Hiring workers in São Tomé and Príncipe can be attractive to companies hiring abroad, particularly if they’re looking to expand into sectors such as agriculture, tourism, and fishing. With strict environment and labor laws, this can pose some challenges, which is why an Employer of Record can be helpful when hiring in São Tomé and Príncipe.

This guide will provide a thorough overview of hiring methods in São Tomé and Príncipe, including establishing a legal entity, engaging an Employer of Record (EOR), and working with independent contractors. We’ll also cover mandatory employee benefits and how Remote People can support your business with fully compliant EOR solutions.

Why Expand Your Business to Sao Tome and Principe

Strategic Advantages of the São Tomé and Príncipe Market

There are many advantages to hiring in São Tomé and Príncipe. It has a stable currency and economy, and boasts a highly positive investment framework under the Investment Law (Law 8/2016), which provides incentives and guarantees for foreign investors. 

São Tomé and Príncipe is prominent in agriculture, tourism, and fishing industries, and is also a member of the Economic Community of Central African States (ECCAS), allowing it easy access to markets in Central Africa.

Importance of Being Aware of São Tomé and Príncipe Laws

The core labor law in São Tomé and Príncipe is the Labour Code – Law 6/2019 (Código do Trabalho). This piece of legislation provides a legal framework regarding working hours, leave entitlement, termination rules, and unions. Other important acts that relate to labor law in São Tomé and Príncipe include:

  • Data Protection: Law 06/2023
  • Social Security Financing
  • General Labour Inspectorate/OSH
  • Commercial/Investment: Investment Law 8/2016

Companies operating in São Tomé and Príncipe are recommended to consult legal professionals before hiring to ensure all working practices adhere to the latest local labor laws.

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Step 1: Define Your Hiring Needs

The first step when hiring in São Tomé and Príncipe is to fully understand your hiring needs.

This involves thinking about the types of roles you need to hire to improve your business, and how many new employees you need to bring on board.

It’s important to consider both long-term and short-term goals when defining your hiring needs to ensure new employees will benefit the future of your business.

Step 2: Familiarize Yourself with Compliance Requirements

There are many different compliance requirements in São Tomé and Príncipe’s labor law that employers must familiarize themselves with.

Employees are entitled to a range of mandatory benefits, including paid leave, overtime compensation, and minimum wage. You should also ensure you know your responsibilities as an employer in terms of tax obligations and social security contributions.

Step 3: Choose Your Hiring Method

There are three primary ways to hire employees in São Tomé and Príncipe; we’ve detailed these in the sections below:

Establishing a Legal Entity

Establishing a legal entity in São Tomé and Príncipe involves incorporating as a local company. There are many benefits to this, as it provides the business with full control of hiring new employees.

The process involves registering with the Ministry of Finance, Commerce, and Blue Economy in São Tomé and Príncipe, along with the Social Security Office and the Tax Administration Office. You must also obtain the necessary permits and pay registration fees.

There are significant financial implications to establishing a legal entity in São Tomé and Príncipe, which makes it a better method for larger companies looking to hire long-term in this country.

Using an Employer of Record (EOR)

An Employer of Record can be a useful method for companies looking to test the market and have support when hiring in São Tomé and Príncipe.

EORs act as legal employers of workers abroad, ensuring that all benefits are provided and tasks around payroll and taxes are handled compliantly.

While there are ongoing costs to instructing an EOR, they tend to be significantly less than establishing a legal entity.

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Hiring Independent Contractors

Companies carrying out project-based work may prefer to hire independent contractors instead of employees.

Contractors are generally more flexible and don’t require mandatory employee benefits as per local labor laws.

However, it’s important to use clear service agreements when hiring contractors and ensure these workers are classified correctly to avoid any legal issues in the future.

Step 4: Develop a Recruitment Strategy

Your recruitment strategy involves creating your job adverts and placing them in areas where people are looking for jobs in São Tomé and Príncipe.

When drafting your adverts, think carefully about your job descriptions to ensure they adhere strictly to anti-discrimination laws. Once you’re happy with your adverts, you can post them on job boards and professional networks that receive traffic from job seekers.

Some popular job sites for workers in São Tomé and Príncipe include:

Step 5: Conduct Interviews and Assessments

When you have a shortlist of potential candidates, you can begin interviews and assessments to find the right people for your team.

Bear in mind cultural norms as you do this to set a good first impression. People in São Tomé and Príncipe tend to value punctuality, and typically speak Portuguese, so bearing in mind these principles can help when meeting new candidates.

Step 6: Know the Legal Limitations of Background Checks

It’s common to carry out background checks when hiring in São Tomé and Príncipe. Employers can usually request criminal record information via the Directorate-General of Registeries & Notary, and education/work history can also be verified.

However, under Law 06/2023 of São Tomé and Príncipe, personal data must only be requested if it has a lawful basis, so explicit consent must be obtained, and the data requested must be relevant to the role in question.

Step 7: Draft Employment Contracts

When it comes to drafting your employment contracts, you should ensure that the contracts are written in Portuguese and include a clear job title and job description.

You should put in writing any significant information, such as probation/notice periods, employee benefits, and rules around termination of contract.

We’d advise having your contracts reviewed by a legal professional who understands labor laws in this country prior to signing.

Step 8: Register with Authorities and Set Up Payroll

Once contracts have been signed, you can register your new employees with the local authorities and set up payroll services to ensure your workers are paid on time.

All new workers should have a unique tax number and social security ID, and they should be signed up to any health insurance or private pension schemes you’re offering as a company.

Step 9: Onboard Your New Employees

The last step in the process is to welcome your new employees to the team. Provide them with all of the necessary training and resources they need to carry out their jobs, and introduce them to the colleagues they’ll be working with.

This would also be a good time to provide them with a staff handbook detailing any important company policies/procedures they should be aware of.

Key Employment Laws and Regulations

The Sao Tome and Principe Labor Code

São Tomé and Príncipe operates under the Labour Code – Law 6/2019 (Código do Trabalho) as its primary labor law.

This law provides a framework detailing the rights and obligations of employers/employees when working, such as typical working hours, salaries, contracts, and employee benefits.

Social Security Regulations

São Tomé and Príncipe operates under a Social Security System which provides financial assistance to workers/citizens during retirement, maternity, sickness, disability, and work injury.

The rates of social insurance in São Tomé and Príncipe are as follows:

Contribution TypeRateBase
Employee Contribution4%Gross monthly earnings
Employer Contribution6%Gross monthly payroll

Employment Standards and Employee Rights

Unions and Works Council

São Tomé and Príncipe’s labor code permits workers to join and form trade unions to improve employee representation.

There are no works councils in São Tomé and Príncipe, with unions providing representation primarily.

Types of Employment Contracts

There are two primary contract types in São Tomé and Príncipe:

Indefinite (Open-Ended) Contracts

The most common type of contract in São Tomé and Príncipe, these have no start/end date and are generally used for full-time employees.

Fixed-Term Contracts

These contracts are used for short-term/project-based work and have specific start and end dates.

Working Hours and Overtime

Standard Working Hours

Maximum working hours in São Tomé and Príncipe are 40 hours per week, typically worked through Monday – Friday. Full-time employees generally work 8 hours per day.

Overtime Regulations

Overtime hours are mandatory if requested by an employer in São Tomé and Príncipe. 

All overtime hours must be paid at an increased rate, as per the following:

  • 25% of an employee’s normal salary for 1st hour worked
  • 50% of an employee’s normal salary for subsequent hours worked

No more than 4 hours of overtime can be carried out per week.

Leave Entitlements

Annual Leave

Employees in São Tomé and Príncipe are entitled to a minimum of 22 working days of leave, in addition to public holidays.

Annual leave increases for employees who have not been absent from work in the respective calendar year.

Sick Leave

Workers in São Tomé and Príncipe can take a maximum of 30 days of sick leave per year. Sick leave may be paid for a certain period, which must be clearly detailed via an employment contract.

Maternity and Parental Leave

Female employees are entitled to 60 days of paid maternity leave, which is fully paid by the Social Security System.

Male employees are not entitled to paternity leave; however, this is often offered by companies as a supplementary benefit.

Termination and Severance

Notice Periods

Notice periods in São Tomé and Príncipe differ depending on the employee’s length of service.

Employees with less than 3 years of service must give one month’s notice, whereas employees with more than 3 years of service must give 2 months’ notice.

Severance Pay

Employees who have been dismissed without fault may be eligible for severance pay.

Severance pay is calculated as a minimum of 3 times an employee’s most recent monthly wages. Usually, employers give severance pay of 100% of their last monthly earnings for each year of service completed.

Mandatory Contributions

Social Security Contributions

Employers and employees make mandatory contributions to the Social Security System in São Tomé and Príncipe. The rates are as follows:

  • Employees: 4% of gross monthly earnings
  • Employers: 6% of gross monthly payroll

Health Insurance and Pension

São Tomé and Príncipe operates under a public health system, providing healthcare to citizens and workers through funding via the Social Security System. There are private medical plans in place for people wanting to expedite medical care – this is sometimes offered as a supplementary benefit by employers; however, this is not mandated by law.

The pension system in São Tomé and Príncipe is mainly run by the Social Security System, with no mandatory occupational pensions currently in place. Some employers do offer private schemes; however, these are limited.

Optional Benefits

It’s advised that companies offer employers supplementary perks alongside mandatory benefits. Some examples of these benefits could include:

  • Housing, transport, or food allowances
  • Company car
  • Performance bonuses
  • Advanced training opportunities
  • Private pension
  • Health insurance

How to Hire Employees in Sao Tome and Principe – Our Take

Hiring in São Tomé and Príncipe can be complex, but Remote People makes the process straightforward through compliant Employer of Record (EOR) services.

We take on the role of legal employer, ensuring your team is hired in line with local labor regulations. From employment contracts and payroll to tax obligations and statutory benefits, everything is managed seamlessly so you can focus on scaling your business.

Remote People gives you the structure and support needed to expand into São Tomé and Príncipe with confidence. Contact Remote People to see how we can help your business expand into São Tomé and Príncipe.