Presentation on theme: "MGA – Advogados e Consultores. Challenges of the new Regulation of the Right of Periodical Habitation under the Land Law and the Investment Law Jorge."— Presentation transcript:
MGA – Advogados e Consultores
Challenges of the new Regulation of the Right of Periodical Habitation under the Land Law and the Investment Law Jorge Graça Time Share & Fractional Title New Legislation in Mozamique April 17, 2008 – Balalaika Hotel, Sandton, JHB
1. Nature of the rights of periodical habitation (A) Rights of Periodical Habitation scheme (Time share) entail contratual rights, as it is in the case of vacation rigths in tourism developments, which are temporary – up to 25 years (direitos de habitação turística). Rights of Periodical Habitation scheme entail the use and habitation of any accomodation unit in tourism or real estate developments, although for a temporary duration – maximum 50 years (direito real de habitação periódica). Horizontal property may be selected as the enabling legal scheme for the use and habitation rights to be constituted (on individual sections and common parts).
1. Nature of the rights of periodical habitation (B) Fractional Habitation (direito de habitação fractionada) in tourism or real estate developments entail real rights for a temporary duration – more than 15 years - or ownership rights, in perpetuity, as applicable. Co-ownership or shareholding scheme are available as enabling legal schemes for fractional ownership rights to be constituted. Residencial Tourism (turismo residencial), admitted only in tourism or real estate developments within tourism zones, entail ownership rights for a temporary duration (no legal specification) or in perpetuity. horizontal property applicable to tourism residencial. Co-ownership or horizontal property, or shareholding scheme are available as enabling legal schemes for tourism residential rights to be constituted. Tourism and real estate developments, and fractions or autonomous sections therein are urban tenements.
2. Constitution and transfer of rights Rigths of Tourism Habitation (direitos de habitação turística) are constituted and transfereable on the basis of legalized contracts, which signatures of the parties therein must be certified by a notary office. Such rights are in principle freely transfereable, and restrictions may apply if agreed upon contractualy or imposed under any specific license to be granted for a particular development. Real rights of use and habitation on immoveable assets, under Rights of Periodical Habitation (direito real de habitação periódica), and, under Fractional Habitation (direito de habitação fractionada) and Residencial Tourism (turismo residencial), ownership rights on immoveable assets, are constituted and transfereable on the basis of a public deed, which must be followed by the due registration at the relevant real estate office. As urban tenements, tourism and real estate developments, and fractions or autonomous sections therein, are freely transfereable, provided that the applicable statutory defined requisites are meat. Regarding urban tenements – within the legal framework under which all land is and remains state ownership - with the transfer of ownership on immoveables, land rights on the demarcated ground that is part of the urban tenement, shall follow the ownership transfer and enter into the name of the owner of the purchased immoveable. On that basis, urban tenements are also mortgageable.
3. Conditions for constitution of rights – investment project authorised In the case of a foreign investment, the required land must first be selected/located, and land application should be made. Investment authorisation must have been granted by the Government (through the Center of Investment Promotion – CPI). Foreign companies are required to implement the authorised investment project through a company incorporated and registered or a branch registered in Mozambique. A company although incorporated and registered in Mozambique is deemed to be a foreign company for investment and land rights acquisition if having a non Mozambican shareholding majority. In case of foreign individuals, the applicant must be a Mozambique resident for at least 5 years.
3. Conditions for constitution of rights – enviroment and tourism licensed Environment license for the proposed development granted by the Ministery of Environment. Specific tourism rights on the tourism development or real estate development granted by the Minister of Tourism or under delegation by the National Director of Tourism, and subsequent registrations made and relevant certificates issued.
3. Conditions for constitution of rights – land granted (A) Land rigths for the proposed development are granted through an authorisation from the relevant state or logal government authority, which can be: a Land Use and Development Right (DUAT), as it is the case for land in general, or a Special License, as it is the case for land within protected zones - partially protected (such as the maritime strip and river sides) and - totally protected (national parks and reserves). Foreign companies may apply for land only if under an approved investment project. A company although incorporated and registered in Mozambique is deemed to be a foreign company for investment and land rights acquisition if having a non Mozambican shareholding majority.
3. Conditions for constitution of rights – land granted (B) Land rights are subsequently granted, following in the case of land use and development rights (DUAT) two phases: Provisional Authorisation: 2 years; Definitive Authorisation : 50 years renewable for same period of time.
3. Conditions for constitution of rights – land granted (C) Although there is not yet a regulation defining the Special License regime, special licenses have been granted. Some provisions from the land use and development right and concessions general rules and practise from the government administration which are not conflicting with the Special License nature and scope have been used for that purpose. Under the current legal status, the advice is: special licenses shall be specific and complemented by comprehensive and detailed concession agreements, between the legally empowered state/local government entity and the investor(s)/developer(s). Regarding forest and wilde life a special licensing regime has been broadly defined under the specific Regulation.
4. Land Rights and Ownership Rights Land rights move along with the use and habitation, and ownership rights on the constructions and infrastrutctures built within urban tenement demarcated areas, which are part of tourism and real estate developments. That is the case, as long as there are no legal grounds for revocation of the granted land rights. Revocation due to non accomplishment of the development plan during the provisional authorisation period – immoveables are lost in favour of state; Revocation by public interest (to be followed by expropriation of immoveables); or expropriation of immoveable(s) (and assets non removeable from the ground) in the case of regular termination of the granted land rights. At termination of land rights or any of its renewal periods, if new land rights are not granted and the state declares expropriation of assets in the targeted tenement/development, a fair compensation and or indemnification to the holder of the expropriated rights must to be determined. Special court proceedings apply in case of expropriation.
5. Type of Developments Elegible for Fiscal Benefits Tourism and real estate developments in tourism zones are, under the Investment Law and Code of Fiscal Benefits requirements and procedures, elegible to the general tax benefits provided by the Code of Fiscal Benefits. Such developments may alternatively be elegible for specific tax benefits to be granted for tourism undertakings if consisting of: construction or rehabilitation of hotel installations (including related facilities); tourism activities aiming the development of National Parks and Reserves. Such developments may otherwise be elegible for extraordinary tax benefits to be granted for tourism undertakings if consisting of a project of more than five million United State Dollars. Or, alternatively, elegible for special benefits to be granted for tourism activities within the geographic areas classified as Rapid Development Zones, if consisting of construction of hotel or similar tourism infrastructures and operations, and its exploitation. Current areas within RDZ: Zambezi Valley, Nacala District, Mozambican Island and Ibo Island.
6. Type of Available Fiscal Benefits (specifications in CFB) Import duties reduction or exemption on certain capital goods or equipments listed in the Customs Tariff Schedule under class K items. Tax credit for investment with an additional amount of 3% in relation to the general tax incentive rate – efective rate of 8% Deductions to Income Tax on investment on new advanced technology. Deductions to Income Tax on investment on professional training of Mozambicans, which is higher if on new advanced technologies.
6. Type of Available Fiscal Benefits (specifications in CFB) Reduction of amount to be paid as stamp duty in certain acts such as incorporation of companies or alterations of the share capital, or Even exemption of payment of stamp duty. Exemption of real property transfer tax payment within the development. THANK YOU!