How to Hire Remote Employees In 

São Tomé & Príncipe

The Basics

Currency
Dobra (Db )
Employer Taxes
Payroll Frequency
Monthly
Official Language
Portuguese

Employment in 

São Tomé & Príncipe

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Time savings: Hiring through a subsidiary or EOR can take months of onerous paperwork and legal wrangling. This is only multiplied if you want to hire in multiple countries.
Reduced overhead: You can save tens of thousands of dollars in onboarding costs by hiring through a company like Panther. You also have fewer responsibilities to provide benefits, further reducing overhead.
Greater flexibility: Contractors can be brought on as-needed. If they are not a good fit, you can choose not to renew them without incurring significant additional termination costs.
Reduced legal risk: Contractors generally don't have the host of legal protections that typically cover full-time employees.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: While it's important to understand local contractor law, for most firms, misclassification risk is minimal.
Lack of Control: For a worker to be classified as a contractor, they should be allowed to work independently on their assigned tasks. Hiring full-time employees offers a wider range of management options.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.

Set up a subsidiary in 

São Tomé & Príncipe

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in São Tomé & Príncipe can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in São Tomé & Príncipe, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for São Tomé & Príncipe.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in São Tomé & Príncipe is not the same as paying workers in your own country. Employees have to be paid using São Tomé & Príncipe’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

São Tomé & Príncipe

 Specific Information

Working Hours

The standard work week in São Tomé & Príncipe is 48 hours across 5-6 days.

Overtime

In São Tomé & Príncipe, employees overtime is double regular  wage, depending on industry.

Payroll Tax

Employer

Employer

  • Social security contributions
  • Pensions

Minimum Wage

The minimum wage in São Tomé & Príncipe is $747.00 in International Currency.

Payroll

Pay Cycle

São Tomé & Príncipe employees receive their salary in monthly basis.

13th Salary

No Info.

Leave

Paid Time Off (PTO)

In São Tomé & Príncipe, employees receive 14 days of paid annual leave.

Public Holidays

There are 10 public holidays.

Sick Days

Employees receive 26 days of casual and sick leave.

Maternity Leave

Female employees receive 60 days of maternity leave. The maternity benefits are paid for the 60 days of the maternity leave, half of each can be taken before the birth.

Paternity Leave

There is no statutory paternity leave.

Parental Leave

Apart from maternity leave, there is no other parental leave.

Other Leave

No Info.

Marriage Leave

No Info.

Bereavement Leave

No Info.

Termination

Termination Process

Employers must provide a written explanation and at least eight days' notice if the termination is for cause.

The explanation must include the cause for dismissal, supporting documentation, and a chance for the employee to react.

Failure to follow the procedure may result in the dismissal being declared invalid by a court.

Notice Period

The notice period in São Tomé & Príncipe is:

  •  Employers need to provide at least 8 days notice.
  • Employees who want to terminate their employment must give 15 days notice.
  • Layoffs: 30 days

Severance Pay

The Severance Pay in São Tomé & Príncipe depends on the Duration of Employment:

  • at least 1/3 of regular salary for each year worked is required in the event of layoffs.

Probation Period

Probation period is 3-6 months.