Do I Need a Local Entity to Hire in Chad?

In Chad, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can legally employ individuals and fulfill local payroll and tax obligations. This setup allows you to manage employment responsibilities, including payroll, social security contributions, and compliance with local labor laws.

Without establishing a local entity, you generally cannot register as an employer, manage payroll, or issue compliant employment contracts. However, you can consider using an Employer of Record (EOR) to hire employees without the complexities of setting up a local entity.

What is Required to Employ Someone in Chad?

• Local employing entity required to directly employ? Yes (you need a local entity to register as an employer)
• Payroll registration required? Yes (must register with the Direction Générale des Impôts)
• Withholding/tax remittance required? Yes (employers must withhold income tax and remit to the tax authority)
• Social contributions required? Yes (mandatory contributions to the Caisse Nationale de Sécurité Sociale)
• Local employment agreement required? Yes (written contracts are mandatory under Chad's labor law)
• Mandatory benefits to budget? Yes (includes annual leave, maternity leave, and social security)
• Works council/collective agreements considerations? Usually (depending on the sector, collective agreements may apply)

Best Options If You're Hiring in Chad

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, you can hire contractors in Chad, but be cautious about misclassification risks.

While hiring contractors doesn’t require a local entity, it's essential to ensure that the contractor operates independently and isn't treated like an employee. Misclassification can lead to legal issues, especially if the contractor is integrated into your operations.

• Ensure the contractor has multiple clients to demonstrate independence.
• Avoid controlling their work hours or methods.
• Keep the relationship project-based and avoid long-term commitments.

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

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Chad, depending on required registrations and local processes.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 100,000–250,000 XAF per month ($150–$375)
• Payroll provider: Estimated 15,000–30,000 XAF per employee per month ($23–$45)
• Employer registrations and recurring compliance: Estimated 50,000–100,000 XAF per year ($75–$150)
• Corporate tax filings and annual reporting: Estimated 200,000–500,000 XAF per year ($300–$750)

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, which are approximately 16% of gross salary)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Chad

Hiring in Chad 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 Chad 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 managed 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.