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1 Year 2017 N.º 29 Monthly Publication run 500 Free Distribution The opinions expressed by the authors of articles published herein do not necessarily represent those of Sal & Caldeira Advogados, Lda. CONTENTS Dear Reader: EDITOR S LETTER In this number you can read: The Impracticability of the Investment Activity Visa, Constraints in the hiring of foreign employees in Mozambique (Part 1) and The Border Visa The Impracticability of the Investment Activity Visa Constraints in the hiring of foreign employees in Mozambique (Part 1) The Border Visa We wish you a Happy reading! The first amendments, namely, an increase of the categories of persons eligible for visas and a reduction in the amount of investment, are intended to make the granting of entry visas to foreign citizens involved in investment activities more flexible, aiming at improving the business environment. However...Cont. Pág. 2 Thus, it would be expected that the labor authorities, in their role in the protection of the national workforce, would make efforts to eliminate illegal work in the country, especially of illegal immigrants, given that this is the scenario that contributes towards the unemployment of nationals, and facilitate the legal hiring of qualified...cont. Pág. 3 The Ministerial Diploma No. 228/2005, of 23 November, highlighted 26 border posts empowered to grant border visas, including, but not limited to, border posts at Maputo International Airport, Ressano Garcia, Namaacha, Ponta de Ouro, Goba, Aerodrome of Inhambane and Beira International Airport.Cont. Pág. 4 EDITING, LAYOUTS AND GRAPHICS SÓNIA SULTUANE - REGISTRATION: Nº 125/GABINFO-DE/2005 CONTRIBUTORS: Daniela dos Santos de Brito,Trud Marlene Tembisse, Victória Rumbidzai Sande. TECHNICAL INFORMATION SAL & Caldeira Advogados LDA is a member of DLA Piper Africa Group, an alliance of leading independent law firms working together in association with DLA Piper across Africa. Protect the environment: Please do not print this newsletter unless necessary

2 DA INVIABILIDADE THE IMPRACTICABILITY DO VISTO PARA OF A THE ACTIVIDADE INVESTMENT DE INVESTIMENTO ACTIVITY VISA Introduction In 2014, the Decree No. 108/2014, of 31 December, was approved, which approved the new Regulation of the Law No. 5/93 of 28 December, which establishes the legal regime of the foreign citizen, setting the respective rules on entry, stay and exit from the country, the rights, duties and guarantees ( D108/14 ). Of the various innovations of D108/14, it is important to highlight the introduction of new visas, among them: sporting and cultural activities visas, temporary residence visas and investment activity visas, among others. Recently the Council of Ministers approved amendments to the provisions relating to investment activity visas, through Decree No. 3/2017 of 24 March ("D3/17"). With the amendments introduced, it was expected that this visa would become practicable, as since the approval of the Decree introducing it, i.e. the D108/14, to date it is not yet being issued. However, the changes have made it even more impracticable. Amendment of article 17 (1) of D108/14 The article 17 (1) of D108/14 established that the investment activity visa would be that which would be granted to the foreign investor, representative or solicitor of the investing company, by the Diplomatic and Consular Missions in the Republic of Mozambique and aimed at allowing the entry of its holder in the national territory, for the purpose of implementing investment projects approved by the Council of Ministers of an amount equal to or greater than US$ 50 million. However, this definition has undergone the following changes with the approval of D3/17 namely: a) In addition to the investor, representative or solicitor of the company, the investment activity visa is also granted to the management bodies of the investing company; b) The investment activity visa is now granted for the purpose of implementing projects worth US$ 500 thousand or more, instead of US$ 50 million; and c) In order for the investment activity visa to be granted, it will depend on the compliance with the legal formalities for the hiring of foreign labor. The amendments aimed at increasing the number of persons to whom the visa could be granted, by including the management bodies of the investing company, reducing the amount of the investment for the purpose of granting the visa and including the formalities for the hiring of foreign labor for the granting of the same. The first amendments, namely, an increase of the categories of persons eligible for visas and a reduction in the amount of investment, are intended to make the granting of entry visas to foreign citizens involved in investment activities more flexible, aiming at improving the business environment. However, the same cannot be said about the amendment concerning the compliance with the legal formalities for the hiring of foreign labor. The requirement of legal formalities for the hiring of foreign labor in order for the investment activity visa to be issued makes the granting of the visa more difficult, in the sense that these formalities involve the issuance of the work communication or work permit which are lengthy processes and are not in line with the dynamism of the business/investment sector. In this way, if the visa process has to depend on the issuance of work communications or work permits, its issuance will be delayed, since the commencement of these communication/work permit processes depends on, in general, documents that involve other procedures per se, such as tax quitclaim certificates, employees list, certificate of equivalence, opinions from the competent authorities, among other documents that must be organized, before submission to the labor authorities, and are also dependent on a slow procedure by the labor authorities, after submission before them. It thus follows that the amendments introduced by D3/17, in relation to the increase in the categories of persons eligible for visas and the reduction of the amount of the investment are of no avail, as investors will encounter the barrier of hiring procedures for the granting of this visa. As much as it is understood that for the granting of this visa, at least a short-term work communication should be presented, we would still be faced with an impracticability, at least partially, when we analyze the period allowed by law, to make use of short-term work communications, namely 90 days per year or 180 days per year, in the case of mining or oil projects. However, the practicability of this visa may be provided if it is understood that the investment project, duly approved as a conditio for the issuing of the visa, is sufficient for the categories of individuals established by law, if there is proof of that quality. Moreover, this interpretation can be supported by Article 17 (3) of D108/14 which establishes that in the case of a "request made in the national territory, the visa is granted by the Immigration Services, by means of an authorization of investment term issued by the competent authority". In this provision, the only requirement would be the authorization of investment term for the cases in which the application is made in Mozambique, before the Immigration Services. Nonetheless, the above is only a suggestion to make this visa practicable, and it will be up to the authorities to interpret the provisions that introduce the visa, as well as the provisions that provide amendments, in the best way, making it a practicable visa on its granting. Conclusion For the time being, the impracticability of the investment activity visa is related to the fact that, although it was created in 2014, 3 years have passed and it has not even begun to be issued, neither it nor the other visas that the D108/14 has introduced. However, it is not enough to just apply the D108/14, that is, to implement the visa, to make it practicable. To make it practicable, it is necessary to apply it in a way as to facilitate its use by investors for the purpose of implementing investment projects. Ultimately, it should be emphasized that the investment activity visa was created with the intention of being a driving force for investment in Mozambique. Formalities for the hiring of foreigners empresarial, Assembleia Trud Marlene Tembisse Junior Consultant Lawyer ttembisse@salcaldeira.com Therefore, due to the importance of this visa, it is crucial for the authorities to work expeditiously, so that it can begin to be implemented, but in a practicable way, otherwise, if there is no practicability in obtaining this visa for the investor, the purpose for which it was created will not be attained. 02 SAL & Caldeira Advogados, Lda.

3 CONSTRAINTS IN THE HIRING OF FOREIGN EMPLOYEES IN MOZAMBIQUE (PART 1) In Mozambique, the hiring of foreign labor is relevant, especially to meet the need to fill the gaps in the local market of specialized personnel in various areas and training of national workforce. However, despite the need to recruit foreign experts in Mozambique, the law does not facilitate the hiring of the said experts. In addition to the limitations created by the law, namely those established in the Regulation of Mechanisms and Procedures for the Hiring of Citizens of Foreign Nationality, approved by Decree No. 37/2016, of August 31 (the "Regulation"), there are others of an extralegal nature, understood as barriers not deriving from the law, but from the practice, which make even more difficult the hiring of foreign employees in the country. Below, we have only addressed two constraints faced by employers in the hiring of foreign employees in Mozambique, and we promise to address other constraints in a later article. 1. Excessive delays in the issuance of work permits In the light of Article 17 (2) of the Regulation, the deadline for the issuance of work permits is 15 working days, but this deadline is not normally observed by the labor authorities. The reason for the non-observance of the legal deadline by the labor authorities is due to the slowness of the process internally, which requires it to run an extensive circuit, from the date of submission to the issuance of the order. The process begins with the submission of the application at the Labor Directorate of the province where the foreign employee will be carrying out his/her activities, whence, after an analysis of the documents (assessment of the formal process), it is sent to the Ministry of Labor, Employment and Social Security ("MITESS"). In turn, when the process arrives at MITESS, the same is also analyzed by the technicians of the National Directorate of Migratory Work (analysis of material requirements) and is afterwards sent to the Minister of Labor for the order. Once the orders have been issued, they are sent to the respective Provincial Labor Directorate where the processes were submitted, for delivery to the employer. In addition, with the implementation of the Migratory Phenomenon Management System ("SIMIGRA"), the payment of government fees for the hiring of foreign employees began to be made only after the submission of the documents of the process and after the issuance of a payment guide generated online. This payment guide is issued several days after the submission of the process, sometimes weeks, either because of the shortage of technicians to meet the various requests, or because the system sometimes is not operational, which further aggravates delays in the process by the labor authorities. It should be noted that if all the formal requirements for the hiring are not fulfilled, the process is returned by the Provincial Labor Directorate for correction and, if all material requirements are not met, the order issued by MITESS will be rejected. 2. Refusal to issue short-term work communications for NGOs empresarial, Daniela dos Assembleia Santos de Brito Consultant Lawyer dbrito@salcaldeira.com Since February 2017 and without a written notice from MITESS, there has been a tendency, at least already rooted in the Maputo City Labor Directorate, to prohibit the issuance of short-term work communications for NGOs. The Regulation does not prohibit NGOs from making use of the short-term work regime, and it merely states that it "is intended for the carrying out of specific, unforeseeable work involving high scientific or specialized technical and professional expertise." With the above prohibition, NGOs have been unable to hire specialized foreign technicians to carry out specific or unforeseeable activities, since the only regime granted to them, the work permit regime, is lengthy and complex, and is not in line with the precise and momentary needs of NGOs, which are frequent, insofar as: a) they work with projects with a dimension that involves various staff, including from the headquarters, who provide monitoring or support to the local office; and b) the local office is an extension of the headquarters, and the staff is regarded as a single team. It should be noted that the unity of the legal system must be taken into account by the labor authorities and, on this basis, this prohibition should be removed, in as much as, by requesting a work permit for an employee who comes to perform a short-term wok, other problems are created in terms of legalization as to his entry and stay in the country, as well as his exit. Final considerations Although the Government makes efforts to ensure that investment projects include the obligation to train nationals, the need for training of national staff in Mozambique is noted in all areas, not only in the mining and oil fields. Notwithstanding the limitations imposed by the law in the hiring of foreigners, delays on the part of the labor authorities in the issuance of orders, result in qualified foreign citizens awaiting the issuance of the respective orders, being receptive of job offers from other countries and thus the direct training that could be expected, is also compromised. In this respect, the prohibition of the issuance of short-term work communications for employees of the NGOs headquarters also contributes to this reduction of knowledge transfer, as NGOs made use of these documents to enable foreign staff from headquarters to come and carry out specific work, such as training, workshops and seminars for local staff or local partners (Mozambican staff). Thus, it would be expected that the labor authorities, in their role in the protection of the national workforce, would make efforts to eliminate illegal work in the country, especially of illegal immigrants, given that this is the scenario that contributes towards the unemployment of nationals, and facilitate the legal hiring of qualified personnel who can promote employment in the country, simply by complying with the deadlines for issuance of orders as established by law and observing the rules of interpretation and principles of law, in consideration of the unity of the legal system and the specific conditions of the time in which it is applied. 03

4 THE BORDER VISA The introduction of border visa in the Mozambican legal system The border visa was introduced by Decree No. 38/2000 of 17 October ("D38/2000") due to the Government's need to facilitate the movement of foreign citizens in Mozambique and to make the administrative procedures for the granting of entry visas more flexible. According to D38/2000, the border visa allowed a single entry in Mozambique to its holder for a period of 30 days, extendable up to 60 days provided that there was no Mozambican consular or diplomatic representation in the foreign citizen s country of origin. However, according to this Decree, border visas could be granted to citizens of foreign nationality from countries where there were Mozambican consular or diplomatic representations, upon payment of an additional 25% on the overall rate. The new border visa regime empresarial, Assembleia Province Maputo City Sofala Tete Zambézia Border Posts Maputo Seaport Border Post Beira Seaport Border Post Mocumbura Border Post; Biri-Biri Border Post; Vila Nova de Fronteira Border Post; Chingodzi Border Post; and Zumbo Border Post. Quelimane Seaport Border Post Nampula Nacala Porto International Airport Border Post; Angoche Seaport Border Post ; Nacala Seaport Border Post; and Ilha de Moçambique Seaport Border Post. With the approval of Decree No. 108/2014, of 31 December, which establishes the legal regime applicable to foreign citizens ("D108/14"), D38/2000 was repealed. Later, Decree No. 3/2017, of 24 March ("D3/17") amended D108 /14 and thus a new border visa regime was introduced, with the following characteristics: i) Border visas are granted to foreign citizens coming from a country where there is no diplomatic or consular representation of the Republic of Mozambique (as a general rule); ii) Border visas may also be granted to a foreign citizen from a country where there is a Mozambican diplomatic or consular representation provided that Mozambican citizens are afforded reciprocal treatment in respect of entry by the foreign citizen s country of origin (first exception); iii) Border visas may also be granted, for tourism purposes, to a foreign citizen who is from a country where there is an embassy or consular representation of the Republic of Mozambique who, for duly substantiated reasons, was unable to request a visa beforehand (second exception) ; iv) The border visa continues to allow the stay in the country for a period of up to 30 days but it is no longer renewable for 60 days; and v) The border visa is valid for two entries. One relevant observation in the new regime is the fact that is does not establish the payment of an additional 25% on the overall fee for citizens from countries where there is a Mozambican diplomatic or consular representation. Furthermore, in relation to these cases, it is important to note that prior to the publication of D3/17, the granting of border visas to citizens from a country which had a diplomatic or consular representation of the Republic of Mozambique could only occur upon the authorization of the Directors of the Provincial Immigration Services, who had under their jurisdiction border posts which were enabled to issue the border visa. With the changes introduced by D3/17, the Directors of Provincial Immigration Services were dismantled of their discretionary powers regarding the authorization for the granting of border visas to the foreign citizens at border posts enabled to issue the visa, from countries that have Mozambican consular or diplomatic representation. Authorized border posts The Ministerial Diploma No. 228/2005, of 23 November, highlighted 26 border posts empowered to grant border visas, including, but not limited to, border posts at Maputo International Airport, Ressano Garcia, Namaacha, Ponta de Ouro, Goba, Aerodrome of Inhambane and Beira International Airport. With the publication of Ministerial Diploma No. 20/2017 of 2 March 2017, the power to grant the border visa was extended to 18 additional border posts, which are listed below: empresarial, Victória Rumbidzai Assembleia Sande Junior Consultant Jurist vsande@salcaldeira.com Niassa Cabo Delegado It should be noted that Mozambique currently has 44 border posts authorized by law to grant border visas, but we have only listed the most recent authorized border posts above. Final considerations Entre-lagos Border Post; II Congresso Border Post; and Cobué Border Post. Namoto Border Post; Negomano Border Post; and Pemba Seaport Border Post. A notable change to border visas, when compared to the old regime, is that the new regime establishes that the border visa is valid for two entries and has not established a difference in the payment for the granting of the visa, for the different cases for which the granting of visa is allowed. With regard to the amendments made by D3/17, a relevant observation is that it has corrected D108/14, in the sense that it maintains the provision of the former regime which established that a foreign citizen who comes to the country for tourism or recreational activities but has not obtained the tourist visa could be granted the border visa. This is deduced from the fact that D3/17 tacitly removes the discretionary power of the Directors of the Provincial Immigration Services to authorize the issuance of this visa to foreign citizens who come from countries that have a diplomatic or consular representation of the Republic of Mozambique. With the amendment introduced by D3/17, it is understood that the powers previously granted to the Directors of the Provincial Immigration Services are transferred to the officers of the Immigration Services who are in service at the respective border posts, who will be responsible for ascertaining whether the conditions laid down by law to grant the visa are met. Thus, having 44 border posts authorized by law to issue the border visa, as well as the decentralization of powers that we have noted, we believe that the conditions, at least legislative, have been created for the viability of the issuance of this visa. However, it should be noted, that ultimately, in practice, its granting is not yet occurring completely in the manner foreseen by the new regime, due to D108/14 not yet being implemented in its totality, for technological reasons. 04 SAL & Caldeira Advogados, Lda.

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