Somaliland Employer of Record & Payroll Services

Africa Deployments Somaliland (ADS) offers Employer of Record (EOR) solutions in Somaliland, covering all regions within. We specialize in managing local and expatriate hires for both full-time employment and fixed-term contracts. ADS applies for work permits through a local company and issues local work contracts to your employees. We also provide guidance on the best Human Resource (HR) practices when setting up employees locally in Somaliland.

Our comprehensive solutions ensure that your employees in Somaliland are fully compliant with local tax and PAYE remittances to the Revenue Services on a monthly basis. We guarantee that salaries are paid on time, by the 25th of each month, along with pay slips. Additionally, we offer Medical, Disability, Life, and Workmen’s Compensation Insurance to employees in Somaliland.

Our Services Include:

• Africa Employer of Record
• Africa Remote Teams
• Africa Payroll Solutions
• Africa Treasury Management
• Africa Support Services (e.g., vehicle hire, accommodation, office rentals, etc.)

About Somaliland

Somaliland, officially the Republic of Somaliland, is an autonomous region in the Horn of Africa, bordered by Djibouti to the northwest, Ethiopia to the south and west, and Somalia to the east. With 850 km of coastline, Somaliland boasts pristine beaches, coral reefs, unique archaeological sites, rare birds and mammals, and impressive mountain ranges. The country enjoys a year-round sunny, warm climate.

• Population: 3.5 million (2021)
• Currency: Somaliland Shilling
• Capital: Hargeisa (home to ~1.2 million people)
• Languages: Arabic, English, and Somali
• GDP: $3,348 million (2021)
• Main Industries: Agriculture & Industry

Hargeisa, the capital, is a commercial hub for precious stone-cutting, construction, retail, and trading. It is also home to rock art from the Neolithic period and serves as a key center for business.

Official Languages

In Somaliland, there are three official languages: Somali, Arabic, and English. Most people speak at least two of these languages.

Types of Employment Contracts in Somaliland

Through our Employer of Record (EOR) solutions in Somaliland, we offer the following types of employment contracts:

• Fixed-Term
• Indefinite-Term

Contract Requirements:

• Must be in writing, in Somali, Arabic, or English, and in Somaliland Shillings.
• Salary/compensation, benefits, and termination terms must be clearly defined.

Full-Time Employees:

• Have specific working terms and conditions.
• Are eligible for organizational perks and benefits.
• Generally focused on a single employer and may receive ongoing company training.

Probationary Period:

• Up to 4 months maximum.
• Typically, 2 months probation with an additional extension of 2 months possible.
• During probation, either party can terminate the contract without notice or reason.

Taxation in Somaliland

Taxable Income:

• Employees do not pay tax on the first 5,000,000 SL Shs of annual income.
• Income above this threshold is taxed at 6% on the excess above the threshold.

Exempt Income:

• First 5,000,000 SL Shs of annual taxable income is exempt from taxes.

Working Hours and Overtime in Somaliland

• Standard working hours range from 40-48 hours per week.
• Overtime is typically 1.5x the regular wage for hours worked beyond the standard threshold, with some conditions for increased rates (2x after exceeding certain limits).

Contributions in Somaliland

Employee Contributions:

• Pension: 3.6%
• Health Insurance: 2.4%

Employer Contributions:

• Pension: 6.4%
• Work Injury: 1-4%
• Apprenticeship Tax: 0.2%
• Public Health Insurance: 4%

Leave Policies in Somaliland

• Maternity Leave: 4 months with breastfeeding breaks.
• Paternity Leave: No formal regulations.
• Medical Leave: Sick leave is capped at 6 months every 3 years with a certified health certificate.
• Annual Leave: 30 days paid leave per year (approx. 2.5 days per month).
• Family Responsibility Leave: 2-7 days depending on the situation.

Severance and Gratuity in Somaliland

• Notice Period: Based on service length and employment type, typically 6 weeks.
• Severance Pay: Employees are not entitled to severance for termination, regardless of the reason.

Corporate Tax and VAT/Sales Tax in Somaliland

• Corporate Tax Rate: 10%
• VAT/Sales Tax Rate: 5% on most goods and services

Public Holidays in Somaliland

• January 1: New Year’s Day
• February 18: Isra and Mi’raj
• May 1: Labour Day
• May 18-19: Sovereignty Day
• April 21-22: Eid al-Fitr
• June 26: Independence Day
• June 29-30: Eid al-Adha
• July 19: Hijri New Year
• September 27: Prophet Muhammad’s Birthday

Industries We Support in Somaliland

• Non-Governmental Organizations (NGOs) / Non-profits
• Engineering & Construction
• Government / Development Agencies
• Oil & Gas
• FMCG & Manufacturing
• Private Equity, Finance, Insurance & Banking
• Mining
• Agriculture

• Contact Us
  For detailed assistance with Employer of Record (EOR) services in Somaliland, including specific payroll and employment solutions tailored to your needs, contact our team at Africa Deployments.