procedure 9 For VAT and corporate income tax purposes, the beginning of business activity must be notified at least 15 days before the actual starting date. After the documentation is submitted and registered, the applicant receives the original stamped M/02 form and a letter signed by the Director of the tax authority 3 3 2 (*) indicating the date of start of activity. no cost no cost no cost Tax authority Tax authority Tax authority Procedure 9 Procedure 9 Procedure 8 The company must notify the beginning of any activity, admission of employees and the work schedules at the Provincial Directorate of Labor, Employment and 3 (*) 3 3 Social Security. These three documents can be submitted together. In addition, the company must complete and submit a form listing all employees (Folha de Relação Nominal) on the website of the Ministry of Labour, no cost no cost no cost Employment and Social Security (http://www.mitess.gov.mz:7081/FolhaNominal/RG/RegistarEmpresa.aspx). This form contains detailed information on each worker and must be updated every April based on March data. When the start of business activity occurs after April, the employer must complete the form Provincial Directorate Provincial Directorate Provincial Directorate within 30 days (Ministerial Order No. 104/2015 of November 27). The following documents must be attached to complete this procedure: business license, of Labor, Employment of Labor, Employment of Labor, Employment declaration of commencement of activity, assignment statement of unique tax identification number (NUIT) and declaration of attribution of the taxpayer and Social Security and Social Security and Social Security number by the INSS (National Social Security Institute). 1 1 1 The applicant must register the company and those employees who are still not registered with the social security system within 15 days of the start of busi- ness activity, as per Decree No. 51/2017 of October 9. no cost no cost no cost The company’s registration must be done in person and the following information should be submitted: an approved copy of the M/02 form for tax registration, identity documentation, birth certificate or DIRE, unique tax identification number (Número Único de Identificação Tributária or NUIT) and the National Social National Social National Social business license. These documents can be submitted within 30 days of their date of issuance. Once the company is registered a password is provided, and Security Institute Security Institute Security Institute employees can be registered online by completing an electronic form available on the Social Security website (http://www3.inss.gov.mz/Seguranca/Acesso/ (Instituto Nacional (Instituto Nacional (Instituto Nacional Login?ReturnUrl=%2f). de Segurança Social, de Segurança Social, de Segurança Social, In order to confirm and issue each beneficiary’s identity card, the company is required to submit the following documents within 30 days of registering the INSS) INSS) INSS) employees: 1. Valid identity documentation, birth certificate or DIRE; 2. Unique tax identification number (Número Único de Identificação Tributária or NUIT). 1 (*) 1 (*) 1 (*) The company must have a group insurance plan (seguro colectivo) covering every employee for workplace accidents and occupational illnesses that are no cost no cost no cost not covered by the social security health system, as per Article 231 of Labor Law 23/2007 of August 1. Submission of insurance documents is not required. However, the company must have the documents available in case of inspection or of an employee’s accident or illness. Insurance company Insurance company Insurance company (*) Simultaneous with previous procedure. Source: Doing Business database. Note: n.a. = not applicable. 142 Doing Business in MOzAMBIQUE 2019 DETAILS ON THE QUALITY INDEXES Inhambane, Manica, Niassa Answer Score Quality of the land administration index (0-30) 7 Reliability of infrastructure index (0–8) 0 In what format are the majority of title or deed records kept—in a paper format or in a computerized format (scanned or fully digital)? (0–2) Paper 0 Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)? (0–1) No 0 In what format are the majority of maps of land plots kept—in a paper format or in a computerized format (scanned or fully digital)? (0–2) Paper 0 Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information No 0 system)? (0–1) Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in Separate databases 0 different but linked databases or in separate databases? (0–1) Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties? (0–1) No 0 Transparency of information index (0–6) 1 Who is able to obtain information on land ownership at the agency in charge of immovable property registration? (0–1) Anyone who pays 1 the official fee Is the list of documents that are required to complete any type of property transaction made publicly available—and if so, how? (0–0.5) Yes, in person 0 Is the applicable fee schedule for any property transaction at the agency in charge of immovable property registration made publicly avail- Yes, in person 0 able—and if so, how? (0–0.5) Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property owner- Yes, in person 0 ship within a specific time frame—and if so, how does it communicate the service standard? (0–0.5)? Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property No 0 registration? (0–1) Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency? (0–0.5) No 0 Who is able to consult maps of land plots? (0–0.5) Only intermediar- 0 ies and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? (0–0.5) Yes, in person 0 Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it communi- Yes, in person 0 cate the service standard? (0–0.5) Is there a specific and separate mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency? (0–0.5) No 0 Geographic coverage index (0–8) 0 Are all privately held land plots in the economy formally registered at the immovable property registry? (0–2) No 0 Are all privately held land plots in the city formally registered at the immovable property registry? (0–2) No 0 Are all privately held land plots in the economy mapped? (0–2) No 0 Are all privately held land plots in the city mapped? (0–2) No 0 Land dispute resolution index (0–8) 6 Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable Yes 1.5 to third parties? (0–1.5) Yes 0.5 Is the system of immovable property registration subject to a state or private guarantee? (0–0.5) No 0 Is there a specific compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based Yes (registrar; 0.5 on erroneous information certified by the immovable property registry? (0–0.5) notary) Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of Yes (registrar; notary) 0.5 contracts with requirements of the law)? (0–0.5) Does the legal system require verification of the identity of the parties to a property transaction? (0–0.5) Yes 1 Is there a national database to verify the accuracy of identity documents? (0–1) Between 1 and 2 2 years How long does it take on average to obtain a decision from the first-instance court for a standard land dispute between two local businesses No 0 over tenure rights of a property worth NGN 26,969,050 (without appeal)? (0–3) Are there any statistics on the number of land disputes in the first instance? (0–0.5) 0 Equal access to property rights index (-2–0) Yes 0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0 Source: Doing Business database. PROVINCES PROFILES 143 Maputo City Cabo Delgado, Gaza, Nampula Sofala, Zambezia Tete Answer Score Answer Score Answer Score Answer Score 7.5 7.5 9 10 2 0 3 3 Computer/scanned 1 Paper 0 Paper 0 Paper 0 No 0 No 0 No 0 No 0 Computer/scanned 1 Paper 0 Fully digital 2 Fully digital 2 No 0 No 0 Yes 1 Yes 1 Separate databases 0 Separate databases 0 Separate databases 0 Separate databases 0 No 0 No 0 No 0 No 0 1.5 1.5 1 1 Anyone who pays 1 Anyone who pays 1 Anyone who pays 1 Anyone who pays 1 the official fee the official fee the official fee the official fee Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, on public 0.5 Yes, on public 0.5 Yes, in person 0 Yes, in person 0 boards boards No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 Only intermediar- 0 Only intermediar- 0 Only intermediar- 0 Only intermediar- 0 ies and interested ies and interested ies and interested ies and interested parties parties parties parties Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 Yes, in person 0 No 0 No 0 No 0 No 0 0 0 0 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 No 0 4 6 5 6 Yes 1.5 Yes 1.5 Yes 1.5 Yes 1.5 Yes 0.5 Yes 0.5 Yes 0.5 Yes 0.5 No 0 No 0 No 0 No 0 Yes (registrar; 0.5 Yes (registrar; 0.5 Yes (registrar; 0.5 Yes (registrar; 0.5 notary) notary) notary) notary) Yes (registrar; notary) 0.5 Yes (registrar; notary) 0.5 Yes (registrar; notary) 0.5 Yes (registrar; notary) 0.5 Yes 1 Yes 1 Yes 1 Yes 1 More than 3 years 0 Between 1 and 2 2 Between 2 and 3 1 Between 1 and 2 2 years years years No 0 No 0 No 0 No 0 0 0 0 0 Yes 0 Yes 0 Yes 0 Yes 0 Yes 0 Yes 0 Yes 0 Yes 0 144 Doing Business in MOzAMBIQUE 2019 DETAILS ON THE QUALITY INDEXES Maputo City, Nampula, Cabo Delgado, Gaza, Sofala, Tete Inhambane, Manica, Niassa, Zambezia Answer Score Answer Score Quality of judicial processes index (0-18) 8.5 7 Court structure and proceedings (0-5) 4 2.5 Is there a court or division of a court dedicated solely to hearing commercial cases? (0-1.5) Yes 1.5 No 0 Small claims court (0-1.5) 1 1 a. Is there a small claims court or a fast-track procedure for small claims? Yes Yes b. If yes, is self-representation allowed? No No Is pretrial attachment available? (0-1) Yes 1 Yes 1 Are new cases assigned randomly to judges? (0-1) Yes, but manual 0.5 Yes, but manual 0.5 Does a woman’s testimony carry the same evidentiary weight in court as a man’s? (-1-0) Yes 0 Yes 0 Case management (0-6) 2 2 Time standards (0-1) 0.5 0.5 a. Are there laws setting overall time standards for key court events in a civil case? Yes Yes b. If yes, are the time standards set for at least three court events? Yes Yes c. Are these time standards respected in more than 50% of cases? No No Adjournments (0-1) 0.5 0.5 a. Does the law regulate the maximum number of adjournments that can be granted? No No b. Are adjournments limited to unforeseen and exceptional circumstances? Yes Yes c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes Yes Can two of the following four reports be generated about the competent court: (i) time to disposition re- No 0 No 0 port; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? (0-1) Is a pretrial conference among the case management techniques used before the competent court? (0-1) Yes 1 Yes 1 Are there any electronic case management tools in place within the competent court for use by judges? No 0 No 0 (0-1) Are there any electronic case management tools in place within the competent court for use by lawyers? No 0 No 0 (0-1) Court automation (0-4) 0 0 Can the initial complaint be filed electronically through a dedicated platform within the competent court? No 0 No 0 (0-1) Is it possible to carry out service of process electronically for claims filed before the competent court? No 0 No 0 (0-1) Can court fees be paid electronically within the competent court? (0-1) No 0 No 0 Publication of judgments (0-1) 0 0 a. Are judgments rendered in commercial cases at all levels made available to the general public through No No publication in official gazettes, in newspapers or on the internet or court website? b. Are judgments rendered in commercial cases at the appellate and supreme court level made available No No to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 2.5 Arbitration (0-1.5) 1.5 1.5 a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section Yes Yes of the applicable code of civil procedure encompassing substantially all its aspects? b. Are there any commercial disputes—aside from those that deal with public order or public policy—that No No cannot be submitted to arbitration? c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Yes Mediation/Conciliation (0-1.5) 1 1 a. Is voluntary mediation or conciliation available? Yes Yes b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or section Yes Yes of the applicable code of civil procedure encompassing substantially all their aspects? c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No No conciliation is successful, a refund of court filing fees, income tax credits or the like)? Source: Doing Business database. Note: According to the Doing Business case study, the competent court is the civil division of the specific provincial court. TRADE LOCATION PROFILES 145 Trade location profiles 146 Doing Business in MOzAMBIQUE 2019 PORT OF BEIRA Trading across borders Trading across borders score (0-100) 68.40 Cost to export (hours) Time to import (hours) Documentary compliance 40 Documentary compliance 36 Border compliance 52 Border compliance 84 Cost to export (USD) Cost to import (USD) Documentary compliance 170 Documentary compliance 140 Border compliance 335 Border compliance 710 DETAils Characteristics Export Import HS 38: Miscellaneous HS 8708: Parts and accessories of motor Product chemical products (coal) vehicles (auto parts) Trade partner India China Border Port of Beira Port of Beira Distance (km) 10 10 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 185 185 Components of Border Compliance Associated Time to complete costs Export (hours) (USD) Clearance and inspections required by customs authorities 6 160 Clearance and inspections required by agencies other than customs 0 0 Port or border handling 48 175 Import Clearance and inspections required by customs authorities 29 440 Clearance and inspections required by agencies other than customs 0 0 Port or border handling 84 270 DOCUMENTS Export Import Commercial invoice Commercial invoice Packing list Packing list Certificate of origin Bill of lading Bill of lading Delivery order Customs release order Customs release order "Nota de Embarque" Customs import declaration Bank commitment term Inspection report from scanner Customs export declaration Terminal handling receipts Terminal handling receipts VGM SOLAS certificate VGM SOLAS certificate TRADE LOCATION PROFILES 147 PORT OF BEIRA Reform recommendations to improve the ease of trading across borders Suggested reform Key players to champion the reform Implementation timeframe Remove the mandatory use of customs brokers and • Customs Office (tax authority) Short term increasing competition in the brokerage profession Streamline customs procedures and apply efficient • Customs office (tax authority) Short to medium/long term risk-based management Fully implement the electronic single window by • Customs Office (tax authority) Creating a paperless environment in the short going paperless, and connect more stakeholders to • Mozambique Community Network, SA (MCNET) term; connecting more stakeholders in the short the platform • Ministry of Agriculture and Food Security (MASA) to medium/long term. • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) Strengthen regional integration through the effective • Ministry of Foreign Affairs Medium to long term implementation of border cooperation and customs • Customs Office (tax authority) union agreements • Mozambique Community Network, SA (MCNET) • Ministry of Agriculture and Food Security (MASA) • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) • Gestão de Terminais S.A. (GT) Upgrade trade logistics infrastructure with a special • Ports and Railways of Mozambique (CFM) Medium to long term focus on access roads to the ports • Cornelder de Mozambique (CdM) • Maputo Port Development Company (MPDC) • Corredor de Desenvolvimento do Norte (CDN) Consider reducing administrative fees • Customs Office (tax authority) Medium to long term • Mozambique Community Network, SA (MCNET) • Kudumba Investments Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 148 Doing Business in MOzAMBIQUE 2019 PORT OF MAPUTO Trading across borders Trading across borders score (0-100) 62.92 Time to export (hours) Time to import (hours) Documentary compliance 36 Documentary compliance 25 Border compliance 130 Border compliance 34 Cost to export (USD) Cost to import (USD) Documentary compliance 160 Documentary compliance 125 Border compliance 500 Border compliance 815 DETAils Characteristics Export Import HS 17: Sugars and sugar HS 8708: Parts and accessories of motor Product confectionery (sugar) vehicles (auto parts) Trade partner Portugal China Border Port of Maputo Port of Maputo Distance (km) 10 10 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 300 300 Components of Border Compliance Associated Time to complete costs Export (hours) (USD) Clearance and inspections required by customs authorities 38 285 Clearance and inspections required by agencies other than customs 48 20 Port or border handling 48 195 Import Clearance and inspections required by customs authorities 12 440 Clearance and inspections required by agencies other than customs 0 0 Port or border handling 34 375 DOCUMENTS Export Import Commercial invoice Commercial invoice Packing list Packing list Phytosanitary certificate Bill of lading Certificate of origin Delivery order Bill of lading Customs release order Bank commitment term Customs import declaration Supervision of packing report Inspection report from scanner Customs release order Terminal handling receipts Customs export declaration VGM SOLAS certificate Inspection report from scanner Terminal handling receipts VGM SOLAS certificate TRADE LOCATION PROFILES 149 PORT OF MAPUTO Reform recommendations to improve the ease of trading across borders Suggested reform Key players to champion the reform Implementation timeframe Remove the mandatory use of customs brokers and • Customs Office (tax authority) Short term increasing competition in the brokerage profession Streamline customs procedures and apply efficient • Customs office (tax authority) Short to medium/long term risk-based management Fully implement the electronic single window by • Customs Office (tax authority) Creating a paperless environment in the short going paperless, and connect more stakeholders to • Mozambique Community Network, SA (MCNET) term; connecting more stakeholders in the short the platform • Ministry of Agriculture and Food Security (MASA) to medium/long term. • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) Strengthen regional integration through the effective • Ministry of Foreign Affairs Medium to long term implementation of border cooperation and customs • Customs Office (tax authority) union agreements • Mozambique Community Network, SA (MCNET) • Ministry of Agriculture and Food Security (MASA) • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) • Gestão de Terminais S.A. (GT) Upgrade trade logistics infrastructure with a special • Ports and Railways of Mozambique (CFM) Medium to long term focus on access roads to the ports • Cornelder de Mozambique (CdM) • Maputo Port Development Company (MPDC) • Corredor de Desenvolvimento do Norte (CDN) Consider reducing administrative fees • Customs Office (tax authority) Medium to long term • Mozambique Community Network, SA (MCNET) • Kudumba Investments Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 150 Doing Business in MOzAMBIQUE 2019 PORT OF NACALA Trading across borders Trading across borders score (0-100) 60.85 Cost to export (hours) Time to import (hours) Documentary compliance 48 Documentary compliance 30 Border compliance 140 Border compliance 36 Cost to export (USD) Cost to import (USD) Documentary compliance 140 Documentary compliance 125 Border compliance 685 Border compliance 670 Details Characteristics Export Import HS 07: Edible vegetables HS 8708: Parts and accessories of motor Product and certain roots and vehicles (auto parts) tubers (pigeon peas) Trade partner India China Border Port of Nacala Port of Nacala Distance (km) 10 10 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 350 350 Components of Border Compliance Associated Time to complete costs Export (hours) (USD) Clearance and inspections required by customs authorities 48 310 Clearance and inspections required by agencies other than customs 24 20 Port or border handling 72 355 Import Clearance and inspections required by customs authorities 14 280 Clearance and inspections required by agencies other than customs 0 0 Port or border handling 36 390 DOCUMENTS Export Import Commercial invoice Commercial invoice Packing list Packing list Phytosanitary certificate Bill of lading Certificate of origin Delivery order Bill of lading Customs release order Bank commitment term Customs import declaration Supervision of packing report MC1 Exit Model Customs release order Inspection report from scanner Customs export declaration Terminal handling receipts Inspection report from scanner VGM SOLAS certificate Terminal handling receipts Mate's receipt VGM SOLAS certificate TRADE LOCATION PROFILES 151 PORT OF NACALA Reform recommendations to improve the ease of trading across borders Suggested reform Key players to champion the reform Implementation timeframe Remove the mandatory use of customs brokers and • Customs Office (tax authority) Short term increasing competition in the brokerage profession Streamline customs procedures and apply efficient • Customs office (tax authority) Short to medium/long term risk-based management Fully implement the electronic single window by • Customs Office (tax authority) Creating a paperless environment in the short going paperless, and connect more stakeholders to • Mozambique Community Network, SA (MCNET) term; connecting more stakeholders in the short the platform • Ministry of Agriculture and Food Security (MASA) to medium/long term. • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) Strengthen regional integration through the effective • Ministry of Foreign Affairs Medium to long term implementation of border cooperation and customs • Customs Office (tax authority) union agreements • Mozambique Community Network, SA (MCNET) • Ministry of Agriculture and Food Security (MASA) • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) • Gestão de Terminais S.A. (GT) Upgrade trade logistics infrastructure with a special • Ports and Railways of Mozambique (CFM) Medium to long term focus on access roads to the ports • Cornelder de Mozambique (CdM) • Maputo Port Development Company (MPDC) • Corredor de Desenvolvimento do Norte (CDN) Consider reducing administrative fees • Customs Office (tax authority) Medium to long term • Mozambique Community Network, SA (MCNET) • Kudumba Investments Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 152 Doing Business in MOzAMBIQUE 2019 RESSANO GARCIA Trading across borders Trading across borders score (0-100) 81.31 Cost to export (hours) Time to import (hours) Documentary compliance 16 Documentary compliance 16 Border compliance 79 Border compliance 9 Cost to export (USD) Cost to import (USD) Documentary compliance 70 Documentary compliance 60 Border compliance 245 Border compliance 399 Details Characteristics Export Import HS 17: Sugars and HS 8708: Parts and accessories of motor Product sugar confectionery (sugar vehicles (auto parts) molasses) Trade partner South Africa South Africa Border crossing of Border crossing of Border Ressano Garcia Ressano Garcia Distance (km) 85 85 Domestic transport time (hours) 3.7 3.7 Domestic transport cost (USD) 400 400 Components of Border Compliance Associated Time to complete costs Export (hours) (USD) Clearance and inspections required by customs authorities 28 190 Clearance and inspections required by agencies other than customs 48 20 Port or border handling 5 35 Import Clearance and inspections required by customs authorities 6 285 Clearance and inspections required by agencies other than customs 0 0 Port or border handling 7 114 DOCUMENTS Export Import Commercial invoice Commercial invoice Packing list Packing list Phytosanitary certificate SADC Certificate of origin Certificate of origin Road cargo manifest Road cargo manifest Bill of entry Bank commitment term Customs release order Supervision of packing report Customs import declaration Customs release order Inspection report from scanner Customs export declaration Terminal handling receipts Inspection report from scanner Terminal handling receipts Model 14 TRADE LOCATION PROFILES 153 RESSANO GARCIA Reform recommendations to improve the ease of trading across borders Suggested reform Key players to champion the reform Implementation timeframe Remove the mandatory use of customs brokers and • Customs Office (tax authority) Short term increasing competition in the brokerage profession Streamline customs procedures and apply efficient • Customs office (tax authority) Short to medium/long term risk-based management Fully implement the electronic single window by • Customs Office (tax authority) Creating a paperless environment in the short going paperless, and connect more stakeholders to • Mozambique Community Network, SA (MCNET) term; connecting more stakeholders in the short the platform • Ministry of Agriculture and Food Security (MASA) to medium/long term. • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) Strengthen regional integration through the effective • Ministry of Foreign Affairs Medium to long term implementation of border cooperation and customs • Customs Office (tax authority) union agreements • Mozambique Community Network, SA (MCNET) • Ministry of Agriculture and Food Security (MASA) • Ministry of Industry and Commerce • Ports and Railways of Mozambique (CFM) • Gestão de Terminais S.A. (GT) Upgrade trade logistics infrastructure with a special • Ports and Railways of Mozambique (CFM) Medium to long term focus on access roads to the ports • Cornelder de Mozambique (CdM) • Maputo Port Development Company (MPDC) • Corredor de Desenvolvimento do Norte (CDN) Consider reducing administrative fees • Customs Office (tax authority) Medium to long term • Mozambique Community Network, SA (MCNET) • Kudumba Investments Note: “Short term’’ refers to reforms that could be implemented in less than 8 months. Most short-term reforms do not require the enactment of a new law. For more specific information on each reform, please refer to the “What can be improved?’’ section of each indicator chapter and the table 1.3 of the executive summary. 154 Acknowledgements D oing Business in Mozambique Pinto and Moussa Traoré provided valu- participated in the project and who made 2019 was produced by the able assistance at different stages of the valuable comments during the consulta- Global Indicators Group of the project. Chisako Fukuda designed and tion and data review period. Additionally, Development Economics Vice Presidency led the communication campaign in a special thanks goes to the Directorate of of the World Bank Group. The team was collaboration with Mikael Ello Reventar, Private Sector Support (Direcção Nacional led by Michelle Gomes Souto, Laura Mark Edgar Felsenthal, Rayna Zhang Kafu, de Apoio ao Desenvolvimento do Sector Sagnori Diniz and Mariline Vieira. It and the Sub-Saharan Africa regional and Privado, DASP) of the Ministry of Industry included Luiza Lacerda Bogado, Iria Buxan Mozambican communication teams: and Trade of Mozambique (Ministério da Raposo, Nuno Mendes Dos Santos, Gustavo Carlos Alberto Mahoque, Aby K. Indústria e Comércio, MIC) and its dedi- Cristina Montoya Perez, Monique Pelloux Toure, Rafael Saute and Kofi Tsikata. The cated team to the project: Nicolau L. Sululo, Patron, Miguel Santana and Ana Maria webpage (http:/ /www.doingbusiness.org/ DASP Director; Oswalda Wilson, DASP Santillana. It received continued support mozambique) was developed by Varun Deputy Director; Fabião Fatissone; Gilberto from Adelia Chebeia, Isabela Franco Doiphode, Akash Pradhan and Kamalesh Mabunda and Luis Sitoe. The team also Emerick Albergaria and Luisa Moises Sengaonkar. The report was edited by wish to thank the Provincial MIC Directors; Matsinhe throughout implementation of Janelle Conaway and designed by Gerry the Ministry of Justice, Constitutional the study. The study was prepared under Quinn. and Religious Affairs (Ministério da the guidance of Mierta Capaul and Pilar Justiça e Assuntos Constitucionais e Salgado Otónel. The study was requested by the Ministry of Religiosos); the one-stop-shops (Balcões Industry and Commerce of Mozambique de Atendimento Único); the Registries The team is grateful for the valuable and funded by the UK Government, the of Legal Entities (Conservatórias do comments provided by colleagues across Swiss State Secretariat for Economic Registo das Entidades Legais); the Land the World Bank Group. Raian Divanbeigi, Affairs, SECO and the World Bank Group. and Property Registries (Conservatórias Amina Khaled El Zayat and Francisco do Registo Predial); the Notaries; the Tax Moraes Leitão Campos reviewed the full Data collection was carried out in collabo- Authority (Autoridade Tributária); the text. Experts in each of the five indicator ration with Carlos Martins e Associados General Customs Directorate (Direcção areas measured were consulted during the (CM &A), whose team was led Carlos Geral das Alfândegas); the Ministry of drafting process: Alvaro Federico Barra, Martins, Dércio Eugenio and Katia Jussub. Agriculture and Food Security (Ministério Anna Corsi, Marie-Lily Delion, Maksym The three port operators: the Maputo Port da Agricultura e Segurança Alimentar); the Iavorskyi, Charles Kunaka, Nicholas Development Company (MPDC), the Municipalities (Autarquias); the Supreme Menzies, Frederic Meunier, Sagita Muco, Cornelder de Mozambique (CdM) and the Court (Tribunal Supremo); the Superior Maria Antonia Quesada Gamez, Periklis Northern Development Corridor (NDC) Council of the Judiciary (Conselho Superior Saragiotis, Erick Tjong and Ines Zabalbeitia provided statistics and allowed the visits da Magistratura Judicial); the Provincial Mugica. of the ports. Courts (Tribunais Judiciais das Províncias) and the National Institute of Statistics Mark Lundell (World Bank Country About 300 lawyers, conveyancers, freight (Instituto Nacional de Estatistica). Director), Rita Ramalho (Senior Manager, forwarders, customs brokers, logistics Global Indicators Group), Jumoke Jagun- companies and public officials, such as The names of those contributors wishing Dokunmu (Director) and Carolin Geginat registrars, notaries, judges and court to be acknowledged are listed on the (Program Leader) provided guidance clerks contributed to the Doing Business following pages and online at http://www. and leadership. Gina Cárdenas Varón, in Mozambique 2019 report. The project doingbusiness.org/mozambique. Lilla Marta Fordos, Marko Grujicic, Ryan team extends its special thanks to the Kenma, Madalina Papahagi, Marion national and local government officials who Acknowledgements 155 PRIVATE SECTOR Sofala, Beira Mussage Chirunguze PORT OF NACALA Maersk Mozambique, LDA CONTRIBUTORS Daniel Pereira Adolfo Sabonete Gilberto Correia - Advogados e Paula Maciel Manica Freight Services (Mozambique) Starting a business Consultores, LDA CMA CGM S.A. Registering property Joaquim Pereira Rogério Chicumbe Albino Dimene Manica Freight Services (Mozambique) A.S.G.D. Despachante Aduaneiro Enforcing contracts Joaquim Tesoura S.A. Aline Gama Afonso CF&JT, Advogados, LDA Sidik Serage GARP - C.F. Gama Afonso Despachante Cabo Delgado, Pemba Laurinda Quinalda Matshinhe Oficial LDA Mediterranean Shipping Company MSC Anifa Megji Jorge Ucucho e Pedro Abreu, Sociedade de A dvogados Timoteo Samunda Angelino Nhacalangue Arsénio Moisés Cavele Mediterranean Shipping Company MSC GARP - C.F. Gama Afonso Despachante Mario Pereira Oficial LDA Hermenegildo Pedro GC-AC LDA PORT OF MAPUTO Brassonílio Goncalves Manhique Rafael Artur Rafael Tete, Tete Aline Gama Afonso Transitex Mozambique, LDA. Gilberto Correia Advogados & Consultores, LDA Hélder Vicente João Manuel GARP - C.F.Gama Afonso Despachante Celso Augusto José Chapamba Oficial LDA Intertek International Ltd - Teófilo Emilio Schreiber Angelino Nhacalangue Government and Trade Services Teófilo Emílio Schreiber Manuel Roberto Catequeta GARP - C.F.Gama Afonso Despachante Mozambique Maria Carneiro Oficial LDA Gaza, Xai-Xai Chipo Nyahuye SK Advogados, Sociedade Unipessoal, Avelar da Silva DSV Air & Sea, LDA Andrea Oliveira LDA Intertek International Ltd. - Danilo Morgado Dan Roberto Mateus Cuamba Shishir Kanakrai Government and Trade Services PBT & associados despachantes SK Advogados, Sociedade Unipessoal, Mozambique Deonildo Nhamtumbo aduaneiros , LDA LDA Lucio Neto Carolyn Kathewera Denilson Hamide Van de Veldes Fanuel Zeca Fombe Safmarine / Maersk Mozambique LDA Necpres, LDA Corredor de Desenvolvimento do SK Advogados, Sociedade Unipessoal, Dixon John Noé Chongo Norte, S.A.R.L. Maria da Gloria Mussuei Budula LDA Dixon Chongo & Associados Estêvão Júnior Buque Inhambane, Inhambane ZambEzia, Quelimane Portos do Norte S.A. Élia dos Reis Manhiça Abilio Arao Macuacua Anatásio Nhomela Élia Reis LDA – Despachante Aduaneiro Ibrahimo Assumane Henrique Massunga Anhomela advogados & Consultores Florentina V. Alberto Manica Freight Services (Mozambique) FVA – Despachante Aduaneira S.A. Hílofero Conceição Jubeida Bassir Cerebrus Juridicus, E.I. C. Foquiço & J. Tesoura Advogados, Fulgêncio Dimande Karina Carneiro LDA Manica Freight Services (Mozambique) Pacific International Lines PIL Jaime Magumbe Magumbe - Advocacia e Consultoria S.A. Loni Shott Jurídica, E.I. Trading across borders Hector Sousa Portos do Norte S.A. TIBA Group Luis Machado Manica, Chimoio PORT OF BEIRA Liana Utxavo Portos do Norte S.A. André Joaquim Júnior Aline Gama Afonso Manica Freight Services (Mozambique) Luis Rodrigues AJ Jurista, Consultoria e Advocacia GARP - C.F.Gama Afonso Despachante S.A. Oficial LDA Intertek International Ltd - Linda Paulo Cumbane Government and Trade Services MAPUTO CITY, MAPUTO Angelino Nhacalangue Mozambique Safmarine / Maersk Mozambique LDA Abdul Magid Mya Osman Mussa GARP - C.F.Gama Afonso DespachanteOficial LDA Loid Milton Maria Stela Nhanombe A.M. Advogados limitada Bolloré Transport & Logistics Maria Stela Felizardo Fumo Nhanombe Augusto Chivangue Anselmo Guila – Despachante Aduaneiro & Serviços Cornelder de Mozambique Madalena dos Anjos Chambul Carlos Vilanculo Madalena dos Anjos Chambul – Mário Moura CFA Advogados Associados Bernardo Barros Marques Corredor de Desenvolvimento do Despachante Aduaneira, LDA GARP - C.F.Gama Afonso Despachante Norte, S.A.R.L. Kheyser Gafur Oficial LDA Neusa Monjane Saranga Gafur, Govan & Associados - Sociedade Sociedade de Desenvolvimento do Porto Matias Sonjo de A dvogados Boniface Mutiso Maersk Mozambique, LDA. de M aputo (MPDC) Bolloré Transport & Logistics Mahomed Jussub Mark Neel Pedro Mendes Elton Narciso Bolloré Transport & Logistics Nipul Goval DP World Maputo ENADAL Gafur, Govan & Associados - Sociedade Osório Lucas Roberto Azarias Nhate Germain Kablan GARP – C.F. Gama Afonso, de A dvogados Sociedade de Desenvolvimento do Porto Pacific International Lines de M aputo , MPDC Despachante Oficial, LDA Nampula, Nampula José Marques Osvaldo Fernandes Rungo Matavata Carlos Coelho Intertek International Ltd - Intertek International Ltd. - CMA CGM Government and Trade Services Government and Trade Services Carlos Coelho Advogado e Sheila Victoria Mozambique Mozambique Consultores Portos do Norte S.A. Letícia Ferreira Soraia Abdula Isidro Asanne Júnior Simon Kanjanga Cornelder de Mozambique Sociedade de Desenvolvimento do Porto Carlos Coelho Advogado e Mediterranean Shipping Company MSC Consultores Maria Bande de M aputo , MPDC Transitex Mozambique, LDA Zuneld Farinha Tiago Martins Niassa, Lichinga Pacific International Lines PIL Miguel de Jenga Transitex Mozambique, LDA Alberto Langa Cornelder de Mozambique Tejas Nataraj Langa advogados consultores e Mohssina Suleman DP World Maputo serviços SUL Safmarine Billy José Julane 156 Doing Business in MOzAMBIQUE 2019 RESSANO GARCIA PUBLIC SECTOR Mercilavia Renato Manuel Sitoe Santos C. Azevedo LAND BORDER Conservatória de Registos Autoridade Tributária CONTRIBUTORS Aline Gama Afonso Momede Mujavar Teófilo Mendonea GARP - C.F. Gama Afonso Starting a business Notário Direcção Provincial de Trabalho e Despachante Oficial LDA Segurança Social Registering property Paulo Manecas Angelino Nhacalangue Enforcing contracts Autoridade Tributária MAPUTO CITY, MAPUTO GARP - C.F. Gama Afonso Rachel Moujane Despachante Oficial LDA Arafat Nadim J. Zamila Cabo Delgado, Pemba Tribunal Judicial Provincial Conservatória de Registos Aulivio João Chambe Barcismo Alfredo Saturio Castigo Claudina Kawiri Nacivila GARP – C.F. Gama Afonso, Despachante Oficial, LDA Inspecção Nacional das Actividades Autarquia Imprensa Nacional Económicas Cândido Timana Tiago Langa Drª. Memuna Veríssimo Belmiro Casimiro Autarquia Röhlig-Grindrod Tribunal Judicial Provincial Balcão de Atendimento Único Florentina V. Alberto Inhambane, Inhambane Fátima Baronet Constantino Chichagua FVA Despachante Aduaneira Conservatória de Registos Autarquia Antonio Checanhaza Fulgêncio Dimande Direcção Provincial de Indústria e Felismina Matiquite Dimantino Da Silva Comércio Manica Freight Services (Mozambique) Autarquia S.A. Cartório Notarial Arnaldo Chirinze Fortunato Cossa Gabriel Timana Dr. Ussene Anli Direcção Provincial de Trabalho e Autarquia Röhlig-Grindrod Autarquia Segurança Social Gumerzindo Teimizira Hector Sousa Fátima de Carvalho Correia Benedito Eduardo Guimino Chibequete Autoridade Tributária TIBA Group Autarquia Autarquia Iva Francelina Pondja Maria Isaac Mangue Benilde Macuamule Tribunal Judicial Provincial Fatima Opressa LBH Mozambique Balcão de Atendimento Único Direcção Provincial de Indústria e Jafar Guana Ivan Fernandes Comércio Cláudio Castelo Branco Direcção Provincial do Trabalho, Dixon Chongo & Associados Autoridade Tributária Emprego e Segurança Social Florêncio Chavango Joaquim Oliveira Direcção Provincial de Indústria e Dorte Eduardo Gueze João Zatinta Intertek International Ltd - Comércio Autarquia Balcão de Atendimento Único Government and Trade Services Estevão Horácio José Roger S. Domingos Mozambique Josefa Amélia Massinga Autoridade Tributária Tribunal Judicial Provincial Autoridade Tributária Junaide Mussa Geraldo das Neves Morane Neusa Massicame Juma Barron Domingos Pais Dixon Chongo & Associados Autoridade Tributária Autoridade Tributária Autarquia Liana Utxavo Luis Matola Olimpia Bernardo Manuel Furvela Manica Freight Services (Mozambique) Autoridade Tributária Autarquia Autoridade Tributária S.A. Mário Sumburane Marcia B. Pais Suzana Chaemussene Maria Jose Ali J.Faife Despachante Aduaneiro Wazire Saide Autarquia Direcção Provincial do Trabalho Mozer Rolando Autarquia Victor Macuácua Maria Tcheco LBH Mozambique Balcão de Atendimento Único Autoridade Tributária Gaza, Xai-Xai Osvaldo Fernandes Ossemane Narcy Abílio A. Chichava Manica, Chimoio Intertek International Ltd - Autarquia Government and Trade Services Instituto Nacional de Segurança Abias Armando Social Cartório Notarial Safira Salomão Maiacana Mozambique Autarquia Paulino Cumbane Arão Salvador Cumbe Adriano Jaime Jojo Balcão de Atendimento Único Conservatória de Registos Sidónio dos Santos DHL Mozambique Direcção Provincial de Indústria e Simeão Ernesto Manhiça Carla Chiluvane António José Raul Comércio GARP – C.F. Gama Afonso, Balcão de Atendimento Único Autarquia Vitaliana Macuacua Despachante Oficial, LDA Dr. Fernando Bila Dr. Ernesto Mueha Conservatória de Registos Tiago Martins Tribunal Judicial Provincial Tribunal Judicial Provincial Xavier Timane Transitex Mozambique, LDA Estevão Manhacha Estevão Muampale Balcão de Atendimento Único Venâncio Victor Gonemoda Direcção Provincial de Indústria e Balcão de Atendimento Único Comércio Zacarias Mucambe LBH Mozambique João Castro Cunhete Conservatória de Registos Eusébio Napasso Conservatória de Registos Autarquia Nampula, Nampula João Domingos Chale Gabriel Carlos Muthombe Bacar Bramuge Junamina Balcão de Atendimento Único Autarquia Direcção Provincial de Trabalho e João Zacarias Moiouachen Segurança Social Ilidio Malate Autoridade Tributária Autoridade Tributária Carlos Mussa Maria José Moiane Autoridade Tributária Jacques Nhatave Tribunal Judicial Provincial Conservatória de Registos Castigo José Castigo Mario Fernando Roce Balcão de Atendimento Único Joaquim José Autarquia Direcção Provincial Dr. Alberto Assane Ronaldo Francisco Pedro Naico Tribunal Judicial Provincial Lúcia Albertina Matimele Humbane Direcção Provincial de Indústria e Direcção Provincial de Indústria e Hermenegildo Chanhuca Comércio Comércio Balcão de Atendimento Único Acknowledgements 157 Humberto Felise Ninlonoi Sofala, Beira Manuel Celestino Serno PORT OF NACALA Tribunal Judicial Provincial Abel Mouzinho Instituto Nacional de Segurança Estevão Madeira Social Jair Matos Autarquia Autoridade Tributária Conservatória de Registos Nicols Rafael Jamal Adilson Mendes Gandi Uaheia Autarquia Lenini Vilares Balcão de Atendimento Único Autoridade Tributária Autarquia Pedro Chambal Alberto José Zendera Lino Nhamizinga Tribunal Judicial Provincial Limo Almeida Conservatória de Registos Autoridade Tributária Autoridade Tributária Rosa João Bernardo Matainhe Selso Ngonhamo DAF Manuel Maquia Direcção Provincial de Indústria e Autoridade Tributária Tribunal Judicial Provincial Comércio ZambEzia, Quelimane Norberto Narciso João Bibiana Jalaph RESSANO GARCIA Adriano Ernesto LAND BORDER Direcção Provincial de Indústria e Balcão de Atendimento Único Autoridade Tributária Comércio Binilda Uainda Aly Malla Ana A. Francisco Autoridade Tributária Óscar Basilio Autoridade Tributária Conservatória de Registos Tribunal Judicial Provincial Drª Ana Paula Muanheue Gonçalves Mandava Clecia da Caridade Autoridade Tributária Ricardino Gabriel Rosmo Tribunal Judicial Provincial Autarquia Tribunal Judicial Provincial Emanuel Becape Osvaldo Correia Elsa Cassamo Autoridade Tributária Rosário António Autarquia Cartório Notarial Conservatória de Registos Eugénia Júlia Emílio Carlos Soverano Impissa Saíde António Muimela Autarquia Autarquia Tribunal Judicial Provincial Ibraimo Mussagy Fernando Sá Carunlo Samuel Dias Siuire Balcão de Atendimento Único Balcão de Atendimento Único Autarquia João Naipa Jubete José André Caribo Sandro Monteiro Conservatória de Registos Conservatória de Registos Autoridade Tributária José Luis Jocene Maca Andate Tapu Kará Direcção Provincial de Justiça Conservatória de Registos Autarquia Josefa Sing Sang Momade Juizo Teresa Luis Direcção Provincial de Indústria e Comércio Direcção Provincial de Indústria e Cartório Notarial Comércio Ussane Momada Faquirá Maria Paula Jonateine Teófilo da Fonseca Bolacha Autoridade Tributária Balcão de Atendimento Único Tribunal Judicial Provincial Zacins Bernabé Natércia Bata Vera Júlio Godinho Tribunal Judicial Provincial Autarquia Balcão de Atendimento Único Niassa, Lichinga Tete, Tete Trading across borders Almiro Armando Abreu M. Coutinho Autarquia Direcção Provincial de Trabalho e Segurança Social PORT OF BEIRA Benjamim Tombaiomba Aly Malla Direcção Provincial de Trabalho e Amiel Paulo dos Santos Autoridade Tributária Segurança Social Autarquia António Agostinho Mbalane Daniel Matola Ana Inês Luis Mourão Madeira Piquitai Autoridade Tributária Autoridade Tributária Tribunal Judicial Provincial Gonçalves Mandava Dr. Leonardo Mualia Arnaldo João Teimoso Autoridade Tributária Tribunal Judicial Provincial Autoridade Tributária Óscar Queirós Rodrigues Pulseira Fidélio Rosse Salamandane Autoridade Tributária Direcção Provincial de Indústria e Celso José Domingos Comércio SPT PORT OF MAPUTO Paula Ruth Matio Domingos I. Vicente Direcção Provincial de Indústria e Aly Malla Balcão de Atendimento Único Comércio Autoridade Tributária Sérgio Inácio Chauque Domingos S. Macajo Antónia Vaz Conservatória de Registos Balcão de Atendimento Único Ministério da Agricultura e Segurança Sérgio Sargene Nanune Alimentar Balcão de Atendimento Único Dulce Fernando Simbo Cartório Notarial Armando Marcos Come Sr. Sadique Ministério da Agricultura e Segurança Conservatória de Registos Emilio Jassitene Alimentar Autarquia Tânia Acebe Atabo Gonçalves Mandava Direcção Provincial de Indústria e Ivan Ismael TaiboIuri Taibo Autoridade Tributária Comércio Conservatória de Registos Hermínio Manhamanha Victor Vilanculo João M. Bola Autoridade Tributária Tribunal Judicial Provincial Balcão de Atendimento Único Miguel Agostinho Guila Zainadino A. Bacar João Machava Autoridade Tributária Autarquia Direcção Provincial de Indústria e Comércio Lismo Baera Junior Conservatória de Registos Ministério da Indústria e C omércio