SÃO TOMÉ AND PRINCÍPE: BANKING REGULATIONS FOR COMPLIANCE
Improving the Investment Climate
The São Tomé and Príncipe government continues to work on improving its investment climate, making the country a more attractive destination for foreign direct investment (FDI). Despite challenges such as limited revenue sources, inadequate infrastructure, slow-moving justice system, high cost of credit, and limited access to electricity, the government remains committed to creating an open and transparent business environment.
Banking Sector Regulations
The banking sector in São Tomé and Príncipe is regulated by the Central Bank of São Tomé and Príncipe (BCSTP). The BCSTP is responsible for overseeing the financial system, ensuring the stability of banks, and protecting depositors. In 2020, the BCSTP introduced new regulations to strengthen risk management practices and improve capital adequacy requirements.
Anti-Money Laundering and Combating the Financing of Terrorism
São Tomé and Príncipe has been a member of the Financial Action Task Force (FATF) since 2013, demonstrating its commitment to combating money laundering and terrorist financing. The country has implemented regulations in line with international standards, including the adoption of an anti-money laundering law and the establishment of a financial intelligence unit.
Investment Regulations
The government of São Tomé and Príncipe has taken steps to improve the investment climate, including:
- Introduction of a modern Labor Code (2019)
- Adoption of the Value Added Tax Law (2019)
- Ratification of the African Continental Free Trade Agreement (AfCFTA) in 2019
FDI and Economic Growth
The government is focused on attracting FDI and promoting economic growth. In 2021, Prime Minister Jorge Bom Jesus emphasized the need to fight corruption, improve the business environment, attract FDI, and promote economic growth.
Opportunities and Challenges
Despite its small market size and limited infrastructure, São Tomé and Príncipe offers opportunities for investors in sectors such as:
- Tourism
- Technology
- Logistics
- Health services associated with the digital economy
However, foreign investors continue to face challenges identifying viable investment opportunities due to the country’s fragile domestic market, inadequate infrastructure, slow-moving justice system, high cost of credit, and limited access to electricity.
Conclusion
The government of São Tomé and Príncipe is committed to creating an open and transparent business environment, making the country a more attractive destination for FDI. While challenges persist, the government’s efforts to improve the investment climate, implement anti-money laundering regulations, and promote economic growth offer opportunities for investors.