Mozambique is a beautiful country in Southeastern Africa on the Indian Ocean and across from Madagascar. With a population of more than 25 million and ties to different ports and other African countries, Mozambique is a great place to plan an expansion. However, you also need to prepare for the more complicated aspects, including setting up your Mozambique payroll, deciding which payroll option is best for you, and more. Fortunately, Globalization Partners can help by providing our Mozambique payroll outsourcing services, which will make you more productive sooner.
Taxation Rules in Mozambique
Both employers and employees need to contribute to a variety of tax funds in Mozambique. For example, employers contribute 4% of wages to social security, while employees give 3%. The country utilizes a progressive income tax scale for employees, where the tax rate increases as employees earn more. Corporations are also subject to a corporate income tax of 32%.
Mozambique Payroll Options for Companies
Companies have more than one Mozambique payroll option. You can choose:
- Remote payroll: If you already have a robust payroll for your parent company, you could add the employees at your subsidiary to that same payroll. However, the two sets of employees will fall under separate regulations.
- Internal payroll: Companies that would rather run their own payroll out of their Mozambique subsidiary can, as long as they have the budget to hire additional HR staff and the knowledge to stay compliant.
- Mozambique payroll processing company: You can also work with a Mozambique payroll processing company that will outsource your payroll. Your company will still be held responsible for all payroll compliance.
- Mozambique payroll outsourcing: Another Mozambique payroll outsourcing solution is choosing Globalization Partners. We can handle outsourcing your payroll and shouldering the compliance.
How to Set Up a Payroll in Mozambique
Before you can set up your Mozambique payroll, you have to incorporate in the country. The steps to set up a subsidiary are different for almost every corporation depending on what type of entity they choose and where they decide to incorporate. Since it can take weeks or months before you can legally operate in the country, it can pay off to use a global PEO such as Globalization Partners.
We can use our existing subsidiaries in Mozambique to help you start working faster. You won’t have to wait to incorporate before you set up your Mozambique payroll when you work with us. Our Mozambique payroll outsourcing services will ensure that your payroll is compliant, and you can start working in a few days instead of a few months.
Since termination and entitlement terms are often tricky in foreign countries, we recommend including entitlement and termination terms in your employment contracts before choosing a Mozambique payroll option. Your employees are generally entitled to at least 30 days’ notice, and employees hired under indefinite term contracts usually receive severance pay based on their wages.
Payroll Processing Company in Mozambique
If you’re ready to expand to Mozambique, we can help make the process easier. Contact us today to learn more about our Mozambique payroll outsourcing service.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.