Laws and Regulations

Legal and Judicial System

Malawi’s legal system is founded on English Common Law.  The constitution of the Republic of Malawi (1995) enshrines the basic freedom to invest, freedom to own property, and guarantees fair compensation in the event of expropriation.  The court system is categorized into the Magistrate’s Court, the High Court, and the Supreme Court of Appeal.  The country also has a commercial courts to accelerate the settlement of business-related litigations.

Freedom to Invest

The government welcomes private investment and does not impose restrictions on the ownership or location of investment. Foreign Direct Investment is permitted in all sectors of the economy except for those sectors or activities that may pose a danger to health, the environment or the security of the nation.  Noteworthy is the freedom of entry and exit in terms of investment in the country.

Repatriation of foreign exchange

Foreign exchange operations in Malawi are governed by the Exchange Control Act. Investors are permitted full remittance of dividends, investments capital on repatriation, interest and principal payments for approved international loans, and approved feed for managements, licenses, royalties and similar obligations.   The Anti-Money Laundering Act was passed in August 2006 to enhance the soundness and stability of the financial system and financial institutions in the country.
 

Regulatory Framework

Malawi's investment framework is primarily governed by the Investment and Export Promotion Act 2012 which also establishes the Malawi Investment and Trade Center (MITC) which is Malawi's primary institution mandated to attract investment into Malawi and to promote exports to international markets. MITC operates under the Ministry of Industry, Trade and Tourism, which is the policy institution responsible for investment and trade.
Malawi's legal framework provides the following policy statements on investments:
•    Any foreign investor can invest in any sector of the economy unless declared by the responsible Minister, such as investment in petty trading;
•   A foreign investor can own land under leasehold arrangements in Malawi;
•    A foreign investor can make international payments on their loans and interest without any restrictions. Unrestricted payments are also allowed on management contracts, royalty payments, franchise payments etc. The condition is that the investment capital must be registered with the Central Bank upon registration of the investment in Malawi
•    A foreign investor in Malawi can wholly remit their profits and dividends as long as their investment is registered with the Central Bank of Malawi;
•    A foreign investor can disinvest 100% from Malawi when they desire to;
•    A foreign investor is not mandated to venture into partnerships, and thus can directly invest and own their interests 100%.
Furthermore, the Constitution of Malawi gives protection to foreign investors when it gives guarantee that no foreign assets shall be nationalized by the state.