The excess of procedures in the processing of documents and high costs to formalize a company is seen by the Center for Democracy and Development (CDD) as the main factor that leads young people to "opt" to develop their businesses in the informal sector.

"Due to the excessive bureaucracy and costs involved, many young people end up giving up on formalizing their businesses and prefer to remain in the informal sector," reads a CDD report.

The CDD counted five documents to formalize a sole proprietorship or partnership, and more than five documents for a company.

In this process of handling cases, a citizen can spend more than 5,000 meticais, and partners in a company can spend a higher amount, all the more so because they are obliged to announce the creation of the company in the Boletim da República.

"The publication is only made upon payment of 113 meticais for each line of text of the statutes or of the contract of the company in society," says do document.

According to the Non-Governmental Organization, there has been an effort by the Government to facilitate the integration of small entrepreneurs into the formal business system. In this sense, the process of legalization of a commercial activity should start and finish in a maximum period of 10 days, but Decree No. 34/2013, of August 2 - Regulation of Licensing of Commercial Activity, created for this purpose, seems not to be having the desired effect.

"Who wants to open a company or formalize a business in the country have to wait about 30 days and follow at least 10 bureaucratic procedures that involve a set of obligations in different public institutions to obtain a license to exercise activity, depending on the branch of activity," one reads.

This process can take even longer if the partners of a given company live outside Maputo City.

"Corporate entrepreneurs living in the provinces take longer to formalize a company than those in Maputo City. This is due to the fact that the National Press is located only in the city of Maputo, and entrepreneurs from all over the country have to send the printed copy of the publication's statute by mail and provide a digital copy," explains the report.

Opening a business in Mozambique requires the organization of several documents that must, before being submitted, pass through an authenticity check. In addition, "it takes a week or more and also requires three bureaucratic obligations in different public institutions and costs three times above average, compared to other countries in the Southern African Development Community (SADC).

Says the CDD, that the slowness in processing the documentation is also due to the fact that the employees of each institution through which certain documents must be remitted are unaware of all the procedures for opening a company. "They themselves are involved in only one of several steps for formalizing the company."

In the CDD's view, there is an urgent need to create legislation that facilitates and stimulates entrepreneurship among young people. But also, the Government should choose to make available, on a dedicated virtual platform, the necessary information for the formalization of a company.

"Legislation should provide for the creation of more support centers for formalization of companies and small businesses, entrepreneurship counseling, technological innovation and youth creativity, and the promotion of social and economic development for young entrepreneurs to compete for mentorship and funding," CDD suggests.