In conversation with Paula Duarte Rocha, Founding Partner at HRA Advogados, Mozambique

  • Paula Duarte Rocha is one of the founding partners of HRA Advogados, a full-service legal firm in Mozambique. HRA Advogados is one of Afriwise’s contributing firms in Mozambique, where our platform went live this week.

    For the first time, businesses operating in the country will have continual access to vital legal, business and regulatory information in one place. The platform is set to drastically reduce the time and money organisations spend on sourcing business-critical information for Mozambique.

    Paula has worked in Maputo all of her life, her core practice has been in the areas of general business law, banking, project finance, energy (mining and oil and gas) and public infrastructure. Paula is also a registered arbitrator with the Centre for Arbitration, Conciliation and Mediation (CACM) in Mozambique.

    Last week we caught up with Paula to discuss our new partnership and get her thoughts on the current legal and regulatory environment in Mozambique. Here's what she had to say...

    Afriwise: Paula, it is great to chat with you today and we are delighted to have partnered with your firm in Mozambique. To kick us off, it would be great to hear why HRA Advogados has decided to partner with us?

    Paula: Contributing to and participating in the platform allows us (HRA Advogados) to share our expertise in a wider format (with peers, clients and potential clients) without paying to be published as is standard in the legal industry, bringing more exposure to our firm and our lawyers and increasing our access to international companies subscribing to the platform – without the usual “intermediation” by international law firms.

    Afriwise: There’s clearly a lot going on in Mozambique at the moment. The LNG project is at the forefront of everyone’s minds currently.  For international firms participating in the project, what are the key bits of advice you are giving from a tax and immigration perspective?

    Paula: The Mozambican oil and gas sector legislation has undergone various updates, largely led by the major discoveries of natural gas in Area 1 and Area 4 of the Rovuma Basin. Legislation has been adapted to align with international  oil and gas industry standards and to help create a competitive legal environment.

    Of particular interest in this context is the “Rovuma Basin Decree Law” (Decree-Law no. 2/2014, of 2 December 2014), which establishes a special legal and contractual framework applicable to LNG projects carried out in Area 1 and Area 4 of the Rovuma Basin. Special provisions of the Rovuma Basin Decree Law prevail over the general rules laid down in the Petroleum Law and Petroleum Regulation and can override such general provisions.

    Legal and tax benefits are guaranteed in connection with petroleum operations. In addition, and in general, withholding tax rates may be reduced by the application of a tax treaty with Mozambique.

    In terms of immigration, the recruitment of foreign citizens must be carried out in accordance with the investment projects regime approved by the Government, thus underlying that the overall aggregate foreign workforce in Mozambique for entities operating in the Rovuma Basin (including contractors and subcontractors) is subject to negotiation with the Government. Contract formalities for foreign citizens under these projects are also more simplified.

    Afriwise: That’s a really useful overview, thank you. Are there any other sectors that you have been seeing a lot of activity in in recent years?

    Paula: The energy and power generation sectors have a lot of potential in Mozambique. The availability of energy resources including hydro, natural gas and coal, plus the geographical positioning of the country gives Mozambique a privileged, strategic position and role in the regional energy sector.

    Projects most concretely discussed are the Mphanda Nkuwa and an expansion to Cahora Bassa. The Gigawatt project and the Central Termoeletrica de Ressano Garcia (CTRG) power plant jointly owned by Sasol and EdM are also of interest and attracting investors.

    More recently, an agreement was signed between the Mozambique government, the French oil and gas company Total and the South African Gigajoule Group, envisaging construction of a gas-fired thermal-electric power plant capable of generating 2000 megawatts of electricity in Beluluane Industrial Park in the Maputo province. The project is valued at approximately USD 700 million.

    Afriwise: Are there any particular regulatory or legislative changes on the horizon that you are advising clients on?

    Paula: Yes, approval of the “local content” legislative package and imminent changes to the Commercial Code will bring changes to the investment landscape in Mozambique. However, no final and consistent drafts are yet available.

    Afriwise: We will of course be following this legislation closely too and updating our platform accordingly.

    Obviously, it has been a difficult year with COVID-19. Mozambique's state of emergency officially ended on 29th July but you are still required to follow strict protocal to curb the spread of the virus. Do you think from a business perspective that COVID-19 will see law firms accelerate technologization of their operations in Mozambique?

    Paula: Very much indeed. A trend has been set in Mozambique over the past 4 months or so where remote work, meetings and seminars are now the rule. Even when engaging with certain public authorities.

    In HRA Advogados’ particular case, it has been interesting to see that working hours have been extended, with lawyers starting work earlier (at home) and more than often continuing working long after close of business. It is as if the time gained by not having to engage in traffic and/or the reduced staff in the office is rendering everyone more efficient.

    Afriwise: That is definitely the impression we are getting from conversations with other firms too. Finally, we want to finish with asking you, what are your top two tips for any company looking to invest in Mozambique?

    Paula: Always engage with a local lawyer/law firm and ensure that you understand the laws and legal framework. Avoid shortcuts for engagement with public authorities and be patient and committed to your long-term project as bureaucracy is an undeniable reality in Mozambique.

    Operating in Mozambique? Book a demo now to learn more about how Afriwise can help your business.