Obtala forestry subsidiary in Mozambique awarded CPI status by authorities

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Obtala forestry subsidiary in Mozambique awarded CPI status by authorities

7:50 CAT | 27 Oct 2016

obtala.com

Obtala’s forestry subsidiary, Argento Mozambique, has been awarded CPI status by the Mozambican authorities entitling it to various tax benefits and protections in return for inward investment from the company’s subsidiary Argento Continental Corporation. CPI is a government institution with a mandate to attract and facilitate the establishment of private domestic and foreign direct investment in Mozambique.

Companies operating under CPI status also have the advantage of non-tax benefits including insurance services specifically to offset investment risk, VAT exemption on domestic acquisitions, and importantly, legal protections and compensation against expropriation with international bodies.

In order to satisfy qualification for CPI status Argento is required, amongst other things, to implement a phased investment plan of $3m over a 5 year period.

If this investment were not made, CPI status would be revoked rather than this amount constituting a debt. This award covers all operations within Mozambique and allows Argento to apply for Industrial Free Zone (IFZ) status with Mozambique’s Office for Accelerated Development Economic Areas (Gazeda).

Gazeda established a duty free zone located in the district of Nacala, Nampula province in 2007 which services the export of our timber to international markets via Nacala Port. Achieving IFZ status in Nacala would lead to further enhanced tax incentives.

The Company is in continued talks with investors regarding inward investment via the previously announced Argento Preference Share. Investor due diligence trips are scheduled to our African operations in November with regard to this matter.

Source: Interactive Investors