The Mozambican and French governments have signed in Maputo an agreement on the reciprocal protection of investments.
The agreement was signed by Mozambican finance minister Luisa Diogo and by French ambassador Bernadette Lefort.
The agreement is supposed to encourage businesses of each country to invest in the other, and to stimulate the transfer of capital and technology.
After the signing, Diogo said that the agreement provided added stimulus for French investors to put their money in Mozambique. But even without the agreement, there was considerable French private investment in Mozambique “which shows that investors were already confident about the country,” she added.
The agreement has been negotiated over a period of 11 years, and France is the latest in a series of countries to reach this sort of agreement with Mozambique.
The agreement also avoids dual taxation. “We are entering on a reform of our direct taxes,” said Diogo, “and we want to ensure that our efforts to broaden the Mozambican tax base do not mean that foreign investors have to pay their taxes twice.”
Under the agreement, investors are guaranteed that they will pay taxes only once – either in their country of origin, or in the country where the investment in made.
“These agreements are very important for promoting investment,” added Diogo, “because they reassure the investor, since he knows that nothing can happen to his investment, or if it does, he will be compensated.”