Somaliland Employer of Record & Payroll

Africa Deployments Somaliland offers our clients Employer of Record solutions in Somaliland covering all of the regions within. We offer full time employment or fixed terms contracts based on your requirements in Somaliland for local & expatriate hires. ADS will apply for the work permits through the local company and issue local work contracts to your employees. We will also advise our client’s on best Human Resource (HR) practices when setting up the employee’s locally in Somaliland. ADS will take care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law. We will also ensure that their salaries are paid on time monthly by the 25^th of each month and issue them with their pay slips. In addition to our services we can offer the employee in Somaliland, Medical, Disability, Life and Workmen’s Compensation Insurances. ADS offers the following services:

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

Somaliland, officially the Republic of Somaliland, is an autonomous region in the Horn of Africa. Somaliland has been a distinct region from Somalia since the late 1800s and is located on the southern coast of the Gulf of Aden – bordered by Djibouti to the northwest, Ethiopia to the south and west, and Somalia to the east. Somaliland has 850 kms of coastline with abundant pristine beaches, beautiful coral reefs, unique archaeological sites, rare birds and mammals, impressive mountain ranges, and a year-round sunny, warm climate. Home to ±18 million people overall, Somaliland is a strict Muslim territory. The capital and largest city is Hargeisa where ±1.2 million people reside. Home to rock art from the Neolithic period, the city is also a commercial hub for precious stone-cutting, construction, retail and trading. Livestock is an important mainstay in Somaliland’s economy. Somaliland cuisine is largely influenced by Indian and Arabic customs and staples include flatbread, rice, meat and bananas. Seafood is eaten mostly in the coastal regions.

Population

3.5 million (2021)

Currency

Somaliland Shilling

Capital

Hargeisa

Language

Arabic, English & Somali

GDP

3,348 million USD (2021)

Industries

Agriculture & Industry

What is the main language spoken in Somaliland:

In Somaliland, there are 3 official languages being Somali, Arabic, and English.

Most people in Somaliland speak at least two of the territory’s three official languages.

What type of employment contracts can you offer in Somaliland:

Through our employer of record (EOR) solutions in Somaliland, we can offer the following types of employment contracts:

Fixed Term
Indefinite term

Contracts and Offer Letters must:

Be in writing
Be in the official local language and the local currency
Include salary/compensation, benefits and termination requirements

Full-time Employees:

Have specific working terms and conditions
Can be eligible for organizational perks and/or other benefits
Tend to be more focused [as only one employer] and familiar with the specific business – due to e.g. ongoing company training etc.
Probationary period is up to 4 months [maximum] – generally in Somaliland the probationary contract is authorized for 2 months, with an additional extension of 2 months possible, at the employer’s discretion.
- During the probationary period either party may terminate the contract without notice and without reason.

WHAT INCOME IS TAXABLE IN Somaliland:

Employees do not pay tax on the first 5,000,000 SL shs of annual income. Any income above that amount is taxed monthly at a rate of 6% on the excess above the threshold.

What income is exempt from taxes in Somaliland:

The first 5,000,000 SL shs of annual taxable employment income (or 416,667 SL shs of monthly income) is exempt from taxes in Somaliland. This tax-free allowance applies to all employees.

Any taxable income from employment exceeding the annual threshold of 5,000,000 SL shs would be subject to the 6% tax rate on the amount above the threshold. But income below that level is exempt.

Standard working hours: Overtime to be paid in Somaliland?

The standard work week in many countries is 40-48 hours. Working beyond this is considered overtime.
Overtime pay is often 1.5x the regular hourly wage for hours worked over the standard threshold.
Sometimes overtime pay rates increase to 2x the regular wage after a certain number of hours.
Overtime pay may apply only after exceeding a daily or weekly threshold, not just for extra hours in a day.

Mandatory contributions in Somaliland?

Employee

Contribution Type	Contribution Rate
Pension	3.6%
Health insurance	2.4%

Employer

Contribution Type	Contribution Rate
Pension	6.4%
Work injury	1-4%
Apprenticeship tax	0.2%
Public health insurance	4%

Social

Contribution Type	Employers	Employees
Social security	6.4%	3.6%
Public health insurance	4%	2.4%

What is the Maternity and Paternity policy within Somaliland:

Maternal leave:

4 months maternity leave allowance
Breastfeeding breaks during working hours for breastfeeding parents

Paternal leave:

There are no formal regulations on paternity leave in place

What type of leave is allowed in Somaliland:

Medical Leave [employees]:

Sick leave cannot be more than six months every three years
Certified health certificate to be provided

Annual Leave [employees]:

30 days paid leave per year [± 2.5 days paid leave per month]
2-7 days of family responsibility leave

Do I need to pay a mandatory bonus annually OR is it discretionary in Somaliland:

There is no statutory requirement to pay a 13^th or 14^th month salary / bonus in Somaliland.

What Gratuity / Severance payments do you need to provide for Somaliland:

Before employing your employees in Somaliland, it is always advisable to understand your risk from an employment perspective. Unfortunately, nothing is guaranteed and in the event that you need to terminate for a valid reason, we always suggest that you know what you are in for in the unlikely event you need to terminate.

Below are the types are terminations in Somaliland:

Notice period:

Calculated based on length of service and employment type
Can be 6 weeks [standard]
Prior written notice required

Severance [economic reasons]:

The employee is entitled to no additional payment, such as severance pay, when the contract ends for any reason.

CAN YOU GIVE FRINGE BENEFITS IN Somaliland?

No, we don’t have any Fringe Benefits in Somaliland.

Mandatory Probation period of Somaliland:

Standard probationary hiring practices in Somaliland seem to follow a 3-6 month initial evaluation period prior to permanent employment. But specific terms would be according to company policy.

What are the Corporate and VAT / Sales tax rates in Somaliland:

Corporate Tax Rates: 10% [in general]

VAT / Sales Tax Rates: 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 - Sovereignty Day
May 19 - Sovereignty Day
April 21 - Eid al-Fitr
April 22 - Eid al-Fitr
June 26 - Independence Day
June 29 - Eid al-Adha
June 30 - Eid al-Adha
July 19 - Hijri New Year's Day
September 27 - Prophet Muhammad's Birthday

What Industries we support in Somaliland:

Non-Governmental Organization’s (NGO) / Non- profit
Engineering & Construction
Government / Development Agencies
Oil & Gas
FMCG & Manufacturing
Private Equality, Finance, Insurance & Banking
Mining
Agriculture

The information provided above is for an “informative decision” and may change at any given time without prior notice. We always suggest speaking to one of our Sales Consultants before engaging in any country.