Global Insight

Hire in Cape Verde

Captial
Praia
Languages
Portuguese, etc
Currency
Cape Verdean Escudo
Payroll Cycle
Monthly
Employer Contribution
14%
Population
0.58 mil.

Minimum Wage

As of January 1, 2024, the minimum wage in Cape Verde is set at 15,000 CVE per month. This represents an increase from the previous minimum wage of 13,000 CVE. The minimum wage applies across various sectors and is crucial for establishing a baseline standard of living for workers.

Minimum WageAmount (CVE)
Monthly Minimum Wage15,000
Overview of minimum wage in Cape Verde as of January 2024.

Income Tax

Cape Verde employs a progressive personal income tax system. Taxable income up to 220,000 CVE is exempt from tax. The following tax brackets apply to taxable income above this threshold:

  • 16.5% on income from 220,001 to 960,000 CVE
  • 30% on income exceeding 960,000 CVE

Employers are responsible for withholding the appropriate amount of income tax from employees’ salaries and remitting it to the tax authorities.

Income Tax RateIncome Bracket
0%Up to 220,000 CVE
16.5%220,001 to 960,000 CVE
30%Over 960,000 CVE
Overview of personal income tax rates in Cape Verde.

Payroll Cost

The payroll cost for employers in Cape Verde includes not only the employee’s salary but also mandatory contributions to social security and other funds. Employers contribute approximately 8% of an employee’s gross salary to the National Institute of Social Security (INPS), which covers pensions and health benefits.Additional contributions may include:

  • 1% for occupational accident insurance
  • Variable rates based on specific industry requirements
Payroll Cost ComponentDescription
INPS ContributionApproximately 8%
Occupational Accident Insurance1%
Overview of payroll cost components in Cape Verde.

Overtime Pay

In Cape Verde, the standard working week is typically 44 hours, and employees are entitled to additional compensation for overtime work. Overtime pay is calculated as follows:

  • 125% of the normal hourly rate for overtime worked beyond standard hours.
  • Employees can work up to an additional 12 hours of overtime per week.
Overtime Pay RegulationDescription
Regular Overtime Rate125% of normal hourly rate
Maximum Overtime HoursUp to 12 hours per week
Overview of overtime pay regulations in Cape Verde.

This comprehensive overview covers minimum wage requirements, income tax obligations, payroll costs, and overtime pay regulations in Cape Verde. Understanding these aspects is essential for employers navigating the employment landscape in this country.

Regular & Maximum Working Hours

In Cape Verde, the standard working week is set at 44 hours, typically spread over 5 or 6 days. Employees are expected to work a maximum of 8 hours per day if working five days a week or 7.33 hours per day if working six days. Any work performed beyond these hours is considered overtime and must be compensated accordingly.

Working HoursDescription
Standard Work Week44 hours
Standard Work Day8 hours (5 days) / 7.33 hours (6 days)
Maximum Work Week48 hours (including overtime)
Overview of working hours in Cape Verde.

Leave

Cape Verde provides various types of leave to support employee well-being and work-life balance. The main types of leave include:

  • Annual Leave: Employees are entitled to a minimum of 22 days of paid annual leave after one year of service. This leave can be taken in parts, but one part must consist of at least 12 consecutive days.
  • Sick Leave: Employees are entitled to up to 30 days of paid sick leave per year, requiring a medical certificate for verification.
  • Maternity Leave: Female employees are entitled to 60 days of paid maternity leave, with compensation at 80% of their regular wage.
  • Paternity Leave: Male employees can take up to 120 days of paternity leave under specific circumstances, such as when the mother is unable to care for the child.
Leave TypeDescription
Annual LeaveMinimum of 22 days paid leave
Sick LeaveUp to 30 days paid leave
Maternity Leave60 days paid leave at 80% of regular wage
Paternity LeaveUp to 120 days under specific conditions
Overview of leave entitlements in Cape Verde.

Holidays

Cape Verde observes several public holidays throughout the year. Employees are entitled to paid time off on these holidays, which include:

  • New Year’s Day: January 1
  • Democracy Day: January 13
  • Heroes’ Day: January 20
  • Good Friday: Date varies
  • Labor Day: May 1
  • Youth Day: June 1
  • Independence Day: July 5
  • Assumption of Mary: August 15
  • All Saints’ Day: November 1
  • Christmas Day: December 25
Public HolidayDate
New Year’s DayJanuary 1
Democracy DayJanuary 13
Heroes’ DayJanuary 20
Good FridayDate varies
Labor DayMay 1
Youth DayJune 1
Independence DayJuly 5
Assumption of MaryAugust 15
All Saints’ DayNovember 1
Christmas DayDecember 25
Overview of public holidays in Cape Verde.

This comprehensive overview covers regular and maximum working hours, various types of leave, and holiday observances in Cape Verde. Understanding these aspects is essential for employers looking to create a compliant and supportive work environment.

Termination Requirements

In Cape Verde, the termination of employment contracts is governed by the Labour Code, which outlines specific legal requirements to ensure fairness. Employment contracts can be terminated for various reasons, including:

  • Mutual Agreement: Both employer and employee agree to terminate the contract.
  • Redundancy: Termination due to economic reasons or organizational changes.
  • Misconduct: Dismissal for serious violations of company policies.
  • Incompetence: Termination based on performance issues.

Employers must follow due process when terminating an employee to avoid potential legal disputes.

Termination GroundsDescription
Mutual AgreementBoth parties consent to end the contract
RedundancyEconomic or organizational reasons
MisconductSerious violations of company policies
IncompetencePerformance-related issues
Overview of termination grounds in Cape Verde.

Notice Period

The notice period required for terminating an employment contract varies depending on the length of service and type of contract. Generally, the notice periods are as follows:

  • Indefinite-Term Contracts:
    • Less than 1 year: 30 days
    • 1 to 5 years: 60 days
    • More than 5 years: 90 days
  • Fixed-Term Contracts: Typically, a notice period of 10 days is required unless specified otherwise in the contract.
Contract TypeLength of ServiceNotice Period
Indefinite-TermLess than 1 year30 days
Indefinite-Term1 to 5 years60 days
Indefinite-TermMore than 5 years90 days
Fixed-TermAny duration10 days
Overview of notice periods in Cape Verde.

Severance Pay

Employees in Cape Verde are entitled to severance pay upon termination, except in cases of dismissal for serious misconduct. The amount of severance pay is calculated based on the length of service and is as follows:

  • Less than 1 year: No severance pay
  • 1 to 5 years: One month’s salary
  • 6 to 10 years: Two months’ salary
  • 11 to 15 years: Three months’ salary
  • More than 15 years: Four months’ salary
Length of ServiceSeverance Pay
Less than 1 yearNo severance pay
1 to 5 yearsOne month’s salary
6 to 10 yearsTwo months’ salary
11 to 15 yearsThree months’ salary
More than 15 yearsFour months’ salary
Overview of severance pay entitlements in Cape Verde.

Probation Periods

The probation period for employees in Cape Verde typically lasts up to 6 months. During this time, either party can terminate the contract with a shorter notice period. The probation period can be extended once, but only with mutual agreement.

  • For managerial positions, the probation period may extend up to 8 months.
Role TypeStandard Probation Period
General EmployeesUp to 6 months
Managerial RolesUp to 8 months
Overview of probation periods in Cape Verde.

This detailed overview covers termination requirements, notice periods, severance pay, and probation periods in Cape Verde. Understanding these aspects is essential for employers navigating the employment landscape in this country.

Misclassification of Workers

In Cape Verde, correctly classifying workers as either employees or independent contractors is crucial for compliance with labor laws. Misclassification can lead to significant legal and financial consequences, including penalties and back taxes. The distinction between employees and independent contractors primarily revolves around the level of control, benefits, and tax responsibilities.Key Differences:

  • Control: Independent contractors have more control over how they complete their work, while employees are subject to direct supervision.
  • Benefits: Employees are entitled to various benefits such as paid leave and social security contributions, whereas independent contractors are not entitled to these benefits.
  • Tax Responsibilities: Employees have taxes withheld by their employer, while independent contractors are responsible for their own tax filings.
Classification FactorEmployeeIndependent Contractor
Level of ControlHighLow
BenefitsEntitled to various benefitsNo entitlement to employee benefits
Tax ResponsibilitiesEmployer withholds taxesResponsible for own tax filings
Comparison of employee and independent contractor classifications in Cape Verde.

Legal Framework

The legal framework governing contractors in Cape Verde is primarily established by the Civil Code. Under this legislation, an individual is classified as a contractor if they meet certain criteria:

  • Determine their own work schedule and location.
  • Work without direction or supervision from the employer.
  • Supply and use their own tools, materials, and equipment.
  • Have the ability to perform work for other clients simultaneously.
  • Set their own pay rate.

Understanding these criteria is essential for both employers and contractors to avoid misclassification.

Legal AspectDescription
Work ScheduleContractor sets their own hours
SupervisionNo direct oversight from the employer
Tools and EquipmentContractor provides their own
Multiple ClientsAbility to work for various clients
Payment RateContractor determines their compensation
Key legal aspects defining independent contractors in Cape Verde.

Tax Responsibilities

Independent contractors in Cape Verde are considered self-employed for tax purposes. They must register with the tax authorities and are responsible for filing their own tax returns. Key tax responsibilities include:

  • Tax Registration: Contractors must obtain a taxpayer identification number (TIN).
  • Self-Assessment: Contractors are required to file annual tax returns based on their earnings.
  • Social Security Contributions: While not mandatory, it is advisable for contractors to contribute to social security for retirement and health benefits.
Tax ResponsibilityDescription
Self-AssessmentRequired to file annual tax returns
Tax RegistrationMust register with local tax authorities
Overview of tax responsibilities for independent contractors in Cape Verde.

Compliance Considerations

Ensuring compliance with local laws is crucial when hiring independent contractors. Misclassification can lead to penalties, including back payments for social security contributions. Factors considered when determining the nature of the working relationship include:

  • Degree of Control: The extent to which the employer controls how work is performed.
  • Provision of Tools: Whether the employer provides tools and equipment necessary for work.
  • Exclusivity: Whether the contractor works exclusively for one client or multiple clients.
Compliance FactorEmployeeIndependent Contractor
Control over WorkHighLow
Provision of ToolsYesNo
ExclusivityOften requiredNot required
Compliance factors distinguishing employees from independent contractors in Cape Verde.

This detailed overview covers misclassification issues, legal frameworks, tax responsibilities, and compliance considerations related to independent contractors in Cape Verde. Understanding these aspects is essential for employers looking to create a compliant working environment while minimizing legal risks.

Visa Requirements

When hiring foreign employees in Cape Verde, understanding the visa requirements is essential. Foreigners must obtain a work visa and, in some cases, a residence permit to work legally in the country. The process generally involves:

  • Work Visa Application: Employers must apply for a work visa on behalf of the employee. Required documents typically include:
    • A valid passport
    • A recent passport photo
    • A completed application form
    • An employment contract with a local company
    • Proof of residence
    • Payment of the visa fee
  • Residence Permit: After obtaining a work visa, foreign nationals may need to apply for a residence permit if they plan to stay long-term.
Visa RequirementDescription
Work VisaRequired for non-Cape Verdean citizens
Residence PermitNecessary for long-term stays
Application DocumentsPassport, photo, application form, contract
Overview of visa requirements for hiring in Cape Verde.

Local Work Culture

Understanding the local work culture is crucial for effective integration into the Cape Verdean workplace. Key cultural aspects include:

  • Communication Style: Cape Verdeans value direct communication but also appreciate politeness and respect in professional interactions. Building personal relationships is often essential.
  • Hierarchy: The workplace typically has a hierarchical structure where respect for authority is significant. Decisions may be made at higher levels, but input from team members is valued.
  • Work-Life Balance: Employees often prioritize a balance between work and personal life, so respecting personal time is important.
Cultural AspectDescription
Communication StyleDirect yet polite
HierarchyRespect for authority
Work-Life BalanceEmphasis on maintaining personal time
Overview of local work culture in Cape Verde.

Religion and Customs

Cape Verde has a diverse cultural heritage influenced by various religions, primarily Christianity and African traditions. Understanding these customs can enhance workplace harmony:

  • Religious Practices: Major religious holidays are widely observed, including Christmas and Easter. Employers should be mindful of these dates when planning work schedules.
  • Cultural Sensitivity: Dress codes may be influenced by local customs; modest attire is generally preferred in professional settings.
  • Community Engagement: Community events and celebrations are common and foster team bonding outside of work.
AspectDescription
Religious PracticesPredominantly Christian
Cultural SensitivityPreference for modest attire
Community EngagementFestivals that encourage team bonding
Overview of religion and customs in Cape Verde.

This detailed overview covers visa requirements, local work culture, and religious customs in Cape Verde. Understanding these aspects is essential for employers looking to create a positive working environment while effectively managing their workforce.

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