Sao Tome and Principe - Openness to and Restriction on Foreign Investment STP - Foreign Investment
Attitude toward Foreign Direct Investment
STP is one of the poorest countries in the world with an unclear path to sustained future economic growth. Its economic prospects likely depend on the government’s ability to attract international investment. The government is anxious to improve the investment climate in STP to make it a more attractive destination for foreign direct investment. There are no laws discriminating against foreign investors.
Other Investment Policy Reviews
The government has not conducted any investment policy reviews through the Organization for Economic Cooperation and Development (not a member), the World Trade Organization (not a member but an observer government), or the United Nations Conference on Trade and Development (member) in the past three years.
Laws/Regulations on Foreign Direct Investment
The Investment Code of 2007 provides for both public and mixed capital investments, allowing foreign investment in every sector of economic activity except limited areas reserved to the state (activities related to the military and paramilitary sectors and the operations of the Central Bank). There are no recent reports of government interference in the court system that could affect foreign investors.
The website http://gue-stp.net/spip.php?article24 (Portuguese language only) provides information on creating and registering companies to operate in STP.
Business Registration
STP has taken steps to facilitate investment and improve the business environment in recent years. The Millennium Challenge Corporation (MCC) worked with STP from 2007 to 2010 on a Threshold Country Program to improve investment opportunities, including creating a “one-stop shop” to help encourage new investments by making it easier and cheaper to import and export goods, reducing the time required to start a new business, and improving STP’s tax and customs administration.
There are no agencies or brokers that provide services to simplify the procedures for establishing an office in STP, but there is now a one-stop window to assist with the process. Some companies prefer to hire a legal office for assistance, but recent progress due to the MCC program has significantly reduced the cost and waiting period to start a new business. It now takes between three to five days and costs about USD 278. Although there is no online business registration processes, companies can easily register their business.
The following is a general description of how a foreign company can establish a local office:
- Provide full company documentation, translated into Portuguese.
- Check the uniqueness of the proposed company name and reserve a name.
- Notarize the company statutes with the Registration Office in the Ministry of Justice.
- File a company declaration with the Office of Taxation in the Ministry of Planning and Finance.
- Register with the Social Security Office in the Ministry of Health and Social Affairs.
- Publish the incorporation notice in the official gazette (Diario da Republica).
- Publish the incorporation notice in a national newspaper.
- Register the company with the Commercial Registry in the Ministry of Commerce, Industry and Tourism.
- Apply for a commercial operations permit (alvara).
- Apply for a taxpayer identification number with the Office of Taxation in the Ministry of Planning and Finance.
- Register employees with the Social Security Office.
- Other documents needed include: 1) copies of the by-laws of the parent company and of the minutes of the meeting of the board of directors in which the opening of the STP branch is approved; 2) a certificate of appointment of the general manager in STP; 3) a copy of any agreement signed with a Sao Tomean company or with the government of STP; 4) two copies of the application to the Court for authorization to operate; and 5) two photographs and a copy of the passport of the General Manager.
For more information contact:
GUE – Guichê Único para Empresas (Single Window)
Ministério da Justiça, Administração Pública e Assuntos Parlamentares (Ministry of Justice, Public Administration, and Parliamentary Affairs)
Avenida Amílcar Cabral, Edificio da Sat Insurance 1.ºAndar
Tel: (+239) 22-21-040, (+239) 22-22-402, (+239) 99-17-711
Fax: (+239) 22-22-256
s_ilma3@hotmail.com
Industrial Promotion
Although it lacks formal programs, STP is anxious to attract investment in sectors including agriculture, fishing, and tourism.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are no limits on foreign ownership or control except for activities customarily reserved for the state (military and paramilitary activities and the operation of the Central Bank).
Foreigners are free to establish and own business enterprises and engage in all forms of business activity in STP, with the exception of the military sector. Prohibitions exist in the ownership of certain types of guns. In addition, the form of public participation (percentage of government ownership in joint ventures) varies with each agreement.
STP is gradually moving towards open competition in all sectors of the economy, and competitive equality is the official standard applied to private enterprises in competition with public enterprises with respect to access to markets, credit, and other business operations. The government has eliminated former public monopolies in farming, banking, insurance, airline services, telecommunications, and trade (export and import).
Privatization Program
STP does not have an active privatization program.
Screening of FDI
Although the appropriate ministry reviews foreign direct investment, there is no concern that such screening mechanisms constitute a barrier to investment. STP is very eager to attract foreign direct investment.
Competition Law
There are no competition laws that interfere with foreign investment.
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