Umbrella Company in Democratic Republic of the Congo
Independent contracting in DRC isn’t always straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in DRC, you should be aware of what you’re getting into – and how you can make it simpler
Difficulties of Contracting in Democratic Republic of the Congo
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for DRC.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in DRC, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in DRC and your home country can seem like full-time work in itself.
How Umbrella Companies Work
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in DRC. Even better, most are experts in DRC and expat tax law, meaning they’ll also help you optimise your earnings in DRC.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Why Use an Umbrella Company in Democratic Republic of the Congo
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in DRC (which means avoiding fees, fines, or even worse penalties).
How We Can Help You
There’s a huge variety of Umbrella Companies with different specialities and advantages in DRC. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout DRC and match contractors with the right company for them. If you’ve already secured a contract in DRC, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
A Contractor’s Guide to Taxes in Democratic Republic of the Congo
One of the most consistently challenging aspects of contracting in DRC is complying with the country’s tax system. As well as paying tax in DRC, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Democratic Republic of the Congo
If you’re working in DRC under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in DRC for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in DRC, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in DRC through PAYE is left with the prospect of doing everything themselves.
Do you know much about DRC Tax Law? Does DRC have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in DRC can range from 0 to 40 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing in Democratic Republic of the Congo
|When Do You Need to Lodge Your Tax Return?||The tax year is the calendar year. Employees cannot file tax returns.|
|Tax Filing Deadline||No filing is required.|
|Can you file it online?||No|
How to File Taxes in Democratic Republic of the Congo
In the DRC, all personal tax is settled through the PAYE system. Employers must remit payroll tax before the 15th day of the month following the month of payment of the salaries. Any balance of tax payable is due by 10 January by the employer in the following calendar year.
Tax Figures in Democratic Republic of the Congo
|Currency||Congolese Franc (CDF)|
|Tax-free Threshold in Democratic Republic of the Congo||CDF 524,160|
|Income Tax Rates|
|Notes||Payroll tax is imposed at progressive tax rates ranging from 0% to 40%. However, the total amount of payroll tax cannot be higher than 30% of taxable revenue.|
The amount of tax is reduced by an amount of 2% per dependent (limited to nine dependents).
Tax Residency in Democratic Republic of the Congo
When do you become a tax resident in Democratic Republic of the Congo
You become a resident in DRC if any of the following exist:
- Regardless of your nationality, you have established in the DRC a real home, effectively and continuously.
- You have your domicile, family, main activity, business headquarters or business in the DRC.
- DRC is the usual place from where your assets and wealth are principally managed
Does the 183 day rule apply in Democratic Republic of the Congo
Am I taxed on my global income in Democratic Republic of the Congo
Income taxes are imposed only on DRC source income.
Can you set up your own Limited Company in Democratic Republic of the Congo
|How long does it take to set up||4 days|
|How much does it cost||USD 120 or CDF 195,120|
|Is it easy?||Starting a Business Rank: 62 (World Bank 2018)|
Tax Calculator in Democratic Republic of the Congo
If you are a contractor and want a calculation on your tax and net retention in DRC, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Democratic Republic of the Congo
Contractors in DRC are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A DRC umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).
The companies are experts in DRC taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the DRC tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Democratic Republic of the Congo
We work with numerous umbrella companies in DRC, many of whom are experts in tax and immigration laws. If you have any questions about tax in DRC, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their DRC work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in DRC but without the overhead of directly dealing with the DRC tax authorities. Get in touch with us today for some reliable advice on tax in DRC!
A Contractor’s Guide to Work Permits in Democratic Republic of the Congo
Immigration is one of the primary concerns for any contractor hoping to start working in DRC. Permanent employees will find it easy to get their DRC work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The DRC work permit is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in DRC is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.
How Can Umbrella Companies Help You Get a Work Permit in Democratic Republic of the Congo ?
As your permanent employer, umbrella companies are able to sponsor you for your work permit provided they’re on the register of approved sponsors. Many different companies offer this service, because it makes contracting in DRC infinitely simpler and saves you the hassle of continuous paperwork. Instead of changing your work permit every time you get a new contract, you can just work how you ordinarily would under the same permit. They protect you from the bureaucratic “rain” of legal compliance with the DRC immigration authorities. They can even deal with the DRC Embassy directly.
Through their service you may be able to use a business visa to get started quickly and then transition to a work visa in DRC. It depends on your specific visa requirements. Be aware you may have to register for a residence permit in DRC.
- Shell International Trading & Shipping / Global DBA Operations Lead
Great advice and excellent service on contracting and immigration solutions in the UK. I would highly recommend Tim and the team to assist you with accurate, clear and concise contracting advice in the UK or any other country for that matter.
- Charles River Development / Vice-President, Finance
I utilized PEO services with Contractor Taxation & have found the services invaluable. We had to quickly establish a presence in China to meet a perceived large market, knowing how difficult it could be setting up a complete operation there. CT helped us immensely to navigate these waters and establish this beachhead without a lot of the normal distractions associated w/opening a full operation. This allowed us to focus on our client’s expectations and keep us moving forward in the market.