ABOUT SÃO TOMÉ AND PRÍNCIPE

São Tomé and Príncipe is an island nation located off the western coast of Central Africa in the Gulf of Guinea, near the equator. Comprising two main volcanic islands, São Tomé and Príncipe, along with several smaller islets, it is recognized as one of Africa’s smallest countries both by area and population. The capital of São Tomé and Príncipe is São Tomé city, which is also the largest and most populated urban center. According to the World Bank, São Tomé and Príncipe is classified as a Lower-Middle-Income country, actively working towards sustainable development. The currency of São Tomé and Príncipe is the São Tomé and Príncipe Dobra (STD), and the value of 1 Indian Rupee is approximately 255.65 STD at the time of writing this article. The population of São Tomé and Príncipe was estimated to be around 235,536 in 2024. As an island nation, it has no land borders. The official language is Portuguese, reflecting its colonial history, but various Creole dialects are also spoken. The majority of the population practices Christianity (primarily Roman Catholicism). Currently, there are international airports on both main islands, with São Tomé International Airport (TMS) being the primary gateway, offering regular flights to various parts of the world and providing convenient air connectivity. As an island nation, São Tomé and Príncipe boasts commercial seaports, notably in São Tomé, which are crucial for facilitating the country’s trade requirements, enabling the import and export of goods and resources.

The corporate tax rate for businesses in São Tomé and Príncipe is generally 25%. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and, if required, even helping you find a rental property for your office.

Establishing a business in São Tomé and Príncipe has to be done with utmost care, keeping in mind the laws of the country. The legal framework for business registration is generally based on the Portuguese civil law system. A foreign investor planning to start a business in São Tomé and Príncipe can form various company types, such as a Limited Liability Company (Sociedade por Quotas – Lda), Public Limited Company (Sociedade Anónima – SA), or a Branch Office. A Limited Liability Company (Lda) formed and registered in São Tomé and Príncipe generally allows foreign investors to own 100% of the company.

In case an investor is planning to establish an Lda in São Tomé and Príncipe or a corporation business setup, Opesh Group will be helping you in taking the right decision for setting up your business in São Tomé and Príncipe, and we will also guide you about how to follow the procedure while formulating your company in São Tomé and Príncipe.

Types of Business which can be started in São Tomé and Príncipe:

• Tourism: With its pristine rainforests, unique biodiversity, and beautiful beaches, São Tomé and Príncipe is ideal for eco-tourism and nature-based tourism. Opportunities exist in developing resorts, eco-lodges, tour operations (diving, hiking, birdwatching), and cultural tourism.
• Agriculture: Historically reliant on cocoa, the country has potential for diversification in other agricultural products. Opportunities include cocoa production, coffee, palm oil, and various fruits and vegetables. Investment in improving farming techniques, agro-processing, and organic farming can yield good returns.
• Fisheries: As an island nation, fishing is a vital sector. Opportunities are present in sustainable fishing practices, fish processing, aquaculture, and seafood export.
• Renewable Energy: São Tomé and Príncipe has significant potential for solar and hydropower. Investment in renewable energy projects is crucial for the country’s energy security and can be attractive to investors seeking sustainable ventures.
• Infrastructure: As a small island developing state, there’s a continuous need for infrastructure improvements, including roads, port facilities, and public utilities. This creates opportunities for construction and engineering companies.
• Logistics and Trade: Due to its strategic location in the Gulf of Guinea, the country aims to become a regional logistics hub. Opportunities exist in port services, shipping, and warehousing.
• Oil and Gas (Potential): While currently minimal, São Tomé and Príncipe has untapped oil deposits in its exclusive economic zone. Future exploration and development could open significant opportunities in the energy sector.

Advantages of Starting Business in São Tomé and Príncipe:

• Political Stability: São Tomé and Príncipe is known for its democratic stability, providing a secure environment for foreign investment.
• Strategic Location: Situated in the Gulf of Guinea, it can potentially serve as a maritime gateway and logistics hub for West Africa.
• Untapped Tourism Potential: The country offers a unique and unspoiled natural beauty, with significant potential for growth in the niche eco-tourism market.
• Government Support: The government is actively seeking foreign investment to diversify its economy and offers incentives in priority sectors.
• Rich Natural Resources: Beyond potential oil reserves, the country has fertile land and rich fishing grounds.
• Developing Infrastructure: Ongoing efforts to improve infrastructure aim to enhance connectivity and facilitate trade.

Business Opportunities for Indians in São Tomé and Príncipe:

There are emerging business opportunities in São Tomé and Príncipe for new investors who are planning to start their business abroad. The country, while small, is actively seeking foreign investment to diversify its economy and reduce its reliance on traditional agricultural exports. Indian investors can explore opportunities in tourism development, agriculture (especially agro-processing for value addition), fisheries, renewable energy, and potentially in future oil and gas infrastructure. The bilateral relationship between India and São Tomé and Príncipe has seen India provide assistance in various sectors, indicating a supportive environment for Indian businesses.

Imports & Exports:

Many goods are imported and exported from São Tomé and Príncipe. The imports and exports business is an ever-growing business in any country; however, you need to do proper R&D before investing in that product which you can import or export. You need to check whether that product is suitable for your target market and how much revenue you will be able to generate from that market.

Major items which are exported from São Tomé and Príncipe to India:

• Cocoa Beans
• Palm Oil
• Coconut Oil
• Other agricultural products and some limited re-exports

Major items which are imported in São Tomé and Príncipe from India:

• Pharmaceutical products
• Machinery and equipment
• Rice and other food products
• Textiles
• Vehicles (though more commonly from Portugal, Angola, China)
• Chemicals

Manufacturing:

Opportunities in manufacturing are primarily focused on light industries and agro-processing, adding value to local agricultural and fishing products. This could include processing cocoa, coffee, and palm oil, or producing basic consumer goods.

Mining:

São Tomé and Príncipe’s primary mining potential lies in its offshore oil and gas reserves, which are largely untapped. While solid mineral mining is not a significant sector, the potential for hydrocarbons could attract substantial investment in the future.

Major Indian companies which are currently working in São Tomé and Príncipe:

While the presence of large, well-known Indian multinational corporations is limited given the country’s small size, Indian interests have been notable in certain areas:

• ONGC Videsh Limited (OVL): An Indian public sector undertaking, OVL has had a stake in offshore oil exploration blocks in the Joint Development Zone (JDZ) with Nigeria, indicating Indian involvement in the country’s potential hydrocarbon sector.

• Aban Engineering: Has also been involved in drilling activities in the JDZ.

• There’s also a smaller community of Indian traders, especially in the food sector, and various Indian businesses are involved in exporting goods like pharmaceuticals, textiles, and machinery to São Tomé and Príncipe.

• GDP = $678.98 million (2023)

• GDP Growth = 0.37% (2023)

• Ease of doing business rank = 170 (2019)

• GDP per Capita = $1,381 (2023)

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