Malawi is homely country that guarantees your freedom to invest in many sectors of the economy. Since Malawi is a new destination for most investors, the country has many unique opportunities for investment that are no longer available in many other African countries. Malawi has abundant natural and mineral resources that are waiting to be exploited. Malawi has pleasant weather to make your stay in Malawi enjoyable as you realise and see the fruits and the manifestation of your investment.
Business and investment environment
Peace and stability
Malawi is a peaceful and stable country politically and therefore guarantees your investment security. Malawi has not been involved in any civil war or civil strife since independence in 1964. Malawi has professional security organisations that deal efficiently with the security of the nation, and the security of your investment.
Abundance of natural and mineral resources
Malawi has an abundance of natural and mineral resources. For many years due to Government policy, Malawi focused exclusively on agricultural production. However, the Malawi government recently shifted its focus and opened up to mineral exploration. Malawi has proven deposits of Uranium, Heavy Mineral Sands, Rare Earth Minerals, Bauxite, Niobium, Coal, Titanium, Zinc, Phosphates, Gypsum, Vermiculite, Limestone, Dimension Stone, Silica Sand, Sulphides, Precious and Semi-Precious Stones and many more. Several Chinese and western companies are currently in Malawi prospecting for various minerals.
Investors can travel or export their products from Malawi to the rest of the world via air, road, and rail connections. There are daily flights from Malawi’s major cities to major transit points such as Nairobi, Kenya; Johannesburg, South Africa; and Addis Ababa, Ethiopia. Malawi’s road network is well connected with Tanzania, Mozambique and Zambia. Goods can also be sent through the railway network to Mozambique and Zambia.
Before any investor decides to invest his money, he must be assured of a ready market for his product at local, regional and international market.
The domestic market: An investor in Malawi will have access to a population of 17 million Malawians, with a thriving middle income population.
The Southern African Development Community (SADC) market: The SADC market has a total of 15 countries with a combined population of 276 million, a combine GDP of USD430 billion, and combined exports of USD110 billion in 2010. Your products produced in Malawi will be eligible to be exported to the SADC region through the SADC Free Trade Area agreement.
The Common Market for Eastern and Southern Africa (COMESA): COMESA has 20 member states, a combined population of over 389 million and annual export bill of US$82 billion. Your products produced in Malawi will be eligible to be exported to the said population through the COMESA Free Trade Area agreement.
Everything But Arms (EBA): under this agreement, you will export your products produced in Malawi to the European Union.
Growth Opportunity Act (AGOA): under this agreement, you will export your products produced in Malawi to the United States of America.
Malawi China Trade Agreement: You will also be able to export your goods produced in Malawi to China under a preferential tariff treatment which China accords the majority of Malawian products.
Trade and investment incentives are espoused in pieces of Malawi’s Legislations. The Government offers a wide range of tax incentives to investors in the export and manufacturing sectors. These incentives are captured in detail on the webpage of the Malawi Investment Trade Centre (MITC): www.malawi-invest.net. MITC assists investors set up businesses in Malawi.
Tax incentives in Malawi are enshrined in the main tax legislations that include the Customs and Excise Act, the Income Act and the Export Processing Zones (EPZ) Act. To encourage investment; the Government offers the following incentives:
No tax on qualifying investment on new buildings and machinery
No tax for up to 40% investment in used buildings and machinery
No tax for 50% of qualifying training costs
No tax on operating costs incurred by manufacturing companies 25 months prior to commencing production
(Loss carry forward of up to seven years, enabling companies to take advantage of allowances;)
No tax on 15% of investment made in designated areas of the country such as Kanengo, Chirimba, and Luwinga industrial sites.
Free repatriation of dividends, profits and royalties.
The Malawi government has instituted special investment incentives for the following:
Industries Raw Materials under Industrial Rebate Scheme
Car Hire and Safaris except used motor vehicles
Hotels, lodges and inns
Dairy farming industry
Water supply sector
Electricity generation, transmission and distribution
The Malawi Government has also instituted export incentives in the following areas:
For establishing operations in export processing zones (EPZ)
For manufacturing under bonds
Exporters are entitled to the following privileges:
The Malawi Government has also instituted various other incentives including a special taxation package to promote the production of biodiesel in Malawi.
Value added tax Malawi is at 16.5% payable monthly.
For more information, please contact the Embassy or consult the Malawi Investment and Trade Centre on www.malawi-invest.net.
Since Malawi is a new market for most investors, it has investment opportunities in all sectors of the economy. In order to have support the country’s economic growth, the Malawi Government has singled out critical sectors for promotion and special support because their potential impact on the lives of Malawians. The sectors include agriculture, mining, manufacturing, tourism, energy, and infrastructure development.
The Greenbelt Initiative
Malawi has an abundant water supply. Malawi’s agriculture however depends almost exclusively on rain-fed farming. This has resulted in erratic crop harvests. In order to unleash and realise the strategic potential for irrigation in Malawi, the Malawi government designed the Greenbelt Initiative under which it has placed 1 million hectares of land for the production of crops, livestock and fisheries. You have the opportunity to earn decent returns by investing in the Greenbelt Initiative. The Malawi Government has already put in place incentives that you cannot afford to ignore.
Tea production and processing
Malawi produces a lot of tea. Much of Malawian tea is exported the UK and is renown world wide as English tea. Malawi alongside Kenya, India and Bangladesh produce English tea. You may invest in producing or process tea in Malawi.
Sugarcane is successfully farmed in Malawi in Dwangwa and Nchalo. In both plantations sugar is processed, packaged and distributed throughout Malawi. Malawi sugar is also exported to neighbouring countries and to the European Union. Malawi has a huge export quota with the European Union which it fails to meet every year because of under production. The Malawi Government has in this regard developed the Green Belt Initiative to boost among others the production of sugar. If sugar production is your area of expertise, you may wish to look at opportunities of investing in the GBI in sugar in Malawi.
Integrated Cotton Development
All lakeshore and lower Shire districts are well suited to growing cotton. The cotton industry has produced steady returns in Malawi since colonial days. More importantly, the industry has an upward growth trajectory both in Malawi and globally. Cotton processing and textiles in general are labour intensive and therefore costs have always been reasonable for factories that are set up in Malawi due to its competitive labour rates. Cotton also has potential for backward and forward linkages in the production seed oil; animal feed and many other sectors.
To facilitate the movement of goods and persons, the Malawi Government is seeking investors in a number of projects under various public-private sector partnership options such as Build Operate and Transfer (BOT) and Build Operate and Own (BOO) concessions in projects such as the rehabilitation of airports, construction of roads, highways, bridges and railway; construction of ports. There also opportunities in operating in the transport sector including running operating trains, ships and flights.
Mining and mineral processing has had a mixed history in Malawi. The Malawi Government Policy in the first 3 decades of independence focused almost exclusively on agricultural production. While most African economies, including Malawi’s neighbouring countries depended on mining, Malawi economy survived on tobacco, sugar and tea exports. In the last 10 years, the Malawi Government changed its policy and made mining and mineral processing a priority. The mining sector in Malawi therefore is relative new and untapped. Currently mining is limited to: uranium (by an Australian company), coal mining, quarrying, limestone production, and gemstone mining. Gemstone exports are dominated by aquamarine, amethyst, red and rhodolite garnets, quartz, angering and feldspar.
You can invest in mining bauxite, niobium, monazite, heavy mineral sand, gypsum, gold, corundum, and graphite. Apart from investment opportunities in mineral extraction, there are also opportunities in mineral processing such as phosphate fertilizer manufacturing in Phalombe.
Malawi has an abundance of gemstones such as agate, amethyst, aquamarine, garret, rubies and sapphires; occurrences of gold and kimberlitic rocks, which are generally host to diamonds. This creates an opportunity to invest in the production of jewels and jewellery.
In Malawi, you have opportunities to prospect for the following mineral:
Platinum group of minerals (PGMs)
Nickel and copper
Heavy mineral sands