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Djibouti, a small nation on the northeast coast of the Horn of Africa, holds significant regional and geopolitical importance despite its diminutive size. Positioned in the Bab el Mandeb Strait, it sits at the eastern juncture of the Red Sea and the Gulf of Eden.
The capital, Djibouti City, is uniquely situated on coral reefs at the gulf's entrance. Other major towns include Obock, Tadjoura, Ali Sabieh, Arta, and Dikhil.
Djibouti's strategic location at the crossroads of Africa, the Middle East, and Asia makes it an ideal hub for businesses involved in international trade and logistics.
To bolster its position as a crucial regional business and trade hub in the Horn of Africa, the government focuses on financial, telecommunications, and trade-related services. Consequently, the service sector constitutes four-fifths of the country's GDP.
Labour laws in Djibouti regulate employment in the country and permit contracts to be either verbal or written. Typically, contracts are drafted in the local language and must include the following information:
For indefinite-term contracts in Djibouti, probationary periods are permitted as follows:
The standard workweek in Djibouti is 48 hours.
The employer in Djibouti can request employees to work overtime after informing both the employees and the labour inspector. The maximum limit for overtime is 5 hours per week per worker, and compensation is provided at an increased rate as stipulated in the collective agreement.
Djibouti does not have a mandatory minimum wage. Instead, wages are currently established through collective bargaining agreements.
In Djibouti, the payment of a 13th-month salary is not obligatory.
Djibouti employs a territorial tax system where both Djiboutian nationals and non-Djiboutian nationals with Djiboutian-source income are subject to taxation. The tax rates are progressive, reaching up to 30% for employment income.
Djibouti's Social Security System for Old Age, Disability, and Survivors covers salaried workers, including private-sector and certain public-sector employees. Mandatory contributions are 4% of monthly earnings, while voluntary contributors pay 8% of their last monthly earnings, with no specified minimum or maximum earnings for calculation.
The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Djibouti tailored to your needs.
In Djibouti, employers have the authority to terminate employment based on professional inadequacy, misconduct, or redundancy. Employees also have the option to terminate their contracts through resignation. In both cases, a notice must be provided to inform the relevant party of the decision.
In Djibouti, a notice period of up to 3 months is required when terminating an employment contract.
In Djibouti, employees are entitled to severance pay if they are unjustly dismissed. The amount of severance pay depends on the size of the employer's organisation and must not exceed the following amounts:
Djibouti observes 9 mandatory public and provincial holidays in a calendar year:
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