Company registration is the process of formalizing the status of a legal entity in accordance with the laws of a certain country. During this process, the company is officially recognized as a legal entity with its own legal capacity.
To receive this status, it is necessary to provide certain documentation and fulfill the requirements established by the state authorities. Due to registration, the entity is able to conduct commercial activities, conclude contracts, participate in court proceedings and perform other legally significant actions.
What are the main advantages of incorporating a company (business) in Sao Tome and Principe?
- Political Stability and a Peaceful Environment
Sao Tome and Principe is one of the most stable and secure countries in Central Africa, offering an investor-friendly atmosphere. Low levels of social tension and a peaceful domestic political climate create ideal conditions for doing business with confidence.
- Strategic Location for Access to African and International Markets
Situated in the Gulf of Guinea, the archipelago is close to major markets such as Nigeria, Angola, and Cameroon, making it a convenient hub for regional expansion. Its membership in international and regional organizations ensures favorable access to African and European markets, especially through partnerships with the EU and African Union countries.
- Investor Incentives and Tax Benefits
The government offers attractive tax incentives, including corporate income tax exemptions during the initial years of operation, as well as duty-free imports for specific industries. In addition, policies have been introduced to support small and medium-sized enterprises and the development of free trade zones—making it easier and more profitable to launch a business.
- Financial Stability Through Euro Peg
The national currency is pegged to the euro, providing relative exchange rate stability and reducing currency fluctuation risks. This is a significant advantage for foreign investors pursuing long-term ventures, particularly in finance, export, or technology sectors.
- Opportunities for Niche Sectors and Long-Term Strategies
Sao Tome and Principe offer abundant natural resources, strong tourism potential, and promising prospects in eco-friendly agriculture, renewable energy, and fisheries. While the market is small, it is well-suited for niche projects that benefit from a stable environment and a gradual, sustainable growth approach.
How to register a company in Sao Tome and Principe and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Company registration
- Verificate and reserve of the company name;
- Register the Company with the Commercial Registry;
- Obtain Taxpayer Identification Number (TIN);
- Obtain the Certificate of incorporation from the Registrar of Companies, Memorandum and Articles of Association;
- Open a corporate bank account.
Requirements for registering a company in Sao Tome and Principe on the example of a Limited Liability Company (LLC):
- Shareholders: the company is required to have at least 1 shareholder.
- Director: at least one director must be appointed.
- Company secretary: there is no mandatory requirement for a company secretary, but appointing one can facilitate compliance and administrative tasks.
- Minimum share capital: there is no minimum capital requirement.
- Legal address: a registered office in São Tomé and Príncipe is mandatory.
- Registered agent: not required.
- Liability: the liability of its shareholders is limited to their shareholding in the company.
- Accounting: companies are required to maintain proper accounting records, prepare annual financial statements, and comply with tax and regulatory filing obligations.
What do you have to know about taxes when registering a company in Sao Tome and Principe:
Corporate income tax (CIT):
The Corporate Income Tax Rate is 25% of taxable profits. However, certain small businesses may qualify for lower rates. Taxpayers generally file and pay CIT annually. Your specific deadlines and the option for installments may depend on the size and nature of your business.
Exemptions and Incentives:
- Tax Holidays: Companies in priority sectors such as tourism, agriculture, and fisheries may qualify for tax holidays of up to five years.
- Investment Incentives: The government offers tax incentives for foreign direct investment (FDI) in infrastructure, renewable energy, and other key sectors, including reduced CIT rates and customs duty exemptions.
25% above SCR 1 million (~€70,000).
Personal income tax (PIT):
All individuals earning income in Sao Tome and Principe are subject to PIT. The country uses a progressive income tax system.
PIT is calculated on taxable income, which is determined after deducting allowable personal exemptions and other deductions:
- Up to STN 50,000: 0%
- STN 50,001 to STN 100,000: 10%
- Above STN 100,000: 20%
Value-added tax (VAT):
The standard VAT rate in Sao Tome and Principe is 15%, which applies to most services. However, a reduced rate of 7.5% is applicable to certain basic necessities such as specific food items.
Exemptions: Certain goods and services are exempt from VAT, including basic food items, healthcare services, educational services, and some financial services. Exports are zero-rated, allowing businesses to reclaim VAT on inputs used to produce exported goods.
For readers
Manimama provides assistance in choosing the right jurisdiction for company incorporation and in registering a business specifically in Sao Tome and Principe. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Sao Tome and Principe, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Sao Tome and Principe and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.
