Offshore Companies in São Tomé and Príncipe

The offshore company regime, governed by Decree-Law No. 70/95 of December 31 and supported by subsequent regulations, offers a flexible framework for international entrepreneurs. This article explores the eligibility conditions, minimum capital requirements, operational regimes, and management structures for offshore companies in STP, enriched with contextual insights into its economic landscape.

Eligibility Conditions

Offshore companies in STP must adhere to strict criteria to maintain their special status under Decree-Law No. 70/95. They must be incorporated and registered in accordance with this law, ensuring compliance with its legal framework. Their activities must be exclusively governed by the free regime or extraterritorial operations covered by the offshore regime, though ancillary activities are permitted if necessary to support the primary business. Timely payment of registration and annual fees is mandatory to sustain operational legitimacy.

A key restriction is that offshore companies cannot hold shares, voting rights, or direct/indirect control over another company registered under STP law with corporate status. They are also prohibited from owning rural or real estate assets in the national territory, except through leases, rights of occupation, or domicile for operational purposes, unless engaged in activities under the Free Regime Decree-Law or offshore banking regulations. Similarly, ownership or enjoyment rights over movable assets, financial assets, or other holdings in the national territory are limited to what is essential for their stated purpose, preventing undue local economic entanglement.

Minimum Capital Requirements

The minimum capital threshold varies by company type, reflecting the scale and risk of offshore operations. Offshore limited liability companies require a minimum share capital equivalent to USD 5,000, payable in a freely convertible currency, providing a low entry barrier for small-scale international ventures. For offshore banks, the minimum capital is significantly higher at USD 1,000,000, as stipulated by the Banking Regulations for the Operation of Offshore Banks. This higher threshold ensures financial stability and aligns with international banking standards, with additional licensing requirements overseen by the Central Bank.

Regime of Offshore Companies and Banking Activities

Offshore companies, including those engaged in banking, operate under a distinct regime tailored to their extraterritorial focus. Offshore banks established in STP are subject to specialized regulations, with licensing authority vested in the Governor of the Central Bank, based on proposals from the Approvals Office (APCI). This process ensures rigorous vetting of financial institutions, protecting STP's reputation in global markets. The Banking Regulations detail licensing prerequisites and operational guidelines, emphasizing capital adequacy and compliance.

Beyond banking, offshore companies benefit from STP's tax advantages, such as a reduced Corporate Income Tax (IRC) rate of 10% for new activities (versus the standard 25%), as outlined in the Investment Code (Decree-Law No. 19/2016). They are exempt from certain domestic taxes like SISA (Real Estate Transfer Tax) and enjoy import duty waivers on equipment if no local equivalents meet quality or technical standards. These incentives, administered via APCI, make STP competitive, though the IMF's push to revoke the Temporary Law on Investment Incentives (Law 9/2023) by year-end 2025 may refine this framework for greater transparency.

Management Competence

The Trade and Investment Promotion Agency (APCI), established under Decree-Law No. 57/2013 of December 31, serves as the authority for Free Zones and oversees offshore activities. APCI authorizes the fee structure, ensuring cost predictability for investors. The Offshore Business Center of São Tomé acts as the dedicated Registration Office, streamlining incorporation and compliance processes through the One-Stop Shop (GUE), which handles registrations in 1-5 days. This centralized approach, supported by the Ministry of Justice, enhances efficiency for foreign entities.

Broader Context and Challenges

STP's offshore sector complements its broader investment climate, with GDP growth projected at 3.1% in 2025, driven by tourism and emerging oil prospects in the Nigeria-São Tomé and Príncipe Joint Development Zone (JDZ). The offshore regime taps into global demand for tax-efficient structures, bolstered by the August 2025 Citizenship by Investment (CBI) program, offering citizenship for $90,000+ donations with visa-free access to 57 countries. However, challenges include limited infrastructure (e.g., unreliable power) and a small market (population ~232,000, GDP ~$670 million), which may deter large-scale operations.

The JDZ, while promising, has underdelivered—exploratory drilling by Shell in 2022 and planned for 2025 has yet to yield significant revenue, underscoring risks in resource dependency. Offshore companies must navigate these uncertainties, alongside potential regulatory shifts from IMF reforms under the Extended Credit Facility (approved December 2024), which aim to strengthen governance.

Opportunities for Investors

Offshore companies in STP offer a cost-effective base for international trade, asset management, or banking, with minimal capital requirements and tax benefits. The USD 5,000 entry for limited liability companies suits startups, while the USD 1 million threshold for banks attracts serious financial players. Pairing with CBI provides residency perks, enhancing global mobility. Sectors like fintech or maritime services could thrive, given STP's port potential.