Hire Employees in Cabo Verde

Two routes exist. Registering a Cape Verdean entity gives you direct employment, followed by INPS enrolment as a contributor.

An Employer of Record removes that setup. The EOR is the legal employer, runs payroll, files the monthly salary sheets and remits contributions, while day-to-day direction stays with you.

Registration is time-bound. An employer must register as a contributor within 15 days of starting activity, and must register each new worker within 15 days of their activity beginning.

Cabo Verde runs four separate INPS contribution regimes, and picking the wrong one is the defining risk here.

For standard employees, trabalhador por conta de outrem, the monthly contribution is 24.5%, split 16% employer and 8.5% employee.

The other three run at different rates. Self-employed people pay 19.5% in full. The domestic service regime is 23%, split 15% employer and 8% employee. The REMPE regime for micro and small enterprises is 8%, borne by the worker.

The domestic service split is the one to watch. At 15% and 8% it sits close enough to the general 16% and 8.5% to look plausible on a payslip, but applying it to a standard employee under-contributes on both sides.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a Cape Verdean entity somewhere between 12 and 20 employees. Model both, see EOR vs Entity for the framework.

Under the general employee regime the employer contributes 16% and the employee 8.5%, giving a combined 24.5% of monthly salary to the Instituto Nacional de Previdência Social.

The employer calculates, deducts and remits both shares, and files the Folhas de Ordenado e Salários, the monthly salary sheets, alongside payment.

Payment is due by the 15th of the month following the one it relates to.

There is a specific statutory threshold for serious non-compliance. An employer that submits salary sheets for four consecutive months without paying the contributions falls into grave incumprimento, formally recognised serious default. Filing without paying is therefore not a neutral holding position.

One point needs local confirmation. A commercial source states that contributions apply only up to an established social security ceiling, with salaries above it contributing only to that level. No such ceiling appears in the INPS obligations guidance, verify the position before configuring payroll for senior salaries.

Gross monthly salaries in escudos. Employer INPS is 16% under the general employee regime.

Benchmarks below are gross monthly salaries in escudos. Employer INPS is 16% under the general employee regime.

Payroll is monthly. IRPS is withheld from salaries each month by the employer and paid to the tax authorities on the employee’s behalf.

The system is progressive, with the amount withheld depending on total gross income, the applicable band and any deductions or allowances. The employee’s 8.5% INPS contribution is deductible from gross income when computing IRPS, which reduces the effective burden of the deduction.

Three deadlines share the 15th. Contributions are due by the 15th of the following month; cessation or suspension of a contract must be notified by the 15th of the month after it occurs; and salary sheets accompany the monthly payment.

Confirm the current IRPS bands with the tax authority before configuring payroll, since the structure is subject to periodic revision.

Progressive IRPS bands withheld monthly. Confirm current thresholds with the tax authority.

Employment is governed by the Labour Code, with contributions under INPS regulation.

Confirm the current minimum wage before contracting. It is revised periodically and was not verifiable in the sources consulted for this build, take it from the responsible ministry rather than a secondary guide.

The escudo is pegged to the euro, which makes cost comparison with euro-denominated markets unusually stable and removes most currency risk from multi-year planning.

Cabo Verde has positioned itself as a remote work destination, and its stability and time zone make it practical for European-facing roles.

Contracts should record pay, hours, leave, notice and termination terms.

Register the worker with INPS within 15 days of their activity starting, or notify a change of employment within the same window.

Confirm which contribution regime applies before the first payroll run, since four operate in parallel at different rates.

Working hours and overtime follow the Labour Code.

Because the general regime applies to gross monthly salary, overtime and regular allowances feed the contribution base at the full 16% employer rate, subject to the ceiling question noted above.

The employee share remains deductible for IRPS regardless of how the pay is composed.

Cabo Verde observes national and Catholic public holidays, including Democracy Day and Heroes’ Day in January and Independence Day in July.

Cabo Verde observes national and Catholic public holidays, including Democracy Day and Heroes’ Day in January and Independence Day in July. Dates and any substitution rules are set out below.

INPS provides the statutory social protection, funded by the combined contribution.

Coverage differs by regime, which is why the classification question matters beyond cost, a worker enrolled under the wrong scheme may have different entitlements as well as a different contribution.

The REMPE regime, aimed at micro and small enterprises, is set at 8% borne by the worker, materially different from the general employee position.

Employers must cooperate with INPS agents on missions requiring direct engagement, which is an express obligation rather than a courtesy.

Termination follows the Labour Code, with notice and severance set by statute and contract.

Cessation or suspension of a contract must be notified to INPS by the 15th of the month following the month in which it occurred. That is a separate deadline from the contribution payment and is easily missed at exit.

Final pay including accrued leave is due on separation and must appear in the salary sheet for the period.

Outstanding contributions should be cleared before exit, given the four-month serious default threshold.

The escudo is pegged to the euro, so euro-denominated cost models translate directly and remain stable across planning horizons.

Work authorisation for foreign nationals is employer-sponsored; confirm current requirements before committing to a start date.

The employee contribution being deductible for IRPS is worth explaining at offer stage, since it makes the headline 8.5% deduction less costly in net terms than it first appears.

Applying the wrong regime is the dominant risk. Four run in parallel: 24.5% for employees, 19.5% for self-employed, 23% for domestic service and 8% under REMPE. The domestic rate of 15% and 8% is close enough to the general 16% and 8.5% to pass unnoticed.

Filing salary sheets without paying is formally recognised default. Four consecutive months of that puts the employer in grave incumprimento.

Three 15-day or 15th-of-month deadlines operate, contributor registration, worker registration, and notification of cessation or suspension.

Note also that the existence of a contribution ceiling is asserted by one source but absent from INPS guidance, and that the minimum wage and IRPS bands both need confirming locally.

Work backwards from the start date. An EOR hire takes two to four weeks; entity formation runs two to four months.

Confirm the applicable regime first, it changes both the rate and the split.

Register within 15 days, file salary sheets with payment rather than ahead of it, verify the minimum wage and IRPS bands locally, and diarise the cessation notification separately from the monthly remittance.