Africa: Posting Employees to Africa Presents Challenges, Opportunities, PWC Manager Says

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By Andrea Barbara Schuessler

Africa's potential for growth is enormous but posting employees there is challenging, Fabio Henriquez, assistant manager with the Africa Coordination Center of PricewaterhouseCoopers in Johannesburg, said in a March 23 webinar on Doing Business in Africa—Opportunities and Challenges for Posting Employees PWC's Frankfurt office emailed to Bloomberg BNA April 6.

Africa is a very diverse continent with 54 countries and some 3,000 ethnic groups and 2,000 languages, said Henriquez, who was posted from Switzerland.

Consequently, companies should carefully prepare and accompany employees that are posted to African countries, he added.

Africa's potential for growth and mineral deposits is higher than in other continents, Henriquez said.

However, many African countries lack qualified employees with business experience, he added.

Africa would require special posting directives when posting employees from Germany, for example. For instance, in Nigeria a white woman can't drive in a car on her own. So local laws and security aspects need to be especially addressed and included in policies when sending employees to Africa. In addition, salaries and benefits need to be adjusted to challenging security situations, Henriquez said in the webinar.

Henriquez recommended a “look and see“ trip for the decision-making process for employees to work in Africa since living in Africa could be very challenging.

Companies also need to consider good time management because processes such as relocating families might take longer in Africa, he said.

The choice of which employees to post to Africa would be crucial because of the political and economic insecurity in many African countries, Henriquez said.

Immigration would be a very difficult issue in Africa, also because of high unemployment rates in many African countries. Visa application would be difficult and often be limited to specific quotas, he said.

Companies should also have a long-term plan how to integrate local staff in their African subsidiaries.

There would be a trend for short-term posting strategies to Africa due to difficult security and visa situations. Plus, expensive relocation packages, for example for families, would then not be necessary, Henriquez said.

Tax Aspects need to especially considered in African countries

Tax aspects need to be especially considered for African subsidies since laws can change very quickly because of changes in governments.

Often, practical implementation of laws would be handled differently when a new tax inspector would take office, he said. Therefore, companies should have strategies ready in their mobility policies for sudden changes in legislation.

For example, South Africa has increased the tax limit (“marginal commission rate”) for better incomes this year because of the difficult economic situation in the country.

In Angola, for example, employees need to be paid now in local currency, Henriquez said.

To contact the reporter on this story: Andrea Barbara Schuessler in Berlin at correspondents@bna.com

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For More Information

PricewaterhouseCoopers has around 1200 tax experts in 66 offices in 34 African countries and can be contacted for advice and information on subsidiaries in Africa at:

Africa.coordination@za.pwc.com; Henriquez.fabio@pwc.com (phone +27 (0)11 7975900)

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