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Guinea-Bissau Economy Overview
Currency
West African CFA franc (Fr, XOF)
Working hours
48 hours/week
Public/bank holidays
10 public holidays
Capital
Bissau
Languages
Portuguese, Balanta, Fula, Manjak
Population
39.1 million
Minimum hourly salary
F CFA59,000
Tax year
1st Jan – 31st Dec
Date format
DD/MM/YYYY
Misclassification penalties
Guinea-Bissau, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Guinea-Bissau may lead to fines and penalties for the offending company.
Fun fact
Chances are you’ve heard of at least one country with the name “Guinea” in it. There’s Guinea and Equatorial Guinea, both of which are in West Africa. There is also Papua New Guinea, which is in Oceania. However, none of those are the same as Guinea-Bissau.
The Republic of Guinea-Bissau is a small West African country located between Senegal and Guinea. It consists of its mainland territory as well as the roughly 88 Bissagos Islands off its western coast. This country was a part of the Mali Empire and then colonized by Portugal before finally achieving its independence in 1973.
Since that time, its population has expanded steadily, reaching 1.978 million in 2024. Its economy has also grown tremendously, especially since 2000, when GDP was only $390 million, to its 2023 size of $1.97 billion. This growth is set to continue at 5% in 2024.
Despite continued political instability since independence, trade has continued, and the nation’s economy, based largely on agricultural products like cashews and tree nuts, has continued to grow.
If you’re considering doing business in Guinea-Bissau, you have several options at your disposal, including opening a company, investing in local businesses, or even hiring Guinea-Bissauans through an EOR service provider. Read on to find out more about this country’s economy and the pros and cons of doing business here.
Overview of Guinea-Bissau's Economy
Guinea-Bissau, along with seven other West African countries, uses the West African CFA franc (African Financial Community franc). This currency, coded XOF, trades at roughly 1 USD to 600 XOF. Because it is used by over 100 million people in countries with a combined GDP of over $130 billion, it’s relatively stable and reliable.
| Economic Sectors | Contribution to Economy |
|---|---|
| Agriculture | 50% |
| Services | 36.9% |
| Industries | 13.1% |
The economy of Guinea-Bissau struggled after independence until the 2000s, when it began to pick up and grow steadily. Even through the global pandemic, this growth continued, largely because it’s based mostly on food-based exports. Cashews and tree nuts, peanuts, fish, and palm oil are some of the country’s major products, and agriculture accounts for 50% of Guinea-Bissau’s economy.
Services account for 36.9% of the economy, and industries like timber, mining, and food processing make up the remaining 13.1%. While GDP has grown quite consistently over the past 20 years, Guinea-Bissau still has one of the lowest per capita GDPs in the world, currently $1090/person per year. The federally mandated minimum wage in the country is 59,000 XOF/month, which is just under 100 USD/month.
At the same time, skilled workers can make between 200,000 and 500,000 XOF/month (335-835 USD). Even with employer contributions of 16% of workers’ salaries, the costs of labor in Guinea-Bissau are very low.
| FDI Indicator | Value |
|---|---|
| Inflows (2022) | $22 million |
| Total Stock | $315 million |
| Share of GDP | 18.5% |
According to UNCTAD’s World Investment Report 2023, this represents 18.5% of Guinea-Bissau’s GDP. Most FDI is in oil exploration and extraction through tourism, particularly in the Bissagos Islands, which has also attracted some investment lately. This FDI comes mostly from China, the US, India, and Portugal.
Taxes
Employer Tax: 7%
National Social Security Institute (Instituto Nacional da Segurança Social – INSS)
7% (pensions, healthcare, and disability benefits)
Employee Tax: 11%
Social Security Contribution
3%
National Social Security Institute (Instituto Nacional da Segurança Social – INSS)
8% (pensions, healthcare, and disability benefits)
Income Tax
The resident individual tax rates vary depending on annual income as follows:
Gross Income (XOF)
0-500,000
500,001- 1,000,000
1,000,001-2,500,000
2,500,001-3,600,000
above 3,600,000
Tax Rate
1%
6%
8%
10%
12%
Business Regulation in Guinea-Bissau
As in any country, it can be challenging to start doing business in Guinea-Bissau. Current political instability aside, the country is open to investment and foreign businesses – it simply hasn’t had much due to the relatively small size of its economy.
If you’re planning to start doing business here, these are some of the regulations you’ll need to know about:
Registration and Compliance
Registering a business in Guinea-Bissau can take eight to nine days on average and requires an eight to nine-step process. Married women must obtain their husbands’ approval before registering a business.
A company can be set up by registering a unique name, submitting company statutes, and obtaining a tax number through the One-Stop Shop (Centro de Formalização de Empresas or “CF”). Businesses also need to register with the Ministry of Labor and National Social Security Institute so they can legally hire employees and start doing business.
Taxes and Investments
Profits made by companies that carry out industrial or commercial activities are taxed at a corporate income tax rate of 25% in Guinea-Bissau. VAT is 15% on most goods and services as of 2023.
Companies that employ workers must also make mandatory contributions of 16% of their salaries to social security programs for old age, invalidity, survivors, accident, and occupational illness benefits. Withholding taxes include 15% for dividends, 15% for interest (10% for non-residents), 15% for royalties, and 25% for management, consulting, and technical fees.
Employment Laws
Workers in Guinea-Bissau are protected by local laws as well as international labor treaties to which the country is a signatory. Employees work eight hours a day and 40 hours per week and are allowed to work a maximum of 10 overtime hours a week or 100 hours per year at a rate of 150% of normal wages. They should receive two days off per week and an annual paid leave of 21 days.
Guinea-Bissauans are entitled to 9 paid public holidays per year. Maternity leave is granted for 60 days, and no paternity leave is mandated. Employees are allowed 5 days of sick leave per year paid by the employer and up to 26 weeks through social security.
Employees with less than three years of service deserve one month’s notice, and more senior workers are entitled to two months’ notice. Severance is paid at a rate of one month’s salary for each year of service except in cases of gross misconduct.
Intellectual Property
Guinea-Bissau protects intellectual property rights through its domestic laws and participation in OAPI, the African Intellectual Property Organization. Trademarks can be registered in Guinea-Bissau for 10 years and then renewed. Copyrights last for 50 years either from their creation or after the life of the creator, depending on the type of material.
Benefits of Doing Business in Guinea-Bissau
When choosing whether or not you should do business in Guinea-Bissau, you’ll need to look at the relative benefits of setting up in the country. The advantages of doing business in Guinea-Bissau include:
- Very low costs of labor
- Good access to regional markets
- Strong shipping and land transportation networks
- Low personal income tax rates from 1-20%
- Ethnically diverse workforce with broad language skills
- Extensive natural resources (timber, minerals)
Business Expansion Options in Guinea-Bissau
If you’re considering expanding your business into Guinea-Bissau or setting up a whole new enterprise, you’re not alone in this goal. This low-income country welcomes international investment and offers several ways to help businesses get started. These include:
Guinea-Bissau Employer of Record (EOR)
The Guinea-Bissau EOR becomes the official legal employer of your Guinea-Bissau team. This method is fast and efficient, making it perfect for companies that need to quickly deploy staff on the ground.
An EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to focus on their core activities. They may also provide additional services, such as Guinea-Bissau talent acquisition and visa support.
Recruitment Agencies
Recruitment agencies in Guinea-Bissau help businesses expand by connecting them with skilled local talent across various industries.
Remote People provides recruitment solutions that simplify hiring and ensure compliance with Guinea-Bissau labor laws.
For businesses looking to grow in Guinea-Bissau, Remote People offers the expertise and resources needed to build a local workforce quickly and effectively, making it a practical solution for market expansion.
Guinea-Bissau Professional Employer Organization (PEO)
A third option for doing business in Guinea-Bissau is to work with a Professional Employer Organization (PEO) or Employer of Record (EOR). These organizations provide you with the opportunity to hire highly affordable Guinea-Bissauan employees to work remotely for your company without needing an entity.
Subsidiary Incorporation
One option to start doing business in Guinea-Bissau is to open up a subsidiary in the country or else acquire one by taking over a local business. The most common structures for subsidiaries in Guinea-Bissau are limited liability companies (Sociedade por Quotas de Responsabilidad Limitada or SARL and corporations (Societe Anonyme or SA).
Setting up a SARL is a good choice for small and medium enterprises. This kind of entity requires only a single shareholder and can be a non-national. The startup minimum share capital to open a SARL is just 1 million XOF (about 1,675 USD) and needs to be deposited into a bank account during incorporation.
An investor looking to set up something larger might consider an SA. If the company is unlisted, it needs only one shareholder of any nationality. The minimum share capital needed for incorporation is 10 million XOF (about 16,750 USD).
For a listed company, that amount jumps to 100 million XOF (about 167,500 USD), and the company must have a board with at least three directors.
Branch Registration
Another option for doing business in Guinea-Bissau is to set up a branch office (filial) for your company that’s already registered elsewhere. The parent company will have unlimited liability for what this branch does, as the branch is not considered a separate entity from its parent.
However, it can be fully foreign-owned and can perform business activities such as importing and exporting goods, signing contracts, issuing sales invoices, and buying property in Guinea-Bissau.
Business Opportunities in Guinea-Bissau
Guinea-Bissau offers a range of attractive business opportunities for investors and entrepreneurs, thanks to its growing economy, abundant natural resources, and strategic location in West Africa.
The country’s government has made efforts to improve the business environment and attract foreign investment, particularly in key sectors such as agriculture, tourism, and mining.
| Business Opportunities | Reasons |
|---|---|
| Agribusiness and Food Processing | Abundant agricultural resources, growing demand for processed foods, government support for the sector |
| Tourism and Hospitality | Unique natural attractions (Bissagos Islands), growing interest in eco-tourism, untapped potential |
| Fisheries and Aquaculture | Rich marine resources, increasing demand for seafood products, opportunities for sustainable fishing practices |
| Mining and Mineral Processing | Deposits of bauxite, phosphate, and heavy minerals; growing demand for raw materials |
| Infrastructure Development | Government focus on improving infrastructure, increasing foreign investment in the sector |
Guinea-Bissau has a developing economy, which gives investors a chance to participate in and guide that development, producing benefits for themselves and the country.
These opportunities, combined with Guinea-Bissau’s low labor costs, favorable trade agreements, and ongoing efforts to streamline business regulations, make it an attractive destination for investors seeking to establish a presence in West Africa’s emerging markets.
Starting to do business in Guinea-Bissau also gives you a foothold in the large and well-populated region of West Africa.
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