How to Hire Remote Employees In 


The Basics

Mozambican Metical (MZN)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

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.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 


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 Mozambique can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Mozambique, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

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 Mozambique.

Use an Employer-of-Record (EOR)

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:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

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 Remote Employees

Paying employees in Mozambique is not the same as paying workers in your own country. Employees have to be paid using Mozambique'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:

Pay through a local entity

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.

Work with an EOR

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.


 Specific Information

Working Hours

The standard workweek in Mozambique is 40 hours a week and eight hour a day.


Overtime  in Mozambique of up to 200 hours per year is permitted, with compensation.

Payroll Tax



  • Gross monthly remuneration

Minimum Wage

Mozambique's minimum wage rate is 4390.00 MZN/Month.


Pay Cycle

The typical payroll cycle in Mozambique are generally paid on a monthly basis.

13th Salary

In Mozambique, employers are not required to pay bonuses but performance-based and seniority bonuses are common.


Paid Time Off (PTO)

Employees are entitled to 30 days’ leave per year. Employees accrue their annual paid leave during their first year of employment with an organisation at a rate of one day per month worked.

This doubles to two days per month in their second year.

Public Holidays

There are 10 public holidays.

Sick Days

Employees can get compensation for their time out of work due to illness through the National Social Security Institute.

Employees also may be eligible for benefits under Mozambique’s social security system. Eligible employees receive 70% of their average daily earnings for up to 365 days after a three-day waiting period.

Maternity Leave

Female employees are entitled to 60 days, which may begin up to 20 days before the due date; however, sick leave is considered a justified absence if the employee can provide a medical certificate.

Employees receive 100% of their average daily earnings if they have made at least 12 months of contributions in the 18 months before the expected due date

Paternity Leave

Male employees are entitled to one day of paternity leave, every two years; it must be taken the day immediately following the birth.

Parental Leave

No Info.

Other Leave

Employees in Mozambique may also be entitled to:

  • Shared parental leave
  • Carers leave
  • Specific provisions for parents of disabled children

Marriage Leave

No Info.

Bereavement Leave

In Mozambique, employee may receive 5 days of bereavement leave.


Termination Process

A mutual agreement by the employer and employee to terminate the employment relationship must be in writing and identify the effective date. Employment contracts can expire or be terminated by mutual agreement or by either party (with or without just cause).

An employment contract expires at the end of its term if for a fixed period, on the completion of work, or upon the death of the employer or employee.

Notice Period

An employer can terminate but he/she must provide prior notice 30 days before the date of termination & the employee is eligible to receive compensation in this case.

Severance Pay

Severance pay in Mozambique depends on the circumstances of the termination and the employee’s contract type.

  • fixed-term contract - employees who are terminated prior to their contract ending, but after the probationary period, the severance pay must be equal to the pay they would have received between the date of termination and the contract’s expiration date.
  • indefinite-term contracts - severance is dependent on the salary received by the employee.

Probation Period

The probation period in Mozambique is 90 days.