San Marino is a beautiful locale entirely surrounded by northeastern Italy. This small, independent nation-state is only one-third of the size of Washington, D.C. While the country shares many similarities with Italy, including its national language and currency, San Marino is its own entity with a unique culture and history.
Expanding your business to San Marino means you must follow country-specific regulations and employment laws. If your company employs a global workforce, you have to comply with national and local standards in every country where you hire and operate. Failure to do so can have various consequences. Repeated infractions can even result in the suspension or loss of your business license.
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Globalization Partners can help you maintain compliance while setting up your company, hiring top talent, and operating on a global scale. As an Employer of Record, we accept liability for any mistakes or oversight and our services let you focus on expanding quickly.
Hiring in San Marino
Besides complying with San Marino labor laws, maintaining professionalism is incredibly important during business operations in any country. While hiring, negotiating, and doing business in-country, you should wear professional attire. Donning a suit or other appropriate clothing signals respect and professionalism wherever you are in the world.
Also, try to schedule meetings in advance. When you book interviews and other meetings early, you give your candidates and yourself time to prepare. Before an interview, you may want to ask the candidate’s potential supervisor to sit in. Plus, you may need to hire a translator. While the official language is Italian, local talent may speak Sammarinese — a variety of Romagnol.
Try to schedule meetings and interviews in the afternoon to avoid the period directly after the typical lunch break.
Employment Contracts in San Marino
If you’re hiring for permanent tasks, you cannot issue fixed-term employment contracts. A single, fixed-term contract is valid for 12 months, and you can only renew it once for six months.
You may hire an employee for a probationary period, but that term cannot last longer than 1.6 months.
The monthly minimum wage for a full-time employee varies by sector, the lowest monthly rate being 1,501.49 euros or approximately $1,785. The state’s low employment rate stems from the practice of hiring unemployed citizens to work in the public sector.
Working Hours in San Marino
No more than six, eight-hour days comprise the standard workweek, and work on the weekly rest day does not earn premium pay. In contrast, employees are entitled to 135 percent of their standard wages for night work and 126.3 percent of their standard wages for overtime.
You can ask your employees to complete work during the night — after their standard shift — or on their rest day without restrictions. However, the employee must consent to working hours that deviate from the schedule and expectations outlined in their employment contract.
Holidays in San Marino
Employees are entitled to their standard pay on the following holidays:
- New Year’s Day
- Liberation Day
- Anniversary of the Arengo
- Investiture of the Captains Regent (occurs twice per year)
- Easter Monday
- Labor Day
- Corpus Domini
- Anniversary of the Fall of Fascism and Freedom Day
- Assumption of the Virgin Day
- Foundation Day
- All Saints’ Day
- Commemoration of the Dead
- Immaculate Conception Day
- Christmas Eve
- Christmas Day
- St. Stephen’s Day
- New Year’s Eve
Vacation Days in San Marino
Regardless of tenure, all employees with more than one year of continuous service are entitled to 26 working days of annual leave.
Pregnant employees may take five months of maternity leave. They should begin their leave three months before the birth and remain on leave for two months after. It is illegal for a pregnant woman to perform work during the 60 days before her due date. The employee is also entitled to her full salary during prenatal and postnatal leave. Once returning to work, the employee may not perform night work until the child is 7 months old.
Health Insurance in San Marino
Any resident who makes contributions to social security is eligible for free health care. As an employer, you withhold your workers’ contributions and make payments on your own.
The ISS also assists ill, disabled, or retired residents and their families. Residents receive individualized services through public health facilities and other institutions, and the quality of care and economic benefits is unmatched.
While they are not compulsory, built-out benefits packages and substantial bonuses are valuable tools for attracting top talent. Plus, many residents use private insurance for fast, top-tier medical care.
Termination/Severance in San Marino
The only compulsory notice periods are any terms outlined in each employee’s contract. If you choose to end an employment relationship before a fixed-term contract expires or forego the notice period detailed in a permanent contract, you may have to pay severance. Usually, severance includes all wages the employee would have earned during the notice period, bonuses, and any other payments outlined in the employment contract.
If you terminate an employee with cause, such as theft, breach of contract, harassment, or other misconduct, you do not have to pay severance. You can also dismiss workers employed with redundancy without providing a notice period or paying severance wages.
Paying Taxes in San Marino
San Marino has double tax treaties (DTTs) with 22 other countries to prevent international employers and employees from paying excessive taxes. This protection makes the republic a friendly destination for companies that want to invest or expand and send local experts to work in-country.
As an employer, you must pay the following taxes:
- Corporate income tax: This is 8.5 percent of your company’s taxable profits for your first five years. After five years, you must pay a 17 percent income tax.
- Profit tax: Profit tax is five percent of profits.
- Tax on interest: You must pay 11 percent of income from interest on bank deposits.
- Capital gains tax: This tax is 8.5 percent of capital gains.
- Circulation tax: Circulation tax is 50 euros per company-owned vehicle.
- Environmental tax: Your company must pay 18 euros as environmental tax.
- Fuel tax: This is a 22 percent fee included in fuel prices.
You also need to contribute funds totaling 27.4 percent of your employees’ wages to social security. You must withhold 8.3 percent of each worker’s salary for their contributions to the Institute for Social Security (ISS).
Why Globalization Partners
At Globalization Partners, we ensure full compliance while recruiting, hiring, and doing business. Our global PEO services take the administrative and legal burdens off your company. Our services include:
- Generating employment contracts.
- Managing payroll.
- Building benefits packages.
- Ensuring international employees have the right documentation.
As an Employer of Record, Globalization Partners can simplify your company’s international expansion. Contact our team to learn more about how we can help your global workforce comply with international employment laws.