São Tomé and Príncipe: Banking Regulations Compliance Remains Key to Foreign Investment
Modernization of Payment System Boosts Trade and Commerce
In May 2021, São Tomé and Príncipe introduced payment platforms for VISA and MasterCard, modernizing its payment system. This development is expected to simplify transactions and increase accessibility to financial services.
Banking System Composition
The country’s banking system consists of one Central Bank, Banco Central de São Tomé e Príncipe (BCSTP), and four commercial banks, including two investment banks. The BCSTP supervises the national financial system, sells hard currencies, and establishes indicative interest rates.
Banking Regulations Compliance
In a significant move to strengthen the country’s financial system, the BCSTP declared three commercial banks insolvent in recent years:
- Banco Equator of Angola (2016)
- Banco Privado de São Tomé of Cameroon (2018)
- Energy Bank of Nigeria (2022)
This effort is aimed at ensuring compliance with banking regulations and maintaining a stable financial system.
Foreign-Exchange Controls
The BCSTP manages foreign exchange transactions, with the dobra (STD) being the national currency pegged to the Euro at a rate of 1 Euro to 24.50 STD since January 2010. Repatriation of capital is possible with prior authorization.
No U.S. Banks Operating in São Tomé and Príncipe
Notably, there are no U.S. banks operating in São Tomé and Principe. Instead, Portuguese banks are used for transferring funds. The government has been working closely with the BCSTP to increase access to raw materials for businesses and boost foreign investment.
Investment Climate Statement Website
The country’s Investment Climate Statement website provides information on financing options, including:
- Trade finance guides
- Methods of payment
Compliance with banking regulations remains key to successful business operations in São Tomé and Príncipe. It is essential for companies to stay updated on the latest developments in the country’s financial landscape.
Conclusion
São Tomé and Príncipe’s efforts to modernize its payment system, strengthen its banking system, and ensure compliance with banking regulations are crucial for attracting foreign investment. Businesses operating in the country must remain aware of these regulations to ensure successful operations.