Do I Need a Local Entity to Hire in Equatorial Guinea?

In Equatorial Guinea, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can legally employ individuals. This setup is essential for managing payroll, tax obligations, and employee rights under local law. Without a local entity, your company cannot directly employ individuals, as you won't be able to fulfill the necessary legal and tax requirements.

Fortunately, using an Employer of Record (EOR) is a viable alternative. An EOR allows you to hire employees in Equatorial Guinea without the need to establish a local entity, handling all compliance and payroll responsibilities on your behalf.

What is Required to Employ Someone in Equatorial Guinea?

• Local employing entity required to directly employ? Yes (unless using an EOR)
• Payroll registration required? Yes (mandatory for employer obligations)
• Withholding/tax remittance required? Yes (employers must withhold taxes from salaries)
• Social contributions required? Yes (employers are responsible for social security contributions)
• Local employment agreement required? Yes (written contracts are mandatory under local law)
• Mandatory benefits to budget? Yes (includes social security and other statutory benefits)
• Works council/collective agreements considerations? Usually (collective agreements may apply in certain sectors)

Best Options If You're Hiring in Equatorial Guinea

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but it's essential to ensure that the contractor relationship is genuinely independent.

While you can hire contractors without establishing a local entity, Equatorial Guinea has strict regulations regarding worker classification. Misclassification can lead to significant legal risks. To mitigate these risks, consider the following:

• Ensure contractors have multiple clients and control over their work.
• Avoid directing their daily tasks or integrating them into your business structure.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 2–4 months to set up an entity in Equatorial Guinea, depending on the required registrations and approvals.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 300,000–800,000 XAF per month ($500–$1,300)
• Payroll provider: Estimated 50,000–150,000 XAF per employee per month ($80–$250)
• Employer registrations and recurring compliance: Estimated 100,000–300,000 XAF per year ($160–$500)
• Corporate tax filings and annual reporting: Estimated 500,000–1,500,000 XAF per year ($800–$2,500)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Equatorial Guinea

Hiring in Equatorial Guinea can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Equatorial Guinea quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.