Supplying Mozambique’s LNG projects: the 2026 guide for foreign companies

The main projects, in one table

All of them sit in the Rovuma Basin off Cabo Delgado, in the far north of the country. Two are onshore plants on the Afungi peninsula near Palma; two are floating units moored offshore, grouped in one row below because Coral Norte replicates Coral Sul under the same operator. Dates and contractors are detailed, with sources, in Projects, timeline and contractors.

Who needs a Mozambican presence, and when

There is no single threshold, but three situations usually settle the question.

• Work connected with Mozambique beyond a short mobilisation. Since 2026, the Corporate Income Tax Code (IRPC Code) has included permanent establishment tests for construction, installation and assembly sites lasting more than 90 days, and for services continuing within Mozambican territory for more than 90 days in aggregate in any twelve-month period. For services, the wording includes situations without physical presence and excludes digital services. Other cases under article 3 and any applicable double tax treaty must also be considered; invoicing from abroad or working remotely does not settle the question by itself.
• Your client’s contract or the procurement regime requires a local entity. Under the Local Content Law, goods and services in the exclusivity regime must be bought from Mozambican companies that meet its tests, the preference regime gives qualifying Mozambican and preferred persons a price advantage of up to 20% without excluding foreign bidders where local supply is unavailable, and the new Petroleum Law requires foreign service providers to associate with Mozambican persons.
• Your client requires local invoicing, or billing from abroad costs more than it saves. Concessionaires and EPC contractors commonly require suppliers with activity on site to invoice in meticais with Mozambican VAT, run payroll in the country and hold a local licence. Billing from abroad instead means a final withholding on the gross invoice: 20% under the general rule, or 10% for services connected with the concession contract under the petroleum regime, by law (Law 27/2014 as republished by Law 14/2017, art. 28 no. 2) or under the Area 1 and Area 4 concession contracts (art. 11.4(e)), whose conditions are set out in the tax guide. Which rate applies depends on the taxpayer, the services and the contract, not on a supplier’s position in the chain.

Pure equipment exports to Mozambique, delivered and invoiced from abroad with no local activity, generally do not require an entity. Once people, equipment or a site office are in the country for a sustained period, the analysis changes. A single contract that bundles equipment with installation, commissioning or supervision in Mozambique has to be analysed as a whole: the on-site services can create a permanent establishment, and the tax authority may then seek to attribute to it income from the whole contract, including part of the supply price. Where supply and services are split into separate contracts, the split must be genuine and priced at arm’s length.

Choosing the vehicle: subsidiary, branch or partnership

National participation is a question of capital composition, not of legal form: an Lda or an SA can both have Mozambican shareholders, and status under the Local Content Law (Mozambican legal person, preferred person) follows the legal requirements and the substance of the arrangement, not the company type. Where a partnership is chosen, governance, profit split and exit must be agreed up front.

In our experience, set-up of an Lda or SA takes four to eight weeks once the parent’s documents are duly legalised and translated into Portuguese, according to the country of origin and the requirements of the registry (Mozambique is not a party to the Apostille Convention, so consular legalisation is usually needed): name reservation, articles of association, commercial registration with the beneficial ownership information required by the Commercial Code (art. 99), publication, tax number (NUIT), the activity licence, social security registration and bank account. Commercial registration, the activity licence, foreign-trade operator registration where applicable, local content certification and the client’s prequalification are separate steps; none replaces another. The timing depends on document readiness, the licence required for the activity and the bank’s own checks. Foreign capital should be registered under the exchange legislation at entry, because that registration is what later supports the transfer of dividends and capital; the investment regulation sets a minimum foreign direct investment of MZN 6.5 million in equity contributions from the investor for that guarantee (Decree 8/2024, art. 4).

Local content: what Law 9/2026 changes

Law 9/2026 of 3 June 2026 is the first dedicated Local Content Law for petroleum operations, approved alongside the new Petroleum Law (Law 8/2026). It applies to concessionaires, their contractors and every entity that contracts with them, and it ranks bids by local content before price. The points that matter most for a foreign supplier:

• Who you are: a Mozambican legal person is one registered in Mozambique with its seat and effective management there; a preferred person is a national legal person with at least 20% Mozambican capital and a predominantly Mozambican workforce and payroll. There is no 51% rule.
• How you are ranked: three procurement regimes (preference, exclusivity and free market). Under preference, a qualifying Mozambican supplier wins with a price up to 20% above the lowest comparable foreign bid. Exclusivity applies to goods and services with at least 80% national production factors, 20% Mozambican capital and 50% Mozambican payroll.
• How it is enforced: a Local Content Authority approves procurement plans, accredits certifiers, publishes the list of certified suppliers, inspects and fines (USD 50,000 to USD 300,000; 1% to 10% of the contract for false information). The Council of Ministers approved the regulation and the Authority’s statute on 13 October 2026; as of 18 October the published text, decree number and entry into force had not been confirmed.

The definitions, the three regimes, the structures that fit each and the penalties are explained in the Local Content Law guide.

Tax: the headline rates for suppliers

Four topics recur in tax audits: transfer pricing documentation for intra-group charges, VAT on imported equipment outside the project’s exemption list, VAT self-assessed on services acquired from non-residents (reverse charge), and withholding on offshore invoices settled late, which the tax authority then assesses on the Mozambican payer. The tax guide for subcontractors covers the rules, the 2026 changes and the compliance calendar.

People: quotas, hiring regimes and payroll

Foreign staff are limited to a share of headcount. The Labour Law sets 15% for micro employers (up to 10 workers), 10% for small (11 to 30), 8% for medium (31 to 100) and 5% for large employers; the petroleum and mining regulation (Decree 63/2011) uses 10% up to 10 workers, 8% from 11 to 100 and 5% above 100. Within the quota, hiring requires notification to the labour authority; outside it, a work authorisation is required. Short-term work is possible for up to 120 days a year under the general regulation (Decree 88/2024) and up to 180 days in petroleum and mining. The Area 1 and Area 4 projects have a regime of their own under Decree-Law 2/2014: the aggregate quota of foreign staff for each project, including contractors and subcontractors, is fixed in the workforce plan approved with the development plan; hires within it are made by prior notification and a further notification within 15 days of entry, short-term work runs up to 180 days a year, and hires beyond the plan need a work authorisation (arts. 18 and 20). Immigration (visa and residence) and tax residence are separate frameworks with their own rules.

Employees on the Mozambican payroll are subject to monthly personal income tax (IRPS) withholding and to social security (INSS) contributions of 4% from the employer and 3% from the employee. Foreign workers covered by another country’s social security system are not required to register with INSS, but the exemption requires proof of that coverage to be provided to INSS: a certificate authenticated by the Mozambican consulate in the country of origin, or whose conformity with the issuing country’s formalities is declared by the competent authority (Decree 51/2017, art. 4). A foreign beneficiary who permanently leaves Mozambique before becoming entitled to a pension may request a refund of the contributions paid in their name to the pension branch, provided INSS has not concluded a bilateral social security agreement with their country of origin; the request must be made within one year of the payment date of the last contribution (art. 123 nos. 3 and 4). The regimes, timings and the 2026 residence rules are in Work permits and payroll.

Transferring profits and capital abroad

Mozambique operates exchange controls under the Exchange Law (Law 28/2022) and the Bank of Mozambique’s Notice 3/GBM/2024. The documents depend on the nature of the transfer: dividends and other investment income, interest, repayment of loan principal and payments for imported services each have their own rules (arts. 37 and 51 to 56). For dividends of foreign direct investment the bank checks the exchange registration of the investment, the shareholders’ resolution approving the distribution, proof that the tax obligations relating to the transaction have been met and, where applicable, an independent auditor’s declaration on the profits (art. 52). Payments for services billed from abroad do not depend on a registered equity investment, but do require evidence of compliance with the relevant tax obligations. Treaty relief on withholding must be requested on the official form by the time the taxable event occurs (Ministerial Diploma 113/2006, art. 2), and since 2026 that event can be the recognition of the cost, before the bank transfer; otherwise tax is withheld in full and can be reclaimed within two years counted from the taxable event (art. 3). Plan the transfer route when you set up, not when the first dividend is declared.

A realistic sequence for a new supplier

1. Weeks 1 to 2: decide the vehicle and the partner structure against the Local Content Law definitions; collect and legalise parent documents; reserve the name.
2. Weeks 3 to 8: incorporate and file the beneficial ownership information, register for tax and social security, open the bank account, register the foreign investment, obtain the activity licence. Timing depends on documents, licence type and bank checks.
3. From week 6: register on the operators’ and EPC contractors’ vendor portals; start local content certification once the Authority’s procedure is available; file work authorisations for the first expatriates, which take longest.
4. From the start of activity and hiring: run payroll, file the applicable returns and payments, and keep transfer pricing and local content records from the first transaction.