Great talent is everywhere. If you’re looking to hire remote, global talent in Southeastern Africa, Mozambique might be a good bet for your business.
An Employer Of Record (EOR) can be ideal for companies looking to hire and pay talent worldwide without the legal and administrative hassle. For example, you may not know that in Mozambique,the full work schedule is 48 hours per week, and all employees are entitled to a 24-hour consecutive rest period (typically Sunday).
This article will walk you through the reasons, processes, and advantages of hiring employees in Mozambique through an EOR.
Why Hire Talent in Mozambique?
As Mozambique’s economy strengthens, the minimum wage remains relatively low. The average minimum wage is MZN 4390 per day, which equates to justUSD 68. North American organizations can hire Mozambique-based talent for considerably below market rate, saving money without sacrificing skill.
How Can I Legally Hire an Employee in Mozambique?
Your business must have a local legal entity to hire new employees in Mozambique. Establishing a local entity can be a legal nightmare and is only worth it if you set up long-term operations in the country.
This is where EORs come in handy. An EOR is a broker for hiring talent outside of the country you legally operate in. It will already have an entity set up and the legal framework in place to do the hiring for you. This gives you more time to focus on managing relationships with your employees and growing your business. Going through an EOR is a simple way to hire talent in Mozambique without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Mozambique can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and other HR services.
To learn more, check out our article on everything there is to know about EORs.
Contracts and Documentation
An EOR will handle the tedious administration of preparing and collecting contracts and documentation. This includes locally compliant employment offers, signed contracts, banking information, and more so you can focus on growing your business.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision, and life insurance and retirement savings plans. A comprehensive EOR will have those types of benefits built into its service offering.
Vacation and Public Holidays
In Mozambique, employees' vacation is awarded based on the length of employment at a particular company. Mozambicans will accrue one day for every month of actual service during the first year of service; two days for every month of actual service during the second year and thirty days for every year of actual service from the third year onwards.
There are ten public holidays observed by Mozambicans across the country. As of 2023, they include:
- January 1: New Year’s Day
- February 3: Mozambican Heroes Day
- April 7: Mozambican Woman's Day
- May 1: Worker's Day
- June 19: Juneteenth
- June 26: Independence Day
- September 7: Lusaka Agreement Day
- October 4: Peace and Reconciliation Day
- November 10: Maputo City Day
- December 25: Christmas Day/Family Day
Taxes
Employers in Mozambique pay 4% of the employee’s salary in social security.
Understanding the tax laws in Mozambique can be a long and complicated process but it is necessary to ensure you are paying employees compliantly and abiding by local Mozambican laws. Thankfully, an EOR can handle the logistics and ensure that payroll is processed correctly and per the regulations in whichever country your employees reside in.
What Are Your Responsibilities?
While the EOR handles everything related to legal and HR processes, everything else will fall to you as the employer. You take care of your remote, global staff in the same way you would your local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on.
The relationship with the employee won’t be all that different through an EOR. However, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Going Through an EOR in Mozambique?
Using an EOR to hire talent in Mozambique will save you time, reduce costs, and mitigate risks.
Setting up an entity for hiring in Mozambique is time-consuming and frankly, can be a massive headache. Since the EOR is already set up to hire employees in the country, it will be faster and easier to start hiring immediately. The process won’t be that much different from hiring locally.
The set-up and HR costs can also be quite high, so going through an EOR can save you money. You will also be paying lower salaries than in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience navigating complex local HR policies, you won’t have to worry about any issues arising from improper hiring practices.
How Do I Choose the Right EOR for Me?
Before selecting a vendor, consider these 5 things:
- Local Experience: Does the EOR have experience hiring in Mozambique? As discussed earlier, one of the most significant advantages of hiring an EOR is the assurance of compliance. This often requires a lot of experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Protecting intellectual property in a remote working environment is critical. Ensure your vendor of choice has a specific agreement outlining how they plan to keep your sensitive information safe and secure.
- Collaboration: Ensure your vendor’s approach to communication and collaboration with its clients aligns with your organization’s approach. Love having a point of contact? Perhaps all you need is access to a Slack channel to quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you establish a business entity in Mozambique – giving you access to a massive talent pool without all the headaches of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay, and retain the talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
