16th April 2018
It is perhaps fair to say that many agencies involved in international contractor placement will automatically consider glamorous destinations such as Switzerland or Dubai. However, when it comes to investment, Africa has a lot that recruiters can benefit from.
To begin with, the sheer size of the continent means there’s often a plethora of opportunities to tap into. And when it comes to persuading contractors to make a move to an African destination, there’s a lot to use as a selling point. It truly is a location that everyone should visit in some form at least once in their lifetime. With the opportunity to experience a range of things from deserts to rainforests and savannahs, there’s a lot to see culturally. In most of the Anglophone and Francophone countries there’s also the added benefit of a relatively low cost of living.
The continental economy is also booming. For example, South Africa alone has reported a rise in business confidence of 11 points for Q1 of this year. This positivity is being particularly noted in the technology, renewable energy and FinTech fields. However, with STEM skills in short supply, many businesses are seeking specialists from within these markets to aid company growth.
Know your stuff
It is clear that opportunities for agencies to profit in the African continent are rife, but it is vital that recruiters know their stuff when it comes to variations across countries. Requirements of contract professionals and expectations of working and living conditions will differ from place to place. For example, in Ethiopia, the local government has been known to shut down internet access, phones or even news reports for days at a time, making day-to-day activity tricky. In comparison, operating in Tunisia is much more straightforward, with the country ranked 74 out of 189 economies by the World Bank for ease of doing business.
Being aware of these nuances is crucial if recruiters are to assist contractors with a smooth transition and ensure that a placement is successful.
Placing contractors in Africa: the legalities
There are also several key legalities that agencies will need to consider when placing contractors in Africa. While, understandably, there will be variances across countries, there are a few general points to be aware of.
In the first instance, there are a number of work permit options available. In South Africa, for example, the choices are:
- A 90-day permit – for shorter projects
- A critical skills permit – this will depend on which skills the desired country is in need of and is subject to change
- A general work permit – for those seeking employment in non-critical sectors
- Intercompany transfer – where an individual is moving across countries but remaining with the same company.
Obtaining these permits can be demanding, with requirements varying across each option. It is vital that recruiters factor any possible challenges into planned timescales when making a placement in order to fully manage expectations.
Tax requirements will also vary from country-to-country but, in general, they are fairly similar to those in the UK, with contractors operating through an employment solution required to pay PAYE tax. Recruiters need to be aware, however, that tax brackets vary significantly across the continent, usually ranging from 18% – 40%. There is also the issue in some countries of a form of withholding tax, which you’ll need to be aware of.
Of course, the easiest, and crucially, safest, way to manage the legalities of placing contractors in Africa is to partner with an expert.
Contact our specialist team today to find out how we can help your agency.