Angola

Angola is very familiar with foreign investment and the oil and gas sector has invested in Africa’s second 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. Prior to the civil war, Angola 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.

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 the high towers and condominiums will 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.

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.

General Information

• Full Name: The Republic of Angola
• Population: 35.588 million (World Bank, 2022)
• 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 $1,880 (World Bank, 2022)
• Internet Domain: .ao
• International Dialling Code: +244

How Do I Say in Portuguese?

• Hello: Olá
• Good Morning: Bom Dia
• Good Evening: Boa Noite
• Do You Speak English?: Falas Inglês?
• Good Bye: Adeus
• Thank You: Obrigado (If You Are Male) Obrigada (If You Are Female)
• See You Later: Até Logo

Dates

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).

Bordering the Democratic Republic of Congo to the north and Namibia to the south, Angola lies on continental Africa's southwest coast, on the shores of the south Atlantic Ocean.

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.

In 2019, Angola’s GDP was around $208 billion and with recent government reforms taking effect across the country, the Angolan economy is starting to diversify.

A 2019 review by the IMF confirmed that Angola’s economic program was on track, prompting the approval of a $247 million disbursement to aid ongoing consolidation and diversification of the economy.

Angola is a member of the UN, OPEC, the African Union, and the Southern African Development Community.

In 2019, Angola was ranked 177 on the World Bank’s Ease of Doing Business Survey.

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.

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 – 12:30 and 14:00 - 15:00 Monday to Friday. Some banks are open on Saturdays from 08:00 – 12:30.

In Angola, any company aiming to conduct business without legal constraints, including processing payroll, must establish a legal entity. For foreign businesses looking to enter the Angolan market, there are two primary options:

1. Registering a Branch
2. Incorporating a Local Company

Each option has its own set of procedures, benefits, and considerations, which are essential to understand for making an informed decision.

Registering a Branch in Angola

A foreign company may choose to register a branch in Angola. This option allows the parent company to retain full control while operating in Angola. The process involves:

• Registering with the Angolan Commercial Registry.
• Obtaining necessary approvals and licenses specific to the industry.
• Complying with local financial and legal reporting requirements, which are generally aligned with the parent company's standards but must adhere to Angolan regulations.

Branch registration can be an efficient way to establish a presence in Angola, especially for companies testing the market or those with specific project-based operations.

Incorporating a Local Company

Alternatively, foreign investors may incorporate a local company in Angola. This process involves:

• Choosing an appropriate company type (e.g., Limited Liability Company, Public Limited Company).
• Registering the company with relevant Angolan authorities.
• Meeting local requirements for share capital, directorship, and company structure.

Incorporating a local company in Angola offers more autonomy within the Angolan market and can be beneficial for businesses planning a long-term presence.

Employment of Foreign Workers

For foreign workers to be legally employed in Angola, they must obtain a work visa. This is a crucial step and includes:

• Ensuring the employing entity is either a registered branch or an incorporated local company in Angola.
• Applying for and obtaining the work visa from Angolan immigration authorities.
• Meeting the requirements for employment of foreign nationals, which may include quotas or specific conditions based on the industry and job role.

Setting up of a Legal Structure

This should be the case 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 one year (normally a permanent establishment is triggered if the personnel stay in the country for more than 90 days in a 12-month period). In this case, the company will have to register either a branch or a subsidiary in Angola, for the purpose of developing activities.

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 AIPEX (Private Investment Agency & Exports Promotion) (not required if registered outside the Private Investment Law);
3. Publication in the official gazette of translated Articles of Association for Foreign Company;
4. Tax Registration;
5. Provisional Commercial Registration;
6. Open a Bank Account;
7. Definitive Commercial Registration;
8. Statistical Registration;
9. Obtaining commercial (“industrial”) Operations Permit (“alvará”), if required;
10. Social Security Registration, if applicable;
11. Import / Export license, if applicable.

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 roughly four working days.

A foreign citizen with a temporary employment contract, which is in the interest of the state or for an Angolan Chartered Company, can obtain a Work Visa.

After the work visa has been issued it must be used within 60 days. The visa is only valid for 12 months; it allows for multiple entries and can be extended until the end of the employment contract.

The work visa holder is only entitled to engage in the occupation that the work visa was issued for and for the employer who requested it. The employer must inform the appropriate authority of any changes in the duration of the contract.

Family or dependents of the employee need to apply for a temporary stay visa if accompanying the holder of the work visa.

Angola income tax rates for individuals (resident and non-resident) are levied on a sliding scale at rates which vary from 10% to 25%.

Tax Rates

Employment income is taxed at progressive rates up to a maximum of 25%. The withholding tax on investment income is a final tax for individuals. Taxable capital gains are included in business income and taxed at the standard corporate income tax rate of 25% for unincorporated businesses. Professional fees (e.g. self-employment) are subject to withholding tax at an effective PIT (personal income tax) rate of 6.5 %.

For Group A taxpayers (employees) residents and non-residents
Income up to 100,000 Angolan kwanza (AOA) is exempt.

A progressive rate up to 25% applies to higher income brackets, with specific payable tax amounts and percentages based on the excess over each income threshold.

For Group B (self employees that develop independent professions listed in the PIT Code) 

Tax rate of 6,5% on services provided by Taxpayers of Group B, being that, on income not subject to PIT withholding, the tax rate applicable is 25%

Group C (self- employees that develop an industrial and commercial activity and fall outside the list of independent professions mentioned in point 2 above)

Accordingly with the respective activity are subject the Table of Minimum Profits.

These income tax rates are part of the Personal Income Tax (PIT) system in Angola, which includes different groups (A, B, and C) with varying tax treatments based on the nature of their income and employment status.

Tax returns must be submitted to authorities no later than the end of the month following the one it respects to.

Expatriate employees are exempted to social security discounts in Angola, provided that they are covered by a similar social security system in their home countries.

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 social security contribution payable by the employee amounts to 3% of the Basic Salary plus any other components subject to SS deductions. 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’ Basic Salary plus any other components subject to SS deductions.

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 one social security respects.

These contributions are used to finance various employee benefits under the social security program. Employers are responsible for withholding the social security contribution from the employee's wages and for delivering both the employer's and the employee's contributions to the social security authorities on a monthly basis.

For compliance, employers must pay these social security contributions by the 10th of every month, and failure to do so may result in interest charges on the overdue amounts.

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 Mod2 (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.

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), and this registration has a fee associated of 5% of the salary declared on the local labour contract.

In principle, an expat employee will be exempted of Social Security assuming they are covered by a similar system in their home country.

Unless the employee proves their contribution to another social security scheme, all employees must register with the National Social Security Institute and contribute. 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:

• 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

Payment for leavers is to be made with the employee’s last payslip and the leaver must be de-registered from social security.

It is not legally acceptable in Angola to provide employees with online payslips.

It is mandatory that payslips are in Portuguese

Reports

Payroll reports must be kept for at least five years, as foreseen on article 22º of the PIT Code. The records can be kept electronically as long as the records can be printed out on request.

Angola Payslip Example

Collective Labor Agreements

Most employment contracts in Angola are Collective Labor Agreements. These types of contracts must be considered by employers.

Holiday Accrual / Calculations

All workers are entitled to, for each year of actual service:

• 50% of base salary corresponding to the salary of the holiday period as a holiday bonus;

• 50% of base salary for the month of December as a Christmas bonus.

The values above may be improved by collective agreement or individual employment contracts.

Maternity Leave

Maternity Leave entitlement is up to 90 days after the birth of the child. The salary is maintained and the employer pays 100% of the salary. The employer can request from the Social Security Authorities the reimbursement of this allowance, within the term of 120 days counting from the date of the birth.

Maternity Leave payments are calculated using the average salary of the most recent two remunerations attributed in the 6 months prior to the beginning of maternity leave.

Please note that for this purpose, Christmas, Vacations or variable remunerations are not included.

Paternity Leave

There is no Paternity Leave entitlement in Angola. It may be given as per the policy of the employer.

Sickness

Sickness pay would depend on the type of sick leave combined with the work insurance policy that the employer has in place.

National Service

Angola has a conscript service obligation of 2 years for males between the age of 20 and 45 years.

New General Labour Law

On December 27th 2023 Law 12/23 was published, which approved the General Labour Law, revoking the former Law 7/15. The law shall come into force on 26 March 2024.

Among several changes introduced we would like to highlight the following:

• Elimination of concepts of Micro, Small, Medium and Large Companies
• The obligation to reduce to writing the fixed-term employment contracts
• A reduction of the maximum duration of the fixed-term employment agreements, depending on the legal grounds invoked for their conclusion
• New Criteria for the Determination of Remuneration, Compensation and Indemnities;
• The rules on Overtime, Weekly Rest and Work on holidays were amended
• The increase of the list of disciplinary measures by introducing the temporary category demotion and the suspension of work with loss of remuneration
• Flexible working hours were introduced for employees with family responsibilities
• New Rules on Personality Rights
• Supplementary Maternity Leave (granted for a period of four weeks and non-remunerated)
• Paternity leave (granted for seven business days, consecutive or interpolated, non-remunerated)
• Flexible working hours were introduced for employees with family responsibilities

The minimum wage in Angola for the year 2024 is set at 41,830 Angolan Kwanza (AOA) per month.

The Presidential Decree no. 54/22, dated February 17th, updated the amount of the National Guaranteed Minimum Wage by economic sector. The National Guaranteed Minimum Wage has now been defined as:

• 48,271.73 Akz for the commerce and extractive industry sectors
• 40,226.44 Akz for the transport, services and manufacturing sectors
• 32,181.15 Akz for agriculture and economic activities not included in the previous categories

Until another decree is published with this regard, which is likely to happen during 2024, the above minimum wages are still valid for 2024.

The working week in Angola is Monday to Friday. The maximum number of hours per week as per the Angolan labor law is 44 hours.

Commercial offices are open Monday to Friday from 08:00 - 17:00. Some offices are open on Saturday mornings.

There are multiple statutory holiday schedules within Angola. Below are the statutory national holidays in Angola for 2024.

Expenses

General expenses like-car mileage, company cars, etc. will only be included in the payroll if they are considered as a part of the employee’s income. If not, these are costs borne by the employer.

In 2024, Angola underwent significant changes in both tax and employment laws. Key changes include:

General Labour Law

Law 12/23, approved on 27 December 2023, introduced a new General Labour Law, which made indefinite employment contracts the norm and allowed fixed-term contracts only in exceptional cases defined by law. New disciplinary measures were introduced, including temporary demotion and suspension of work with loss of remuneration. The law also introduced flexible working hours for employees with family responsibilities, non-remunerated complementary maternity leave for four weeks, and non-remunerated paternity leave for seven business days. Additionally, the law established new chapters on personality rights and eliminated the categorization of companies for calculating compensation and indemnities.

Tax Reforms

• The tax landscape in Angola saw various reforms, including:
• Introduction of the Extraordinary Levy on Foreign Exchange Operations, with rates of 10% for corporate entities and 2.5% for individuals.
• Changes to the Corporate Income Tax (CIT), including a reduction in the late payment fine from 35% to 25% and extension of the carry-forward period for tax losses from 3 to 5 years.
• Amendments to the Employment Income Tax (IRT) to increase the tax burden on higher incomes while reducing it for lower incomes. New tax brackets were introduced, and the tax base was expanded to include accessory income and other financial benefits.
• Property Tax rules consolidation, affecting ownership, rental income, and transfers of real estate.
• Changes in the Value Added Tax (VAT) regime, particularly concerning property conveyance and leasing, and the hospitality sector.
• The removal of the time limit to carry forward credits related to provisional CIT payments.

These changes are aimed at refining the taxation system and aligning labor laws with contemporary employment practices, enhancing workers' rights and responsibilities while ensuring a fairer tax regime.

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.