While Angola has a large labour force, the workforce is mainly unskilled and the labour market is heavily restrictive for example fixed-term employment contracts are disallowed by law and the legislated minimum wage is among the highest in Africa.
Foreign companies operating in Angola may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Angola are: Individual income tax (IIT) for employees in Angola, social security costs, Consumption Tax, withholding tax, business tax and permanent establishment concerns.
Foreign nationals wishing to work in Angola are required to obtain a work permit. Generally, companies are subject to a maximum quota of 30% foreign nationals per company.
here are three types of business forms available to foreign companies in Angola. Each of these business forms has distinct advantages and disadvantages, as well as differing scope of business activities, registration requirements and minimum capital requirements. In most cases it will depend on the degree of commitment a company has to Angola and the planned business activity.
When setting up a company in Angola, you have the following options:-
This article provides a general guideline for foreign businesses on entering Angola for business purposes. In particular, it looks at common pathways to establishing a business presence in Angola, generally through a corporation or branch office. In addition, various economic, tax and regulatory factors are provided throughout as a source of useful information to assist those who will enter the Angolan economy. The guide also looks at some immigration requirements such as obtaining appropriate visa status.
Data is based on the time of writing, November 2015 or closest available dates.
GEO Solutions or DIY Employment
Companies entering Angola must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Angola Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Angolan entity established that can run payroll.
A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
Please contact us for a quote
Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.
|Tax Returns Supplied||
|Corporate Tax Requirements||
The Angolan tax year follows the calendar year.
The annual corporate income tax returns are due by the last day of May or April, respectively, following the year to which the income relates. Tax is paid in four instalments. The first three correspond to advance payments based on the expected tax to be paid or, if unknown at that date, 75% of the taxable income computed on the previous year multiplied by the tax rate (30%). The instalments are paid in January, February, and March. The final tax must be settled by the last day of the month of April or May of the current year, depending on the group the taxpayer is classified in.
|Employers Social Security and statutory contributions||
Employers are required to contribute 8% of the employee’s gross monthly remuneration. For more details, please refer to the section on Employment.
|Employees Social Security and statutory contributions||
Employees are required to contribute 3% of the employee’s gross monthly remuneration. For more details, please refer to the section on Employment.
|Corporate Income Tax Rate||
The current corporate income tax (known as industrial tax in Angola) rate is 30%.
Consumption tax is due on imported or locally produced goods at rates varying from 2% up to 30%. Consumption tax also applies on some services (e.g. telecommunications, utilities) with rates ranging from 5 – 10%.
Angola levies withholding tax (WHT) on payments for services provided to resident and non-resident entities at the rate of 6.5%. For Angolan taxpayers, this is regarded as an advance payment of the corporate income tax (CIT) due at the year-end; the deduction of these WHTs against tax CIT payable is now to be limited to a period of five years. For non-resident companies, this is a final tax. Services that are not subject to withholding are now expressly foreseen.
With the introduction of the Investment income tax (Imposto sobre a Aplicação de Capitais or IAC), Angola now does not have a separate WHT for dividends, interest, and royalties. The IAC rate is 15%, except for certain income, for which the rate is 10% or 5%. The tax rate is 10% for the following income: