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	Invest in Malawi Malawi realizes the important role Foreign Direct Investment (FDI) plays in the economic growth and development of any country. In its poverty reduction and growth strategy, the country highlighted the need for creating an enabling environment for attracting FDI in an effort to stimulate private sector driven growth and poverty reduction. The Ministry of Trade and Private Sector Development in collaboration with other line Ministries and such institutions like the Malawi Investment Promotion Agency (MIPA), the Malawi Export Promotion Council (MEPC); the Malawi Revenue Authority (MRA) has worked tirelessly to ensure that an environment is set for the effective operation of the private sector through the provision of proper infrastructure, tax incentives and market access. Even more important are the facts that Malawi has a stable political environment; a friendly, kind and well trained hard working English speaking people; and a liberalized economy where companies operate and access opportunities without government interference. The government’s efforts aim to facilitate, rather than to regulate private investment For further information follow the following links: Malawi at a Glance Private Sector Development Investment Climate in Malawi Investment Incentives Investment Process Key Areas of Possible Investment Business Opportunities in Malawi Private Sector Development The Malawi Investment Promotion Agency (MIPA) was established in 1991 as a result of the Investment Promotion Act 1991 to stimulate inward investment and became operational in 1993. Through MIPA, investors can access general incentives and export incentives, including Export Processing Zones (EPZs). Between 1993 and 2001, MIPA facilitated a total of US$163.9 million of Foreign Direct Investment (about US$20 million a year), much of it from South Africa. This is a tiny proportion of world annual investment flows, and even of that flowing to Africa. Investment in manufacturing has been declining because of the poor macroeconomic environment, which will be addressed through the macro environment strategy which covers: maintaining a stable macroeconomic environment; investment incentives; appropriate and functioning economic and social infrastructure; financial sector reforms; capital market development; and appropriate legal and regulatory framework for domestic and foreign investment. An added bonus is that the political environment and leadership is pro-investment and believes in a functioning and stable private sector. [ Back To Top ] Investment Climate in Malawi Credit Access There is no discrimination in terms of access to credit in Malawi. Borrowing and lending relationships rest in the hands of banks and their clients. A business can borrow in foreign currency upon arrangement with bank managers. Levels of interest rate vary from bank to bank. Currently the highest commercial lending rate is 27% but the client can discuss with banks on a suitable rate. Foreign investors have free access to foreign exchange both for paying for imports and transferring financial payments abroad. Transportation System Despite being a land locked country, Malawi has a good road network and railway services, which connect Malawian importers and exporters to the important ports of Beira and Nacala in Mozambique. The port of Durban in South Africa via excellent road connections also services the country. The railway line from the port of Nacala in Mozambique is connected to the major industrial cities of Lilongwe and Blantyre among others. The country also has well serviced international airports in the major cities of Lilongwe and Blantyre, which connect exporters and importers to most of our major trading partners. Other important infrastructures available include; good electricity supply, good telecommunications network, mobile phone providers and reliable water supply system. Investment/Business Security In terms of physical property and property rights protection, Malawi is a signatory of the International Convention for Settlement of Investment Disputes (ICSID); and Multilateral Investment Guarantee Agency (MIGA), a World Bank institution that operates as an insurance organization, which offers compensation to multilateral investment losses. Malawian law also provides for security of foreign as well as domestic investment, which includes compensation to property damaged through civil strife and/or political unrest. In addition, Malawi has bilateral investment protection and promotion agreements with a number of countries including Malaysia, Republic of China, and Mauritius. In terms of economic security, Malawi is a liberalized economy where investors are free to venture into any form of business except those having a bearing on health and security. In its effort to deregulate the private sector, the Malawi Government has enacted measures including the elimination of price controls, the termination of import restrictions and the need for import licenses, the divestiture of state owned companies and steps to rectify the external transport situation. In addition, there is no industrial licensing except for those companies products deemed hazardous to health and security (e.g. firearms). A population of 12 million people offers steady domestic effective demand in addition to opportunities offered by bilateral, regional and multilateral trade agreements signed by the Malawi government (SADC, COMESA, AGOA, EBA etc). Import/Export Policy There is no discrimination in terms of the rules and regulations governing imports and exports. Investors need to declare all imports and exports with the Malawi Revenue Authority (MRA) for taxation and statistical purposes. The investor can import everything except those goods posing health and security concern according to the rules of the land [ Back To Top ] Investment Incentives General Incentives Additional 15 percent allowance for investments in designated areas of the country Allowance up to 20 percent for used buildings and machinery 50 percent allowance for qualifying training costs Allowance for manufacturing companies to deduct all operating expenses incurred up to 24 months prior to the start of operations Zero duty on raw materials used in manufacturing Indefinite loss carry forward enabling companies to take advantage of allowance Agreement for the reduction of withholding taxes on remittance and payments Low wage rates and a stable social and political environment 40% investment allowance on qualifying expenditure for new buildings and machinery Export Incentives - Incentives for establishing operations in an Export Processing Zone (EPZ) No withholding tax on dividends No duty or capital requirement on capital equipment and raw materials No excise taxes on purchases of raw materials and packaging materials made in Malawi No surtaxes (VAT) Zero corporate tax rates Incentives for Manufacturing in Bond Export tax allowance of 12 percent of export revenues for non-traditional exports Transport fax allowance equal to 25 percent of international transport costs, excluding traditional exports No duties on imports of capital equipment used in the manufacture of exports No surtaxes No excise taxes or duties on purchases of raw material and packaging materials Timely refund of all duties (duty drawback) on imports of raw materials and packaging materials used in the production of exports Incentives for Horticulture Producers 100 percent duty-free importation of equipment and raw materials for those exclusively engaged in horticultural production for export Source: Malawi Investment Promotion Agency (MIPA) [ Back To Top ]
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