The main legislative instrument is Act 2/2000 of February 11, the General Labour Law (“Lei Geral do Trabalho”/LGT), which sets out the principles and rules governing the employment relationship in Angola. The employment relationships of foreign non-resident employees are regulated by Decree 5/1995, 7 April and Decree-Law 6/2001, 19 January, which approves the foreign and non-resident employment regime.
As a rule, employment contracts are considered to be indefinite; fixed-term contracts are not permitted by law unless in exceptional cases as listed below:
Term contracts may be made for a duration ranging from 6-36 months, depending on the circumstances.
A fixed-term contract is deemed to be an indefinite-duration contract if its maximum duration has elapsed and the employee continues in service for 15 days following the date of lapsing, or the return of the worker replaced if the replacement worker has not been advised in advance (15, 30 or 60 days in advance, depending on whether contract lasted up to one year, one to three years or more than three years).
There are also other types of employment contracts provided for in the LGT: (i) the group contract; (ii) the construction-work or task contract; (iii) the apprenticeship and traineeship contract; (iv) the aboard merchant ship and fishing boat contract; (v) the aboard aircraft contract; (vi) the at-home contract; (vii) the civilian workers in military manufacturing establishments contract; (viii) the rural contract; (ix) the non-resident foreigners contract; and (x) the temporary employment contract, among others.
A written employment agreement is only required for temporary employment agreements and employment agreements entered into with foreign employees. For foreign employees, the agreement must include the following:
a) full name and registered address;
b) professional qualification;
c) place of work;
d) weekly timetable;
e) salary amount and payment method;
f) commitment to return to the country of origin after termination of the agreement;
g) date and commencement of the services to be performed;
h) place and date of signature of the agreement; and
i) signature of both contracting parties.
On the date of the signature of the agreement, the non-resident foreign worker shall sign a sworn statement through which he undertakes to respect and ensure the respect for the laws of the Angolan Republic.
The agreement shall be made in three ways and registered at the Employment Office in the company’s premises, upon an employer’s application stating the grounds for the recruitment, together with the following documentation:
a) work visa; and
b) staff plan distributed by occupational categories and citizenship.
The above mentioned application shall be registered at the respective Employment Office 30 days prior to the beginning of the employee’s professional activity.
The employment agreement must be written in a language that both parties and the Angolan authorities are able to understand and speak (in most cases this will be Portuguese).
|Statutory Working Hours ?||
Employees are not permitted work for more than eight hours daily and 44 hours weekly.
|Medical Leave ?||
While there is no mandated number of days for medical leave, employees are entitled to be absent from work with paid remuneration due to illness, without limitation, provided that such absence is documented and justified by means of a medical certificate.
Employees are entitled to three days of leave a month (up to a maximum of 12 working days a year) to provide urgent assistance to members of the employee’s household, spouse, parents, grandparents, children over 10 years of age or relatives of the same lineal degree.
Under the new General Labour Law (7/15), in medium and large companies the base salary of employees on medical leave will be fully paid by the employer for the first two months of absence. From the third month to the 12th month of absence, the employer must pay the employee 50% of the base salary until the relevant social protection entity takes over.
An employee is entitled to paid family leave of up to eight days a year.
|Annual Leave Accrual Entitlement ?||
Employees are entitled to 22 days of annual leave per year. Holidays under fixed term contracts are the exception to the rule. For the latter, the employee is entitled to 2 days for each completed month worked, when the initial or extended contract is not longer than 1 year.
|Maternity Leave in Angola ?||
Female employees are entitled to ninety days (30 days or less before, and 60 days or more after confinement) of maternity leave. Where a women worker gives birth to a stillborn child or has a miscarriage due to illness or an accident, she is entitled to 45 days of leave after the birth or miscarriage.
|Probation Period ?||
The standard probationary period stipulated by law is 60 days. However, the parties can extend this period, in writing, to 4 months when a highly qualified employee is concerned, or to 6 months when the worker is hired to perform highly complex technical work or if he/she occupies a managerial position which requires high level education.
Probationary periods for fixed-term contracts can be stipulated in writing provided that it does not exceed 15 days for unskilled workers and 30 days for skilled workers.
Either party may terminate the employment contract without providing prior justification, notice and compensation during the probationary period.
|Pension Requirements ?||
According to Angolan social security legislation, all employees are required to register with the National Social Security Institute and contribute to it on a monthly basis, unless they can prove that they contribute to the social security scheme of their home country. As such, foreign nationals are not required to make social security contributions if they can prove that they are covered by the social security system in another country.
The current contribution rates are 8% for employers and 3% for employees. The contribution amounts are uncapped.
Self-employed persons are subject to social security contributions based on a predefined monthly notional salary. The rate of the contributions is 8%, but it may be increased to 11% if additional benefits are covered.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
Shield GEO does not operate in Angola.
Angolan kwanza, Kz, AOA
|Income Tax Rates||
Individuals staying in Angola for more than 60 days and regularly or occasionally receives work-related income and/or business and professional income in Angola are subject to tax if the compensation is paid by an Angolan entity or if the respective cost of such income is allocated to an entity with a head office, residence or permanent establishment in Angola.
An employee, who, on 31 December of the relevant tax year, has a home in Angola in conditions that show an intention to maintain and occupy such home as his habitual residence or who has remained in Angola for more than 183 days (not necessarily consecutive) in a given tax year is also considered to be a tax-resident of Angola.
Residents and non-residents are subject to the same tax regime.
Individuals are subject to Angolan income tax on income from the following categories:
|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.
|Remote Payroll ?||
A remote payroll in Angola is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Angola. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Angola is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
|Local Payroll Administration ?||
In some cases, a company will register their business in Angola under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
|Internal Payroll ?||
Larger companies with a commitment to Angola may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage an Angolan payroll and can fulfil all tax, withholding tax and payroll requirements.
|Fully Outsourced Payroll & Employment ?||
Shield GEO does not operate in Angola.
Angolan kwanza, Kz, AOA
|Corporate Income Tax ?||
The current corporate income tax (known as industrial tax in Angola) rate is 30%.
|Income Tax Rate ?||
|Payroll Tax ?||
|Sales Tax ?||
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%.
|Withholding Tax ?||
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:
|Other Tax ?||
|Time to prepare and Pay Taxes ?||
|Time required to start a Business ?||
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.
A foreign company that wishes to get a work permit for one of its employees must first set up its Angolan subsidiary/branch/representative office. This Angolan entity may then apply for the work permit.
Foreign employees require a work visa or residence permit to work in Angola, which is issued by the Ministry of Public Administration, Employment and Social Security.
Angolan labour law defines a “non-resident foreign employee” as a foreign citizen having professional, technical or scientific qualifications in which Angola is not self-sufficient, contracted in a foreign country to carry on his professional activity within Angolan territory during a determined period of time. As such, the hiring of foreign employees is highly dependent on the availability of skilled Angolan labour to fill the position. Both domestic or foreign employers are only able to employ non-resident foreign labour it its workforce is at least 70% Angolan. This quota may be exceeded by special application to the provincial entities in the case of specialised employees or workers which are not available in Angola.
To employ any non-resident foreign worker, the employee must meet the following main requirements to:
The working visa is valid for the entire duration of the employment agreement but can only be issued for a minimum of 3 months and a maximum period of 36 months.
By law, working visas should be issued within 15 days, but in practice the authorities usually take between two and three months to issue them. Working visas cost about US$100.
Residence permits can be temporary (issued for one or three years, depending on whether the employee is living for at least five consecutive year in Angola or less) or they can be permanent in which case the foreign citizen is required to have lived for ten consecutive years in Angola.
In general, the following documents are required to apply for a work permit at an Angolan consulate:
Note that all documents written in foreign languages must be translated into Portuguese by a Official Translator, legalised by a Public Notary; by the Ministry for Foreign Affairs or by the Angolan embassy.
The foreign national can only engage in the professional activity for which the visa was issued for and to work only for the employer whom requested it. The employer is required to notify the SME (Serviços de Migração e Estrangeiros) of any change in the duration of the contract for purposes of compliance with the law.
Work visas are categorised in different types depending on the types of activities that are exercised. For example, a type C work visa is applicable for foreign nationals wishing to work in the petroleum industry and in civil construction, or a type D work visa will be delivered to whom applies to work in commercial, industrial or fishing sectors.
|Category||Description of Visa|
|Business visa (Ordinary Visa)||
Business visas are valid for a maximum of 90 days.
The following documents are generally required:
1. Letter of invitation in Portuguese, in Company letter-headed paper from the Angolan registered Company addressed to the Consular Section of the Embassy of Angola in London – UK, requesting the visa, declaring responsibility for stay and repatriation and must contain the following data of the applicant:
a) Full name
The letter must be dated and signed by an authorised person.
2. Fully completed application form;
3. Passport with 9 months validity and 2 blank pages;
4. One (1) recent colour passport photograph (glue to the application form). Passport photo guidance;
5. Itinerary (online, airline or travel agent pre-booking). Purchase of ticket is NOT necessary and does not automatically guarantee the granting of the visa.
6. Photocopy of Bank statement (at least 2 months old);
7. Proof of address
8. Proof of Occupation in the form of a letter from employer addressed to the Consular Section declaring employment (dated and signed by a Responsibile) with the following details:
a) Full name
When setting up a company you may want to consider these factors:
Generally, Angola does not impose any restrictions on foreigners wishing to invest in the country. However, it should be noted that some sectors (such as telecommunications, fisheries, diamond mining) require a majority of Angolan shareholders in setting up such companies.
In deciding on whether to invest in Angola, you may also want to consider the following when making your decision :-
Location will be another factor. Separate cities and regions may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your need.
There 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.
In Angola, there are two main types of corporations that can be set up:
1.Private limited company (Sociedades por Quotas de Responsabilidade Limitada) [SQ]
Traditionally, SQs are used as small and medium investment vehicles.
Investment capital requirements
The minimum capital requirement for a SQ is the Angolan kwanza equivalent of USD 1,000. Industry contributions are not allowed. Shareholders may defer payment of 50% of the minimum capital requirement, provided that the minimum is fully paid up on the effective date of incorporation.
Share capital is divided into participations called “quotas”. The par value of each quota can vary, but may not be less than the kwanza equivalent of USD 100. As such, each shareholder holds one quota corresponding to the value of its capital contribution.
SQs must have a minimum of two shareholders. However, Angola has recently passed legislation allowing the incorporation of single-shareholder companies, that is, companies with one sole shareholder, either a natural or a corporate person.
The transfer of quotas may be done via the execution of a public deed, and is subject to registration with the territorially-competent Commercial Registry Office.
SQs may be managed by one or more managers, who must be natural persons with full legal capacity, although they need not be shareholders of the company.
SQs also elect a general meeting (deliberative) and management (board of directors). Supervisory boards are optional, unlike SAs.
Accounting / auditing requirements
All SQs are required to be audited. SQs without an audit committee may be required to appoint a chartered accountant if certain thresholds are reached.
2.Public limited company (Sociedade Anónima) [SA]
SAs are typically chosen by larger companies due to their greater flexibility compared to SQs. For example, there are no restrictions on the transfer of shares in an SA.
Investment capital requirements
SAs are required to have a minimum of five shareholders, which may be natural or corporate persons (except for single-shareholder public limited companies). Where the share capital is mostly held by the State, State-owned companies or similar entities, the minimum number of shareholders is two.
The minimum investment capital requirement is the kwanza equivalent of USD 20,000, 30% of which must be fully paid up on the effective date of incorporation.
The SA’s share capital is represented by shares of equal par value. The par value must not be less than the equivalent of USD 5 expressed in kwanzas. Shares in an SA are freely transferable, although their transfer method depends whether they are bearer or nominative shares.
SAs elect the following governing bodies: general meeting (deliberative), the board of directors (the management body) and the supervisory board or statutory auditor (supervisory body).
The board of directors comprises an odd number of members determined by the articles of association. The supervisory board consists of conducted by a board of auditors comprising three or five members and two alternates. Both the board of directors and auditors are appointed in the deed of incorporation or by resolution of the shareholders. For example, the articles of association may determine that the management of the company is to be undertaken by a single managing director and that the supervision is to be conducted by a statutory auditor, provided certain requirements established by law are met.
Accounting / auditing requirements
SAs are required to be audited annually.
Steps for Incorporation
Angola is rated as the most difficult country in which to do business in the South African region, having the lowest ranking in the World Bank’s Ease of Doing Business Index. The process is lengthy and bureaucratic, which may be attributed to its weak legal environment and inefficient government processes.
Step 1: Search for a unique company name and pick up the relevant certificate
The company name can be verified at the commercial registry (Ficheiro Central de Denominações Sociais) at the Ministry of Justice.
To obtain the company name certificate, the applicant must submit an application (with a copy of identification attached) with the one stop shop (Guiché Único das Empresas) stating firstly, the company’s proposed name. Secondly, the applicant is required to request the issuance of a certificate, confirming that such name is acceptable and is not similar to any existing company name
Agency: Agency: Ficheiro Central de Denominação Social
Time: 1 day
Cost: Form: Kz 400, Certificate: Kz 29,090
Step 2: Deposit the legally required initial capital in a bank and pay the registration fee
The entrepreneur will need to deposit the initial share capital in an Angolan bank. There is a bank branch inside the one-stop shop (Guichê Único da Empresa) where the entrepreneurs can deposit the initial capital and pay the registration fee. The Guiche is an administrative structure that provides the various services at one single place (notary, company registration, tax authority, etc.). The banking institution in Angola will issue a document certifying the deposit has been made; as a rule, the share capital deposited may only be used after registration of the company;
Agency: Commercial Bank
Time: 1 day
Cost: No charge
Step 3: Verify the company documents at the Guichet Unico
Companies can either choose to engage a lawyer to draft the company’s articles of association or use the standard option provided by the Guichet. The latter option is quick, taking an hour at most. The applicant will simply need to enter the information (ID info of associates, address, activities of company) and confirms that the articles are applicable to the type of company as the Guichet has four different types of statutes.
Where the statutes are prepared by a lawyer, the process is much longer and might take 1/2 to one day. However, the advantage of this method is that the company documents are more detailed, making rejection much more unlikely. The articles of association must include, among others, the following elements: the full identification of the founding shareholders, the type of company, the company name, the corporate object, the registered office and the share capital, essential aspects relating to the running of the governing bodies, their structure and other matters considered relevant by the members;
Agency: Guichê Único da Empresa
Time: 1 day
Cost: The fees are included in the company registration fees
Step 4: Obtain the NIF at Guichet Unico
Once the documents are verified and completed, applicants must apply to the National Tax Office (Direcção National dos Impostos) to obtain the National Identification Number (NIF).
Agency: Guichê Único da Empresa
Time: 1 day
Cost: No charge
Step 5: Notarise company draft documents, register the company and pay registration fees at Guichet Unico
The applicant is required to submit the company’s dossier with all its draft documents to the Notary Public at the Guichê Único da Empresa. Once the Notary reviews and notarises the dossier, he will have a reading with the applicant present or the accredited person to ensure that there are no mistakes. The service fee is included in the Guichê fees and takes a day depending on room availability and complexity of the company’s Articles of incorporation. The notary will send a copy of the documents to each of the agencies involved a copy for approval and filing. The centralised post will distribute these to representatives of the National Press (Imprensa National), National Institute of Statistics, Tax office of the Ministry of Finance, Social Security Institute and the Ministry of Public Administration, Employment, and Social Security.
Agency: Guichê Único da Empresa
Time: 2 days
Cost: KZ 12,000 (10,000 for incorporation, 1,000 for GUE service fee and 1,000 for the publication in the official gazette).
Step 6: Obtain the Commercial Operations Permit from the Ministry of Commerce
To carry out commercial activities in Angola, a company must obtain a commercial operations permit (Alvará) from the Ministry of Commerce. All business enterprises are subject to administrative licensing of general trade and provision of commercial services activity at the Ministry of Commerce. To apply for the issuance of the commercial operations permit, the following documents must be filed with the Municipal Delegation of the Ministry of Commerce: (a) company’s notary deed of incorporation; (b) copy of the tax identification card; (c) commercial registration certificate; (d) statistical registration certificate; (e) extracts from the criminal record of the founders; (f) opinion, by the relevant administrative authority, on the company’s geographical location and social and economic feasibility; and (g) a photocopy of ID or passport. For the issuance of the commercial operations permit, one requirement is for the relevant administrative authorities to inspect the company’s premises to confirm they are suitable for commercial activities.
Some businesses may also require inspection of their facilities.
It is also possible to get a provisional license right away giving the firm a permit to operate for 180 days while the definitive license is issued by the Ministry of Commerce.
Time: 15-45 days
Cost: Depends on the size of the premises.
Step 7: Legalise the inventory book with the Tax Office
The inventory book is taken annually to the Tax Office for registration of the annual accounts.
Agency: Tax Office
Time: 1 day
Cost: USD 3
Step 8: Legalise the inventory book with the judge of the provincial court having jurisdiction over the area of the company’s headquarters
The inventory book must also be legalised with the Judge of the Provincial Court having jurisdiction over the area where the business is located.
Agency: Provincial Court
Time: 1 day
Cost: USD 20
Note that private investments (capital exceeding USD 1m) are required to be registered with the National Private Investment Agency (ANIP). For more on private investment, refer here.
When a project is approved, ANIP issues a Certificate of Registration for Private Investment (Certificado de Registo de Investimento Privado – CRIP) authorising the commencement of operations.
Upon receipt of the CRIP, the principals must register a company, publish company by-laws in the official National Gazette (Diário da República), obtain a business licence and register with fiscal authorities. If the foreign investment requires a constitution or change of an Angolan company’s by-laws, the deed of incorporation can only be completed with the presentation of the CRIP and a licence for capital import issued by National Bank of Angola (BNA) and authorised by the receiving bank.
Foreign corporations operating in Angola can operate as a branch office (sucursal) without the need to incorporate. Branches are the most common form of representation of a firm incorporated under foreign law in Angola as they allow the foreign investor to carry on its business in Angola on the same terms as a local subsidiary.
Branches are considered non-autonomous legal entities of the parent companies i.e. they are not considered separate legal entities of their own. Thus, the parent company assumes unlimited liability in relation to the obligations assumed by or imputed to the branch, as a consequence of legal acts performed by it.
Branches have no governing bodies or representative bodies of their own. Their management is entrusted to an attorney bestowed with the power of attorney by the parent company.
The procedure for opening a branch in Angola is similar to the procedure for the incorporation of a commercial company, with some differences:
Note that if the investment in the branch equals or exceeds USD 1,000,000 it constitutes a foreign investment operation.
A representative office is not an independent legal entity and hence, may not conduct direct commercial or revenue-generating activities.
It is most suitable as a form of local representation without legal capacity to perform business acts, whose objective is to look after the interests of the principal company, by accompanying and assisting the business to be carried out in Angola. As such, it is not the most appropriate form if the foreign investor wishes to carry out an economic activity in Angola on a regular basis or if the investment is large.
Note that a representative office cannot hire more than six employees and at least half must be of Angolan nationality.
Applications to set up a branch must be lodged with the National Bank of Angola (BNA) for approval. The set-up process is as follows:-
Angolan law enables the creation of joint ventures involving the use of any of the corporations listed above as well as the use of partnerships.
Another arrangement that may be considered is the use of a consortium agreement, which is very widespread in the construction and oil & gas industry. This arrangement circumvents the need to set up a legal entity.