BASIC COUNTRY FACTS

Full Name

São Tomé and Príncipe

Capital

São Tomé and Príncipe

Main Languages

• Portuguese
• Forro
• Angolar
• Principense

Population

211,028

Monetary Unit

São Tomé and Príncipe dobra

Internet Domain

.st

International dialing code

+239

Currency

São Tomé and Príncipe dobra

STATUTORY LABOR REQUIREMENTS

Probation Period

• Probation is capped at 6 months

Annual Leave

• Employees receive 26 days of paid annual leave

Public Holidays

1. New Year's Day (1^st January)
2. Martyrs' Day (3^rd February)
3. Labor Day (1^st May)
4. Independence Day (12^th July)
5. Armed Forces Day (6^th September)
6. Agricultural Reform Day (30^th September)
7. São Tomé Day (21^st December)
8. Christmas Day (25^th December)

Maternity Leave

• Female employees receive 60 days of paid maternity leave

Paternity Leave

• There is no paternity leave

Sick Leave

• Employees receive up to 360 days of sick leave

Work Hours

• The standard work week is 48 hours over 6 days

Overtime

• Overtime is paid at 125%

Notice Period

• Notice period is of 1 month

Severance

• Severance is typically a month’s salary for each year of service

13th Month Salary in Brazil

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• Employees receive annual leave of 26 days at the standard rate.

 INCOME TAX

• In general, resident individuals are subject to Personal Income Tax (PIT) on their worldwide income. Nonresident individuals are subject to PIT on income received in São Tomé and Príncipe (STP).
• In accordance with the PIT Code, individuals’ income is divided into the following four categories: 

• • Dependent income and pensions (Category A) 
  • Business or professional income (Category B) 
  • Investment income (Category C) 
  • Capital gains (Category D)

• Income included in Categories A and B is aggregated and subject to PIT at the progressive rates shown in the table below. 
• The PIT Code establishes the following formula to determine annual taxable income for each tax bracket: 

• • Taxable income for bracket = (Amount from first column x rate from second column) – Amount from third column Income up to STD11,700,000 (approximately USD536.42) is exempt from tax. 

• The following is the tax rate table.

Taxable Income (STD)	Tax Rate
Up to 11,700,000	0
Between 11,700,001 and 50,000,000	10
Between 50,000,001 and 100,000,000	13
Between 100,000,001 and 150,000,000	15
Between 150,000,001 and 240,000,000	20
Over 240,000,000	25

 

• Nonresidents are subject to PIT on gross income derived in STP. 
• This income is subject to a final withholding tax of 15%.

SOCIAL SECURITY

• Social security contributions are payable on gross income at a rate of 14% (8% for the employer and 6% withheld from the employee).

Contribution	Employer	Employee
Social Security Contribution	8%	6%

DEDUCTIBLE EXPENSES

The PIT Code allows the following tax deductions: 

• • Family deductions 
  • Double tax relief 
  • Health deductions 
  • Education and training deductions 
  • Property deductions (limited to STD15 million [approximately USD687.72])

Deductible Expenses

The PIT Code allows the following tax deductions:  Family deductions  Double tax relief  Health deductions  Education and training deductions  Property deductions (limited to STD15 million [approximately USD687.72])

IMMIGRATION 

• Temporary visas may be granted to foreign citizens to engage in, among others, cultural, study, sports or business activities (to the extent that a work visa is not required for such activities).
• A multiple-entry visa is valid for 180 days, while the single-entry visa is valid for 30 days.
• No specific work visa is issued in STP. 
• Foreign citizens must obtain a residence visa to be able to work in STP (either as dependent or independent workers).
• On request, yearly residence visas may be granted to foreign citizens. 
• After final approval, the residence visa is valid for one year, with the possibility of renewals for equal periods.

Type of Permit/Visa	Documentation	Validity	Eligibility
Tourist Visa	Valid passport Passport size photos Completed visa application form	30 days (single entry); 180 days (multiple entry)	Foreigners seeking to visit STP for tourism purposes must obtain a tourist visa
Residence Visa	Valid passport Passport size photos Completed visa application form CV Academic qualification Employment Contract	1 year	Foreigners seeking to visit STP for employment must obtain a residence visa

VALUE ADDED TAX

• Finance Minister Osvaldo Vaz stated the VAT Code bill, which will come into force in January 2021, aims to modernize the São Tomé tax system and will be operated exclusively on a computer platform, in line with IMF and World Bank recommendations.
• The proposed standard VAT rate is 10%

VAT
Standard Rate	10%

WITHHOLDING TAX

Withholding tax rates are as follows: 

WHT
Dividends	10%/15%
Interest	10%
Royalties	10%
Technical Services Fees	15%

 TERMINATION 

• Notice period is of 1 month
• Severance is typically a month’s salary for each year of service

STATUTORY BENEFITS

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period.
• Statutory benefits also include social security benefits

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Maternity Leave

Paternity Leave

Sick Leave

Overtime Pay

Notice Period

Social Security Benefits

PAYMENTS AND INVOICING

• Income included in Categories A, B (only Group 2) and D (if the individual chooses to aggregate this income) must be declared through the submission of a tax return by the end of February of the following year. 
• Income included in Group 1 of Category B must be declared by the end of April of the following year. 
• The following individuals are not required to file a tax return: 

• • Individuals who only received income included in Category A that is subject to withholding tax from a single entity 
  • Individuals subject to the final withholding tax rate 

• The tax payable, reduced by withholding tax, must be paid by the end of September of the year in which the return is submitted. 
• In accordance with the provisions of the CIT Code, individuals with income in Category B are required to make three advance payments (in June, September and December), in an amount corresponding to 75% of the tax payable for the preceding year. 
• These advance payments may be waived in certain conditions. 
• Any excessive advance payments result in a refund at the end of the year.

EASE OF DOING BUSINESS

• The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
• Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
• According to the World Bank Sao Tome and Principe ranked 170^th in the World in 2019 in terms of ease of doing business