Malawi Market Entry

Malawi Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

The import of goods from the Czech Republic to Malawi is complicated by low purchasing power, geographical distance and logistical complexity, orientation towards traditional (mainly South African) suppliers and the absence of a mutual contractual basis. Most foreign companies import goods through local importers or agents, or set up an office in the country. Establishing a relationship with a local reliable partner (importer, distributor, representative) is usually a basic condition for successful business. Check smber for agriculture and fishing facts of Malawi.

The distribution of goods in Malawi is hampered by outdated infrastructure and difficult transport accessibility in many places. Although travel times to Mozambique’s two key ports (Beira 900 km away and Nacala 1000 km away) have shortened in recent years, no seaport is still accessible from Malawi in less than 12 hours. Waiting times at the Mozambican border are sometimes very long. For practical reasons (speed of clearance at the port) many Malawian importers and exporters prefer Durban in South Africa or Dar es Salaam in Tanzania, 2300 km away.

Consumer goods are best marketed locally through importers/distributors and wholesalers who already have established distribution channels for local retail chains. The basic criterion of most potential distributors is the price, which must be competitive in relation to South African, or Asian and other suppliers.

Foreign trade is largely liberalized. Import duties are differentiated according to the country of origin of the imported goods. Importers from Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) countries have preferential access to the Malawian market.

The Czech exporter must provide the importer in Malawi with a copy of the invoice, bill of lading, certificate of origin of the goods (for some types), a detailed list and description of the goods and a notice of dispatch. All invoices must include the names of the supplier and recipient of the goods, the name of the goods, the unit and total price and the quantity details. In addition, a waybill (Way Bill in the case of land transport) or an air waybill (Air Way Bill) must be documented. Customs clearance can be done at any border crossing into Malawi, including international airports.

Detailed information on customs regulations and procedures, including a complete customs tariff, can be found on the Malawi Revenue Authority website.

Forms and conditions of operation on the market

Businesses register with the Malawi Investment and Trade Center (MITC), which will assist with all formalities. The standard forms of business companies are Public Limited Liability Company (as) and Private Limited Liability Company (sro). Joint-venture is the preferred (and most widespread) form of company with foreign participation. Invested capital is registered with the Reserve Bank of Malawi (through an account established with a commercial bank). The minimum amount of invested capital is set at USD 50,000. The subsequent issuance of an investment license at MITC is subject to a fee of USD 1,000. A residence permit for foreign investors is issued for 5 years with the possibility of extension and costs USD 2,100.

The procedure for the necessary steps to register a company in Malawi is described on the MITC website. First, it is necessary to register the company name, then it is required to register the company in the commercial register (Registrar General of the Ministry of Justice), register capital with the Reserve Bank of Malawi (through a commercial bank with which the company has an account) and register the company for tax payment ( at the Malawi Revenue Authority). For foreign employees, it is subsequently necessary to obtain a work permit and register local employees with the Ministry of Labour.

Marketing and communication

The marketing and advertising sector is quite well developed and, in principle, the methods do not differ from European ones. Advertisements in the press and trade magazines, large-scale billboards, advertising spots on television and radio are common methods, and in recent years the importance of advertising on the Internet and social networks has been growing rapidly. All mass media can be used. The print media with the largest reach are The Nation and The Daily Times. A list of Malawian media contacts can be found on the Media Institute ofSouthern Africa website.

Given the minimal awareness of Zambian consumers about Czech products, the need for effective marketing is generally important, so that they can assert themselves against already established South African and other (especially Asian) competition. Also in the field of marketing, it is advisable to keep in mind the rather conservative nature of Malawian society and customs.

Issues of intellectual property protection

Malawi is a signatory to most of the standard international conventions and protocols aimed at the protection of intellectual property, including the Berne Convention for the Protection of Literary and Artistic Works and the Paris Convention. As a WTO member, Malawi is a signatory to the TRIPS Agreement. Malawi is also a member country of WIPO (World Intellectual Property Organization) and has adopted national laws to protect intellectual property.

Despite the participation in these international conventions and the existence of relevant institutions and laws for the protection of intellectual property at the national level, very little has been done so far to solve the widespread problem of the sale of counterfeits of all kinds (computer software, drugs, clothing, etc.). Protecting intellectual property is not a government priority.

Public procurement market

Public procurement in Malawi is governed by the Public Procurement and Disposal of Assets Act of 2017. It created a new institution for the regulation, supervision and administration of public procurement – ​​the Procurement and Disposal of Assets Authority (PPDA). The PPDA formally meets international standards for independence and legal authority. In practice, however, it still does not fulfill one of its main functions, namely the centralization of information about ongoing public contracts in the country. Individual entities, despite their legal obligation, usually do not send information about the public contracts announced by them to the PPDA. Information on the relevant procedures and requirements can be found on the PPDA website, but the list of issued tenders is very incomplete.

Corruption and the role of personal connections in the awarding of government contracts remain a major problem. State and private companies generally have the same conditions when participating in tenders, but sometimes state companies get a more favorable government loan and in a few cases they were awarded a state contract without a tender process. The government is also considered a less reliable payer for goods or services delivered. Successful participation in custom tenders requires long-term monitoring of the situation and provision of relevant information even before the official announcement of tender conditions.

Government tenders are usually published in the domestic and foreign press. An important source of information is the Malawi Investment and Trade Center (MITC), whose website provides information on public investment projects in Malawi.

Payment terms, payment ethics and resolution of commercial disputes

Malawi is a member of the Multilateral Investment Guarantee Agency (MIGA), has acceded to the International Convention on the Settlement of Investment Disputes (ICSID) of 1965. In Malawi, awards of foreign courts and arbitral bodies are recognized provided they are registered by local courts and that such award is stated in the contract. A very thorough due diligence of business partners is recommended before the conclusion of the contract itself, the contract must specify the method and place of resolution of any disputes. Commercial disputes before local courts are associated with high costs, slow court proceedings and low enforceability of decisions (especially in the case of arbitration). Regarding payment terms, advance payment (for lower volumes) or irrevocable letter of credit is the most common and convenient practice for importers in Malawi.

Visas, fees, specific conditions for traveling to the territory

Visa: A Malawian visa can now be applied for online at https://evisa.gov.mw/. Citizens of the Czech Republic can obtain a visa at border crossings and international airports, you can also apply in advance at the Embassy of Malawi in Berlin:

Malawi Embassy

Westfällische Strasse 86

10709 Berlin

phone: +49 308431540

fax: +49 3084315430

email: [email protected]

website: www.malawiembassy.de

The basic type of visa is a tourist visa valid for a 3-month stay. Other types are official, diplomatic and transit visas. The fees in April 2022 were: Transit visa (valid for 7 days) US$50, Single entry visa for 3 months US$75, Multiple entry visa for six months US$150, Multiple entry visa for twelve months US$250. It is recommended to check with the relevant Malawian embassy before traveling that the conditions for entering the country have not changed. Information can also be verified on the website https://www.immigration.gov.mw/.

Travel document requirements: Passport valid for at least 6 months after expected departure from the country. Parents traveling with children may be asked to present their birth certificates, a parent traveling alone with a child may be asked to document the consent of the other parent for the child’s travel. When arriving from areas affected by yellow fever, a vaccination certificate showing vaccination against this disease is required. The foreign police may also require proof of sufficient financial reserves for a stay in Malawi.

Specifics, security situation, recommendations for tourists: Malawi is a relatively safe country by African standards, but general principles must be observed and be aware that a European can already attract unwanted attention due to his different appearance. There is a risk of pickpocketing and theft of parked vehicles. After dark, it is not recommended to move on foot, but rather to use the services of a taxi or hotel vehicle. Although the crime rate is low by regional standards, there are cases of break-ins, including by armed gangs. Political rallies and other gatherings can turn into violent clashes with the police, so it is best to avoid them.

Traffic: Drive on the left on Malawian roads. Foreigners must have an international driver’s license. Fuel supply is not reliable, travelers are advised to stock up on longer routes. Slow down in all built-up areas. Traffic police often place speed cameras where there are no road signs indicating the applicable speed limit. The police can impose fines on the spot. Malawi suffers from a very high road traffic fatality rate. Traveling between cities by public minibus or pick-up is not recommended; vehicles are often in poor condition and overloaded. Public transport is at a low level. Bus service between major cities tends to be more reliable than minibus services.

Car rental is recommended only through established international rental companies. The use of public transport in cities is not suitable, the use of taxi services is recommended (including transfers to the airport). Walking in big cities during the day does not pose a safety risk, but most roads lack sidewalks, and drivers are not considerate of pedestrians.

Health situation: Malaria is widespread throughout Malawi, so prophylaxis against the disease is recommended. In the event of the slightest symptoms of any disease (flu, angina, headaches, feelings of fatigue), it is highly advisable to visit the nearest hospital and have a malaria test done. Medicines against ongoing malaria are freely available in Malawi. Infectious diseases spread by drinking poor-quality water are also widespread.

Vaccination against yellow fever, meningococcal encephalitis, typhoid and jaundice type A and B is recommended when traveling to Malawi. It is necessary to carefully follow hygiene principles and drink only bottled or otherwise guaranteed safe (e.g. boiled) water. It is recommended that the tourist should always have sufficient cash with him for the need of medical treatment and, at the same time, quality health insurance for the entire duration of his stay in the country. The treatment must always be paid in cash first. AIDS is widespread in Malawi. The biggest tourist attraction is Lake Malawi, where, however, swimming is not recommended due to the risk of protozoan infections (bilharziosis).

Health facilities and telephone connections in Malawi are at a low level, especially in rural areas. Even basic medicines and clean needles may not be available. Emergency services are limited. Medical facilities in Malawi generally do not meet European standards in terms of equipment and availability of medical supplies. In the event of a serious illness or injury, the only solution may be expedited transport to, for example, the Republic of South Africa. Make sure you have adequate travel medical insurance and funds available to cover the costs of any medical treatment abroad and repatriation.

Water used for personal hygiene in hotels and other accommodation facilities aimed at foreigners is mostly safe, but not recommended for drinking. It is also not recommended to consume food prepared on the street. On the contrary, it is possible to recommend even scrupulous adherence to the main hygiene principles (washing hands before eating, etc.). Where safe water is not available, there is a risk of cholera.

Malawi Market Entry