Hire Contractors in Angola

Angola is a resource-rich Southern African nation. Nearly 65% of the workforce is self-employed, which accounts for a high percentage of the labor market. Self-employed individuals include contingent contractors in Angola, such as freelancers and independent contractors with registered proprietorships. 

The dominance of self-employment highlights the importance of considering the domestic labor market conditions in contractor outsourcing in Angola. When contracting a workforce mostly outside the formal sector, you must consider the regulatory framework and the implications.

This article will discuss various challenges and best practices for hiring contractors in Angola. We will also explore how innovative Agent of Record (AOR) solutions can simplify contractor management in Angola.

How to Hire Contractors in Angola

Contractor outsourcing in Angola requires meticulous adherence to labor law to avoid misclassification and penalties. The following step-by-step guide can help:

1. Familiarize yourself with local laws

• Angola's labor law for fixed-term contracts, payrolls, and benefits is stringent.
• Misclassifying a contractor as an employee can lead to tax, social security, and benefit back payments.
• Avoid making your contractor dependent by not having direct control over the work schedule, equipment, or supervision.

2. Draft a clear independent contractor agreement

• Specify project scope, deliverables, and payment in writing.
• Ensure the contract has no employment benefits or rights like sick pay or redundancy payments.
• Include tax responsibility (contractor tax Angola) to state that the contractor is responsible for their tax payment.

3. Choose the right hiring process

• You can hire a contractor directly but must comply with Angola's labor law.
• Through an Agent of Record (AOR), you can automate compliance, payroll, and tax obligation management, reducing risks.

Hiring contractors through Skuad AOR

Skuad provides an Agent of Record (AOR) service, enabling businesses to hire contractors in Angola while remaining tax and law-compliant. Here's how it works:

• Skuad keeps all contracts compliant with Angola's labor laws.
• We pay, deduct taxes, and report, minimizing administrative efforts.
• Our legal practice maintains the independent status of contractors, reducing misclassification risks.

Moreover, an AOR allows you to hire and pay contractors efficiently without establishing a local entity in Angola.

How to find contractors in Angola

Hiring independent contractors in Angola may begin with: 

• Using Online Job Platforms:  Jobartis, Emprego.co.ao, LinkedIn, Upwork, and Toptal help connect with skilled contractors.
• Leveraging Local Networks & Agencies:  Angola’s Chamber of Commerce, staffing agencies, and professional associations can help source contractors.
• Attending Business & Industry Events:  FILDA, oil & gas conferences, and tech meetups are great places to find industry-specific contractors.
• Partnering with an Agent of Record (AOR) Like Skuad:  An AOR helps with sourcing, compliance, contracts, and payments, reducing hiring risks.

How to pay contractors in Angola

Payment of Angola contractors involves the following currency regulations, taxes, and cross-border payment channels:

• The local currency is the Angolan Kwanza (AOA), although most contractors prefer USD or EUR.
• Cross-border payments may be limited, so a compliant payment processor may be necessary.
• You can use payment methods such as: 
  
  • Bank Transfers: Confirm if the contractor's bank supports international payments.
  • Digital Payment Platforms: Payoneer can be utilized to make quicker global payments.‍
  • Through an Agent of Record Angola: They facilitate payments on your behalf, ensuring compliance.

Hiring Contractors Directly vs Hiring Contractors via Skuad

Here’s a quick differentiation summary of hiring contractors directly vs hiring contractors via Skuad:

Cost of Hiring Contractors in Angola

The cost of hiring in Angola varies by industry, level of experience, and type of project. Here’s a quick summary: 

• Contractor Salary Angola (Hourly)
  
  • IT & Software Development: $20–$50/hour
  • Oil & Gas Consultants: $50–$150/hour
  • ​​Construction & Engineering: $30–$100/hour
  • Marketing & Design: $15–$40/hour
  • General Freelancers: $10–$25/hour
• Taxes: If this applies to contractors, you must pay 14% on every contractor invoice.
• Payment & currency considerations: Varies‍
• Hidden costs: Includes contract drafting & legal fees, work permit fees, and misclassification risks.

How to Convert a Contractor into an Employee in Angola

The maximum length of fixed-term contracts in Angola is 36 months, beyond which you must convert your contractors into an employee to stay HR compliant. To begin with: 

• Determine if the contractor's control, work dependency, and role require full-time employment to prevent misclassification risks.
• Facilitate the transition easily by legally terminating the contractor's agreement using the proper documentation.
• Include job details, salary, benefits, working hours, social security contributions (8% employer, 3% employee), and termination conditions, as Angola's labor legislation requires.
• Enroll them in the National Social Security Institute (INSS) and ensure tax compliance.
• Offer paid annual, sick, maternity/paternity leave, and workplace protections.
• Set up salary payments and tax withholding, and adhere to Angola's General Labor Law (LGT).

Alternatively, you can switch to Employer of Record (EOR) solutions to automate and simplify this process.

Challenges of Hiring Contractors in Angola

Hiring contractors in Angola is linked with different legal and operational challenges. Here are the most significant challenges you might face:

1) Strict employment contract legislation

• You must place fixed-term contracts in writing, and they must meet Angola's new General Labor Law (Lei Geral do Trabalho – new LGT).
• Every fixed-term contract must have a sound temporary legal basis, making it harder to justify short-term appointments.
• The time for fixed-term contracts has been reduced, so you may have to bring Angola contractors onto permanent posts sooner than expected.

2) Risk of misclassification & legal conflicts

• Regular audits and inspections by Angolan labor authorities are carried out, so precise classification of contractors in Angola is imperative.
• You must carefully manage independent contractors in Angola under conditions akin to being an employee—such as fixed schedules, direct supervision, or exclusivity—who may plead employee status. 
• In this case, misclassification can result in back payments of social security, severance, and benefits, significantly raising labor costs.
• Moreover, Angolan labor courts favor employees, and legal controversies are costly and time-consuming.

3) Angola payroll & tax compliance issues

• You must withhold and pay taxes appropriately for employees, but contractors in Angola pay their taxes. Nevertheless, authorities can challenge classification if a contractor works like an employee.
• Social security contributions (INSS) are mandatory for employees, and failing to pay for misclassified contractors may result in fines.

4) Hiring issues

• New disciplinary measures under the new LGT, such as temporary demotion and suspension without pay, influence how you manage staff in the event of controversy. 
  ‍
  Suppose you impose such actions on a contractor in Angola (say, reducing their role or temporarily stopping payments). In that case, they may claim employee status, leading to misclassification risks and potential legal challenges.

• Under the new LGT, remote work is legally regulated, and special agreements must be executed to comply. Thus, contractors in Angola must exercise caution when hiring.

Modern businesses rely on specialized HR solutions in Angola. You may consider leading an Agent of Record Angola like Skuad for compliant contractor management.

Hire Contractors in Angola with Skuad

Contractor management in Angola can be complicated by rigorous labor laws, misclassification exposure, and compliance obligations. But with Skuad, you can hire, pay, and manage independent contractors without ever having to establish a local entity.

Skuad's AOR solution ensures all contracts, payroll, and tax compliance are in line with Angola's General Labor Law (LGT) while safeguarding your business and your contractors. With a presence in 160+ countries, Skuad’s EOR enables you to grow your team worldwide, make payments in several currencies, and manage compliance seamlessly.

Book a demo and grow your business in Angola with Skuad—quick, compliant, hassle-free contractor management software and AOR/EOR solutions!

FAQs

Can I hire a foreign independent contractor?

Yes, you can hire a foreign independent contractor in Angola. However, remote work is now regulated in the country, and company HR policies must reflect the company's commitment to fair practices. 

How much should I pay an independent contractor?

The cost of hiring in Angola varies by industry, level of experience, and type of project. You can pay independent contractors over and above the basic monthly minimum wage of about 38.888 USD. 

What are the maximum working hours in Angola?

Angola labor laws prescribe a maximum of 44 working hours per week or eight hours daily.  

Is it cheaper for a company to hire a contractor?

Hiring contractors for a specialized project is cost-effective in the short term. You are free from fulfilling any statutory employer obligations in the meantime.