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São Tomé and Príncipe - online guide 

São Tomé and Príncipe Invest  -  Import and Export Rights 

Import and Export Rights in São Tomé and Príncipe: Strong Incentives, Weak Infrastructure 

The Core Problem

Your investment requires importing €200,000 in specialized equipment. Standard import duties would cost €20,000-€40,000. Customs clearance takes months. Your project timeline collapses.

Or you're producing for export but facing $690 per container costs, 26-day delays, and limited shipping connections. Your products can't compete internationally.

Import/export constraints can kill projects before they start.

São Tomé and Príncipe addresses this through guaranteed trade rights and duty exemptions—but logistical realities remain challenging.

The Legal Guarantees

The Investment Code (Decree-Law 19/2016) provides clear rights for investments of €50,000 or more:

"The right to directly import goods from abroad and autonomous export of products produced by investors is guaranteed."

These rights are secured in your Administrative Investment Contract (CAI), making them contractual commitments.

What This Means

Import rights:

  • Direct importation without intermediaries
  • No requirement for local agents (though customs brokers are practical)
  • Freedom to source internationally

Export rights:

  • Autonomous export without government approval
  • Freedom to choose export markets
  • Direct access to international buyers

Limitation: Rights are "without prejudice to applicable customs and internal market protection rules"—meaning customs procedures and regulations still apply.

The Major Incentive: Import Duty Exemption

The most valuable benefit is complete exemption from import duties on project equipment and goods.

How the Exemption Works

Coverage: Total exemption from import duties on goods and equipment for:

  • Launching new activities
  • Expanding existing operations

Standard tariff rates you avoid:

  • Basic goods: 5%
  • Investment goods: 10%
  • Luxury goods: 20%
  • Alcohol: 20% + surcharges of 50-110% + per-liter tax
  • Petroleum products: 42-149%

Example savings:

  • Importing €150,000 in solar equipment (10% tariff): Save €15,000
  • Importing €200,000 in hotel furnishings (20% luxury rate): Save €40,000
  • Importing €100,000 in processing machinery (10% rate): Save €10,000

The Critical Conditions

You must prove two things:

1. Submit provisional list to Customs Directorate

  • Detailed list of all goods/equipment to import
  • Specifications and purposes
  • Submitted before importation

2. Goods not locally available OR local goods inadequate

  • Equipment/goods not produced in São Tomé and Príncipe, OR
  • If produced locally, don't meet required quality/price/functionality standards

This protectionist condition is designed to favor local suppliers when viable alternatives exist.

Practical impact: For specialized equipment (solar panels, hotel machinery, processing equipment), local alternatives rarely exist. For basic goods (construction materials, furniture), you may need to demonstrate local inadequacy.

What's NOT Exempted

Critical limitation: Exemption covers import duties only.

You still pay:

  • Stamp duty on import transactions
  • Computer tax (taxa informática)
  • Service fees for customs processing
  • VAT (10-15%) on imported goods

Example:

  • Equipment value: €100,000
  • Import duty (10%): €0 (exempted)
  • Stamp duty (varies): €500-1,000
  • Computer tax: €200-500
  • Service fees: €300-600
  • VAT (10%): €10,000

Total cost: ~€11,000-12,000 (not €0)

Key point: You save the import duty but not all import-related costs.

Sector-Specific Benefits

Agriculture, Agro-Industry, Livestock, Fisheries

Complete import duty exemption on goods/equipment exclusively for project implementation, subject to local availability condition.

Tourism and Hotels

Import duty exemption on all equipment and goods for hotel construction, expansion, or modernization.

International Trading

  • Import duty exemption on goods
  • Flat 5% corporate tax rate (vs. 25% standard)

Example: You establish a trading company importing goods for regional distribution. You pay 5% tax on profits instead of 25%—a massive competitive advantage.

Export Incentives

Tax Benefits

Accelerated depreciation: Double the standard rate for export-focused investments

International trading rate: 5% corporate tax for export businesses

The Export Reality

Despite incentives, export infrastructure faces severe challenges:

Trade imbalance:

  • 2019 exports: $9.7 million
  • 2019 imports: $126.3 million
  • Export coverage: 7.2% of imports

Export concentration: Cocoa and palm oil represent 97% of exported goods (2024)

Logistics performance:

  • World Bank ranking: 106 out of 160 for trade infrastructure quality
  • Border compliance time (export): 83 hours
  • Border compliance cost (export): $426 per container
  • Documentary compliance: 17 hours, $75

Container shipping (2013 data, likely similar now):

  • Export: 8 documents, 26 days, $690
  • Import: 7 documents, 28 days, $577

The constraint: High costs and delays make exports difficult except for high-value, low-volume products (specialty cocoa, organic coffee, premium seafood).

Import/Export Restrictions

Prohibited Goods

Imports prohibited for:

  • Morality reasons
  • Security concerns
  • Protection of human life, flora, fauna
  • National heritage protection
  • Industrial/commercial property protection

Authorization Requirements

Specific goods require pre-approval:

  • Chainsaws: Forestry Directorate authorization
  • Pork products: Poultry Directorate authorization
  • Birds and unprocessed poultry: Sanitary/phytosanitary authorization (since 2008)

ICT Goods

  • Effective tariff on ICT goods: 10.06%
  • Zero-tariff coverage: 0% (no ICT goods enter duty-free under standard rules)

Note: Investment project exemptions can override this for ICT equipment needed for your operation.

Practical Strategies

1. Maximize Duty-Free Imports During Setup

Front-load equipment imports during construction/setup phase when exemptions apply:

  • Import all machinery upfront
  • Stock spare parts generously
  • Bring in consumables for first 1-2 years of operations

Why: Easier to justify duty exemption for initial project needs than ongoing imports.

2. Document Local Inadequacy

For goods with potential local alternatives, prepare evidence:

  • Technical specifications your project requires
  • Quality certifications needed
  • Price comparisons showing local options are uneconomical
  • Timeline requirements local suppliers can't meet

Why: Justifies exemption claim if customs challenges local availability.

3. Use Specialized Customs Broker

Despite "direct import" rights, engage experienced customs broker:

  • Navigates documentary requirements
  • Expedites clearance process
  • Handles disputes with customs officials
  • Knows when/how to claim exemptions

Cost: Typically 1-3% of shipment value—worth it for smooth process.

4. Plan for VAT Cash Flow Impact

Remember: Import duty exemption doesn't eliminate VAT.

Budget for:

  • 10-15% VAT on all imported goods
  • Upfront payment required
  • May be reclaimable depending on your tax status

Example: €200,000 equipment import requires €20,000-30,000 VAT payment at customs.

5. Export Structure for High-Value Products

Given high logistics costs, export only:

  • High-value, low-volume products (specialty coffee, premium cocoa, gourmet products)
  • Products where quality/uniqueness justifies premium pricing
  • Goods targeting niche markets willing to pay

Don't export:

  • Bulk commodities (can't compete on logistics)
  • Price-sensitive products
  • High-volume, low-margin goods

6. Consider Regional Export Markets

Instead of Europe/US:

  • Target closer African markets (Angola, Gabon, Nigeria)
  • Lower shipping costs and faster delivery
  • Growing middle-class demand for quality products

Temporary Importation

Special regime for:

  • Research/extraction equipment (oil/gas)
  • Equipment under leasing contracts
  • Temporary project needs

Requires:

  • Guarantee of duties (bond or deposit)
  • Ministerial authorization
  • Time-limited approval

Useful for: Testing equipment before permanent import, short-term project needs.

Timeline Expectations


Realistic import process:

  • Submit provisional list to customs: Week 1
  • Customs review/approval: 2-4 weeks
  • Ship goods: 2-4 weeks (depending on origin)
  • Border compliance/clearance: 150 hours (6+ days)
  • Total: 8-12 weeks from order to delivery

Plan accordingly: Don't assume quick turnaround even with duty exemptions.

Bottom Line

São Tomé and Príncipe provides strong legal guarantees for import/export rights with substantial duty exemptions that can save 10-20% of equipment costs.

However:

Import duty exemption doesn't mean free imports—you still pay VAT, stamp duty, taxes, and fees (total ~12-15% of value).

"Not locally available" condition creates protectionist barrier, though rarely binding for specialized equipment.

Logistics infrastructure is weak: High costs ($406-690 per container), long delays (150 hours border compliance), poor connectivity (ranked 106/160).

Export viability is limited: Only high-value, differentiated products can overcome logistics costs.

Your approach:

  1. Claim all duty exemptions available—prepare documentation thoroughly
  2. Front-load imports during setup phase when exemptions are clearest
  3. Budget for non-duty costs (VAT, fees, broker) at 12-15% of import value
  4. Use professional customs broker despite "direct import" rights
  5. Export strategically—only products where value justifies logistics costs
  6. Plan 8-12 week timelines for import processes

The legal framework is genuinely favorable. The duty exemptions are real and valuable. But infrastructure constraints mean execution is slower and costlier than the legal guarantees might suggest.

For equipment-intensive projects (hotels, renewable energy, processing facilities), the duty exemptions make São Tomé and Príncipe economically viable. Without them, import costs would be prohibitive.

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