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Investing in São Tomé and Principe: A Guide for Foreign Investors

São Tomé and Principe, a small island nation off the coast of West Africa, has been actively promoting economic growth by attracting foreign investment. The country’s business-friendly environment, favorable investment laws, and competitive tax regime make it an attractive destination for investors.

Company Incorporation

Incorporating a company in São Tomé and Principe is a swift process that can be completed within 8 days at the Guichet Único, a one-stop shop designated by the government. The minimum share capital requirement for companies is Dobra 1,000,000 (approximately EUR 400), while sole shareholder companies require a minimum of Dobra 20,000,000 (approximately EUR 800).

Key Requirements

  • Minimum share capital: Dobra 1,000,000 (approximately EUR 400)
  • Sole shareholder company: Dobra 20,000,000 (approximately EUR 800)

Foreign Investment Rules

Foreign investment in São Tomé and Principe is governed by the country’s Investment Law, which provides equal treatment for all investors, regardless of nationality. There are no restrictions on equity participation or control of local companies by foreign investors.

Tax Benefits

  • Corporate income tax rate: 25%
  • Value-added tax (VAT) rate: ranging from 7.5% to 15%

Foreign Exchange Regime

The import and export of foreign capital are subject to specific procedures before the Central Bank of São Tomé and Principe (BCSTP). The exchange regime is regulated by law, which governs commercial and financial operations that may influence the balance of payments.

Key Requirements

  • Import and export of foreign capital: subject to specific procedures
  • Exchange regime: regulated by law

Taxation

São Tomé and Principe has a comprehensive taxation system, including individual income tax (IRS) and corporate income tax (IRC). Resident entities are taxed on their worldwide income, while non-resident entities without a permanent establishment are only taxed on income attributed to such establishment. The IRC general tax rate is 25%.

Tax Rates

  • Individual income tax (IRS): varies
  • Corporate income tax (IRC): 25%
  • Value-added tax (VAT): ranging from 7.5% to 15%

Advertising Regulations

The government has introduced regulations governing advertising for alcohol products, which must respect certain principles, including not targeting minors and not encouraging excessive consumption.

Key Requirements

  • Advertising for alcohol products: subject to specific regulations
  • Principles: respect of minors and encouragement of responsible consumption

Double Taxation Treaties

São Tomé and Principe has signed a double taxation agreement with Portugal, which aims to prevent tax duplication on income earned by individuals or companies. This agreement provides a favorable environment for foreign investors who may be subject to taxes in both countries.

Benefits

  • Prevention of tax duplication
  • Favorable environment for foreign investors

In conclusion, São Tomé and Principe offers a unique investment opportunity for foreign investors, with its business-friendly environment, competitive tax regime, and favorable investment laws. The country’s swift company incorporation procedure and tax benefits make it an attractive destination for entrepreneurs and investors looking to expand their operations into the region.