Mozambique Introduces Regulations on Alternative Investment Funds

Maputo, Mozambique - The government of Mozambique has introduced new regulations aimed at regulating the financial sector by prohibiting originating from alternative investment funds (AIFs) in the country.

Prohibitions and Restrictions

• AIFs are not permitted to borrow money under their management, with exceptions for short-term loans that do not exceed 10% of the fund’s global value.
• Assets of an AIF can only be encumbered to secure loans under specific conditions.
• Borrowing by AIFs is subject to strict requirements and regulatory oversight.

Asset Holding and Management

• Assets of an AIF must be entrusted to a single depositary, such as commercial banks and investment banks operating in Mozambique.
• This ensures that assets are securely held and managed in accordance with regulatory requirements.

Disclosure Requirements

• AIFs are required to provide information to prospective investors, including:
  • Details on their legal documents
  • Fund managers
  • Other service providers
• However, the identity of investors is not subject to public disclosure.

Reporting Requirements

• AIFs must submit annual and biannual accounts.
• Monthly inventory of the fund’s asset portfolio must also be submitted.
• Any side agreements that breach these regulations will be deemed illegal and may result in administrative offense proceedings.

Taxation

• AIFs are subject to the general tax regime in Mozambique, with a corporate income tax rate of 32%.
• Investment managers and advisers are also subject to this tax rate.
• Pension funds are taxed similarly to resident investors.

Goals and Objectives

The new regulations aim to:

• Increase transparency and accountability in the financial sector
• Protect the interests of investors