Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Cape Verde can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Cape Verde, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Cape Verde.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Cape Verde is not the same as paying workers in your own country. Employees have to be paid using Cape Verde’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
The standard working hours in Cape Verde is 44 hours.
In Burkina Faso, employees are allowed overtime work of up to two hours a day. Overtime is provided only at the cost of not hiring new employees or if there’s urgent work.
The standard overtime limit is 160 hours per annum, but if employees agree, it can be extended up to 300 hours.
The annual limit is increased to 300 if there is written consent from the employee.
In Cape Verde, employees are typically paid on a monthly basis.
Employers in Cape Verde bonuses are not required but are a common.
Fixed-term contract employees are eligible for annual leave, which is proportional to the length of service once the period contracted is halfway complete.
Employees receive 22 days of paid annual leave.
This leave must be taken in the year it was given unless there was a specific agreement between the employee and employer regarding transferring unused annual leave.
There are 9 public holidays.
Employees in Cape Verde must have made at least four months of contributions, including 30 days in the three months before leave.
Employees receive up to 1,095 days of paid sick leave.
The first three days are paid at 100% by the employers. Starting on the fourth day, pay is provided to eligible employees through Cape Verde’s social security program.
Employees are eligible for maternity benefits through social security if they have made at least four months of contributions, including 30 days in the three months before leave.
Female employees in Cape Verde are entitled to 60 days of paid maternity leave. If the employee is not eligible for social security benefits, the employer pays the employee’s entire amount.
A male employee is entitled to paternity leave only if, within 120 days of the birth, the mother is unable to take care of the child due to physical or mental incapacity or the mother dies.
A minimum of 30 days’ leave is provided to the father if the mother dies.
There are no statutory provisions for parental leave.
The termination of employment in Cape Verde is different for each case. an employer has the right to terminate the employee’s contract due to acts of misconduct, such as:
In case of termination due to misconduct, the employer must send 40 days of notice before terminating the employee.
The employee has five days to respond to the notice.
The reason for termination must be provided if the employer still wants to terminate the employee.
Employees must provide notice to employers prior to terminating an employment contract. The notice period is 15 days, increasing by an additional 15 days per year of service up to two months.
The expiry of a fixed-term contract, severance pay is not provided.
Employees are entitled to receive severance pay (pay in lieu of notice) if the notice is late.
The probation period is 6 months.