Angola payroll and tax overview.

Your guide to doing business in Angola

Doing Business in Angola

Bordering the Democratic Republic of Congo to the north, and Namibia to the south, Angola lies on continental Africa's west coast. Angolan territory is diverse, including sub-Saharan deserts, tropical rainforests, and grassland, while its climate varies from cool and dry, to hot and humid during monsoon season. Oil is the cornerstone of Angola's economy but important industries include mining, agriculture, fishing and tourism. With recent government reforms taking effect across the country, the Angolan economy is starting to diversify, and the IMF is predicting growth for the country in 2018 and beyond. Angola is a member of the United Nations, OPEC, the African Union, and the Southern African Development Community. In 2018, Angola was ranked 175 on the World Bank’s Ease of Doing Business Survey.

So, why invest in Angola?

With the government taking steps to diversify the economy, opportunities in Angola are becoming more attractive to foreign businesses - and have made the country the fourth-largest investment destination in Africa...

  • Oil market: Although prices have fallen, oil remains important to the Angolan economy and an attractive target for foreign investors. As the second-largest producer in the sub-Saharan region, the Angolan government has taken steps to protect the oil industry during periods of downturn and continues to explore ways to enhance the financial potential.
  • Economic advantages: Economic diversification efforts are boosting non-oil industries. Specific financial incentives (such as tax breaks) have been introduced for a wide range of sectors including agriculture, construction, textiles, fishing, energy, education and tourism.
  • Tech potential: Tech industries in particular offer attractive opportunities for foreign investment: around 50% of Angola's population is under 20 years old, with an appetite for consumer technology. Sustainable tech is also gathering momentum: the engineering, farming and renewable energy sectors attract interest from many African nations.
  • Government support: Government-backed financial bodies, like the Fundo Activo de Capital de Risco Angolano (FACRA) are helping international businesses partner with Angolan counterparts to kick-start a range of projects. Government entities are able to offer the benefit of their expertise and experience in the marketplace to boost chances of success.
  • Industrial incentives: In addition to tax exemptions for the purchase of land and the construction of industry premises, customs tax exempt status is also granted on the import of industrial equipment, goods and raw materials.

Foreign Direct Investment in Angola

Angola is very familiar with foreign investment and the oil and gas sector have invested in Africa’s 2nd largest oil producer for a number of years. However, companies considering investing in Angola should not think that opportunities begin and end with oil and gas related enterprises.

Many investors are unaware of Angola’s rich agricultural history: the county was a key exporter of numerous agricultural products, including coffee, maize, tobacco and rice and, in the early seventies, Angola became the world’s fourth largest coffee exporter. In more recent years, the growth of the oil industry has helped fuel a financial boom.

Angolan real estate requires the least explanation and as a result of the oil and gas industry real estate prices have continually increased over the years. Though high towers and condominiums bring big returns, the greatest opportunity exists in lower-cost housing. About a third of the country’s population lives in the capital and as this number grows, the low cost housing demand in Luanda will only increase.

The Angolan banking sector has seen astronomical growth with total assets skyrocketing from $2.9 billion in 2003 to an estimated $62.5 billion in 2012. Such figures make the sector the third largest in Sub-Saharan Africa after Nigeria and South Africa.

Registering A Company and Establishing an Entity in Angola

A company is required to have a legal entity established in order to carry out business in Angola with no legal restrictions, including processing a payroll. A foreign company has two options:

  1. Register a Branch or
  2. Incorporate a Local Company.

Foreign Workers are required to hold a Visa in order to be able to work in Angola with visas only being granted to foreign workers of companies incorporated or having branches registered in Angola.

Setting up of a Legal Structure in Angola

If the company activities continue for a considerable period of time and the company decides to keep its personnel in the country for more than 1 year (normally a permanent establishment is triggered if personnel stays in the country for more than 90 days in a 12 month period), a legal structure should be established for a business.

In this situation, the company will have to register either a Branch or a Subsidiary in Angola, for the purpose of developing activities.

Private Investment Regulations in Angola

In terms of foreign investment, there are no differences between a Branch and a Local Company as both qualify as Private Investment Operations under the New Private Investment Law (Law 20/11, of 20 May 2011) (“NPIL”). It is however possible to incorporate a local company/register a branch outside the scope of Angola National Investment Private’s regime.

If foreign investors decide to incorporate a local company/register a branch under the NPIL’s regime, each investor will be required to make a minimum investment of USD 1 million. The advantage of the NPIL’s regime is that only investments approved under the NPIL may enjoy the benefits and privileges such as the right to repatriate profits and/or dividends and the possibility to be eligible for Tax & Customs Incentives.

Investments below USD 1 million are not subject to the NPIL and, consequently, do not enjoy the above mentioned benefits and privileges. In terms of minimum investment to be made by foreign investors for purposes of incorporating a local company/registering a branch outside the scope of the NPIL, a minimum investment of USD 500,000 per investor will be necessary. In order to submit the project to the Agency for Investment Promotion and Exports of Angola (APIEX), the documents required may vary in accordance with the regime applicable to the situation in question and the process may take between 10 to 16 weeks.

A wide range of tax incentives is available to the private investor under private investment laws in Angola. Together with the investment application form and other necessary documents, the foreign investor should submit a formal petition requesting, in the terms foreseen in the respective law, the application of tax and customs benefits to its investment project. The amount of investment may be subscribed in cash, technology, equipment or real estate. However, part of the investment (approximately 30%) is usually required to be in cash, either local or foreign currency.

There are no legal restrictions in the subsequent use of the cash – assuming the share capital of the company or the one allocated to the branch is fully subscribed in cash – to perform payments derived from the activities carried out in Angola (e.g. payments to suppliers, payments of income & corporate tax, legal and accountancy fees among other operations). After the approval of the investment project, the foreign investor intending to carry out business in Angola may choose one of the two major forms of business organization – to incorporate a subsidiary company or to set up a branch of a foreign company.

In this context, when choosing the type of legal form, the company should take into consideration several vectors, such as: taxation issues, local regulation on the hiring of contractors and amount of emoluments to set up either structure, among others. It may be required to have a local partner or to set up a local joint venture with a local partner in order to provide certain services within the oil industry.

The following documents must be provided to register a branch or to incorporate a subsidiary in Angola:

  1. Certificate of Incorporation
  2. Copy of Articles of Association/ By Laws
  3. Board minutes stating decision to set up legal structure in Angola
  4. Power of Attorney authorizing a Representative to act on behalf of a company for incorporation/registration purposes
  5. Declaration of the Angolan embassy in company’s country of incorporation stating that the company is duly incorporated in accordance with the laws of the country

All documents required for the registration process must be:

  • Translated into Portuguese
  • Legalized by a Notary Public
  • Certificated by the Angolan embassy in company’s country of incorporation

The main steps for registration of a legal structure are as follows:

  1. Obtain Central Company Name Registry’s approval to use investor’s corporate name in Angola;
  2. File Application Form with ANIP (National Private Investment Agency) (not required if registered outside the Private Investment Law);
  3. Obtain BNA license to import Investment Funds;
  4. Publication in the official gazette of translated Articles of Association for Foreign Company;
  5. Tax Registration;
  6. Provisional Commercial Registration;
  7. Open a Bank Account;
  8. Definitive Commercial Registration;
  9. Statistical Registration;
  10. Obtaining commercial (“industrial”) Operations Permit (“alvará”), if required;
  11. Social Security Registration, if applicable;
  12. Import / Export license, if applicable.

The APIEX process is long, therefore foreign investors use local law firms to incorporate a local structure (national partners) and afterwards acquire it through Private Investment with APIEX in order to have the process complete as soon as possible.

For the setting up of the local structure the steps are: registration of the name, drafting of the articles, organize the public deed followed by the statistical, tax and commercial registration and the publication in the official gazette. The timeframe is 4 working days.

Business Banking in Angola

It is mandatory to make payments to both employees and the authorities from an In-Country bank account. Banks are open to the public from 08:00 am – 12:30 pm and 14:00 pm- 15:00 pm Monday to Friday. Some banks are open on Saturdays from 08:00 am – 12:30 pm.

Working Days And Working Hours In Angola

The working week in Angola is Monday to Friday. The maximum number of hours per week as per the Angolan labour law is 44 hours. Commercial Offices are open Monday to Friday from 08:00 am to 06:00 pm. Some offices are open on Saturday mornings.

Basic Facts about Angola

General Information

Angola is a southern, sub-Saharan African state located on the continental west coast. Angola shares borders with the Democratic Republic of Congo to the north, Zambia to the east, and Namibia to the south. Although civilisation has existed in the territory which became Angola since prehistory, the country’s recent history was shaped by Portuguese colonisation, which began in the 16th century. Angola achieved independence in 1975, but experienced a period of political turmoil until 2002, when it emerged as a stable presidential republic. With vast natural resources, Angola has grown as a destination for international business and is amongst the fastest growing economies in the world. Covering approximately 1,246,700 square kilometres of desert, tropical forest and grassland, and with a population of over 25 million, it is the 23rd largest country in the world.

Full Name: The Republic Of Angola

Population: 25.7 Million (World Bank, 2015)

Capital: Luanda

Major Languages: Portuguese (Official), Umbundu, Kimbundu, Kikongo

Monetary Unit: 1 Kwanza = 100 Lwei

Main Exports: Oil, Diamonds, Minerals, Coffee, Fish, Timber

GNI Per Capita: US $3,440 (World Bank, 2016)

Internet Domain: .Ao

International Dialling Code: +244


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Dates are usually written in the day, month and year sequence. For example, 1 July 2012 or 1/7/12.

Numbers are written with a period to denote thousands and a comma to denote fractions. For example, AKZ 3.000,50 (three thousand Kwanzas and fifty cêntimos).

Income Tax in Angola

Income Tax in Angola applies to any income earned in the country, and rates for individuals (resident and non-resident) are levied on a sliding scale varying from 5% to 17%. Tax does not apply to foreign earnings, except for companies registered in Angola, operating overseas (in which case 'Industrial Tax' must be paid).

Residence: Residence is not defined in Angola Tax Law; all individuals are taxed irrespective of their residence.

Taxable Income: Individuals are subject to a separate tax on income from Business, Employment, Investments and Property. Employment income is broadly defined and includes Benefits-In-Kind.

Capital Gains: Capital Gains obtained by an individual are only taxable when realized as part of a Business Activity - in which case their tax rate is 30% (the standard corporate income tax rate for unincorporated businesses).

Deductions and Allowances: Vacation and Severance Pay (severance pay, depending on the factual cases), Accident and Illness Benefits and the "13th month" bonus are excluded from taxable employment income.(Vacation and Christmas Allowances are only not subject to PIT up to the limit of 100% of Gross Basic Salary).

Social Security in Angola

Social Security is mandatory for all employees working in Angola who are Angolan nationals or foreign residents.

  • Expatriates are not required to make their social security contributions in Angola, provided they are covered by a similar social security system in their home country.
  • Social security contributions are payable monthly by employers and employees to the National Social Security Institute (“Instituto Nacional de Segurança Social – INSS”).
  • The payments are calculated based on monthly salary and a few additional remunerations received by employees. The social security contribution payable by an employee amounts to 3% of their Gross Salary.
  • The employer must withhold the contribution due from their employees and pay the amount which has been withheld to the Authorities. The rate for employers is 8% of employees’ gross salary - plus any further allowances. In total, the employer must submit to the Angolan Social Security Authorities a total of 11% as contributions.
  • The employer is required to withhold the employee’s contribution and pay both contributions by the 10th of the month following the month in which the salaries were paid.

Reporting Tax in Angola

PIT (personal income tax) is paid through the withholding tax mechanism operated by the employer on a monthly basis and submitted before the end of the following month.

The employer should also comply with the Mod 2 (Annual PIT tax return) which must be submitted to the Tax Authorities by the end of February of the following year (last working day). This can be submitted in-country by the payroll provider on behalf of the customer. These forms require the customer’s signature and stamp.

New Employees in Angola

In Angola, the payroll and registrations of a new employee are the responsibility of the employer. If an expat employee needs to be included in the local payroll, a local labour contract must be registered with the labour entity known as MAPTSS (Ministério da Administração Pública, Trabalho e Segurança Social). In principle an expat employee will be exempted from Social Security, assuming they are covered by a similar system in their home country.

Angolan nationals should be included on the payroll and registered with Social Security (SS) entities. Unless the employee proves they are contributing to another social security scheme, all employees must register with the National Social Security Institute and contribute. Expatriate employees are required to contribute only if the employee has an Angolan Residency Permit. All new employees must be registered within the 30 days of commencing the employment.

The following information and documents are required to be provided by every new employee in Angola:

  • ID card (Angolan nationals only)
  • Passport (expatriate employees only)
  • Work Visa (expatriate employees only)
  • SS card (only applicable to expat employees in certain circumstances)
  • Angolan Taxpayer Card

Leavers In Angola

When an employee ends their contract in Angola, any remaining salary or benefits owed should be paid with the last pay slip. The employer bears responsibility for notifying the Angolan authorities about the termination of contract, and deregistering the employee from social security.

Payroll in Angola

Beyond ensuring employees are paid accurately and on time, the primary duties of payroll departments in Angola are to ensure companies comply with the country's tax rules and regulations. Specifically, this involves paying employees' Individual Income Tax (IIT), employee and employer social security, consumption (sales) tax, business tax and withholding tax (WHT). Under article 22º of the PIT Code, payroll reports must be kept for a minimum of 5 years.

In practice, payroll in Angola may be delivered internally, or outsourced to a third party locally, or remotely (via a foreign company). Foreign companies setting up in the country will need to incorporate and join the Angolan company registry if they wish to administer payroll internally. Foreign companies may engage a global payroll provider to help ensure compliance with Angola’s tax laws as they deliver pay to their employee population working within the country’s legislative territory.