International contractors may overlook Africa as a spot to look for new clients. But the vast continent does offer many opportunities as infrastructure and development projects are on the increase. The first step is to determine which countries to work in Africa will suit you the best, in terms of pay rates, available positions and taxation.
You will also want to consider the culture, climate and security status of a given country, ensuring the best chance of a stable and long-term stay.
How do you decide on the best countries to work in Africa for you?
You will want to have some method of evaluating a country based on multiple factors. Here are some suggested criteria to pick the best countries to work in Africa for you.:
Industries/ Demand for contractors
Specific industries related to your skills, and overall accepted use of contractors.
This is an important research point as you don’t want to be looking for IT positions where mining engineers are in the highest demand.
Ease of obtaining work permits, criteria and duration.
It takes longer to obtain work permits in Africa than in other regions, so there is a need to plan and explore your options as a contractor vs. an employee.
The overall health of the economy and demand for skilled workers.
Most African countries are considered ‘undeveloped’ by international standards, but this should not deter you if your skills are in demand.
Rates of pay
Estimated range of pay rates for your profession and industry.
Income tax and earnings retention
Tax rates and social contributions will affect earnings retention.
Many African countries will impose VAT once your earnings have reached a certain threshold, and social contributions will vary widely.
Quality of life
The cultural, political and community environment for ex-pats.
The experience of working as an ex-pat does depend on country factors and risks beyond your control, so it bears researching.
Cost of living
Cost of rent, food, transportation, healthcare and entertainment. The living costs will directly affect retained earnings and should be reflected in your pay rates.
Familiarity or appeal of the culture, and any language barriers in daily life.
Culture shock can be a real issue so consider your ability to adapt to a country that is quite different from your own.
Ease of contracting/self-employment and clarity of regulations.
Some countries will be fairly strict with compliance for contractors, so you should be prepared to show that you are an independent business. You must register as a sole proprietor in most African countries to confirm your contractor status.
Geopolitical risk, personal safety and available security resources.
Not every country has the same security profile. For example, Libya has the highest rates of pay in Africa but also brings significant security risks.
Examples of Specific Countries
Contractors should know that Egypt has many new infrastructure development projects with foreign investment. This will bring demand for a range of occupations and skill sets. This adds to its appeal as a cultural destination and a bridge between Africa and the Middle East.
Work permits take about two months for approval, and you cannot be inside Egypt during that time. One unique requirement is the need for an ‘experience certificate’ from an Egyptian consulate that documents your work history.
There are many private sector and government positions available in Ghana, known as Africa’s most peaceful country. Roles include teachers, construction workers and project managers. It does take a while to set up your visa with an average of 3-6 months for work and residence permit approval. You will also need to register as a sole proprietor and obtain a tax ID number for the business.
Morocco is attractive for many reasons to contractors, including its proximity to Europe for EU citizens. There is a demand for skilled labour for expansion plans, and most will be drawn to the vibrant culture of Casablanca. The primary industries are maritime and export, with several multinational companies in place. While English is spoken, French is the primary language.
South Africa is the continent’s largest economy and there are opportunities in manufacturing, IT and engineering. Cape Town is known as the best city in all of Africa. South Africa’s popularity has led the government to tighten immigration rules and abuse the 90-day work permit. The most applicable work visa is the ‘critical skills’ permit, which takes about 3 months for approval. The only viable option is to become an employee of your client, or use an umbrella company.
On the positive side, the tax residency rules are lenient and most ex-pats won’t become residents unless they stay five or more years. Income taxes range from 18-40%, but social security is only a 1% contribution to unemployment insurance.
Namibia is located in the south and offers opportunities in mining, energy and manufacturing which are the country’s primary sources of wealth. English is the official language which can be a help for native speakers. There is no tax residency imposed on ex-pats, so that is one less concern you will have. VAT is imposed on your turnover above a certain amount, so you will want to factor that into your pay rates.
You will have to register as a sole proprietorship also known as a ‘Defensive Name’, meaning that you are the same as your business.
How can Contractor Taxation help you with international contracting?
Contractor Taxation has a network of umbrella companies across Africa that are ready to help you with client payments, tax withholding and compliance. Because each country is different, the local umbrella company will know exactly how to assist you with your contracts and availing of various tax and self-employment programs.
Other benefits of umbrella companies include:
- Manages all client payments, tax withholding and any social contributions
- Issues you a payslip each month, to a local or foreign account
- Sponsors work permits
- Helps set up the contract with the client
- Moderates any disputes with your client
- Advises on access to totalization and double taxation treaties
If you have questions about how an umbrella company can help you as an international contractor, please contact us at Contractor Taxation.