Timor-Leste

Employer of Record (EOR) in Timor-Leste

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Timor-Leste . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Timor-Leste.

Employer of Record people
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Currency
New Zealand Dollar
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Capital
Dili
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Region
Asia
Megaphone
Language
Portuguese
Hire remote employees
Population
1318445
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GDP
$2.95 billion
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GDP growth
-0.08
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Ease of doing business
39.4
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World GDP share
0

1. Grow your team in Timor-Leste with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Timor-Leste , particularly if you don't have established local relationships. You can hire employees in Timor-Leste effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

East Timor, usually known as Timor-Leste, is an island nation in Southeast Asia. It is officially known as the Democratic Republic of Timor-Leste (Portuguese: Repblica Democrática de Timor-Leste, Tetum: Repblika Demokrátika Timór-Leste). It consists of the eastern half of Timor, the surrounding islands of Atauro and Jaco, and Oecusse, an exclave on the island's northeastern side bordered by Indonesian West Timor. The Timor Sea separates the nation from its southern neighbor, Australia. The nation is 15,007 square kilometers in size (5,794 sq mi). Its capital is Dili.

East Timor was colonized by Portugal in the sixteenth century and was known as Portuguese Timor until November 28, 1975, when the Revolutionary Front for Independent East Timor (Fretilin) proclaimed independence. It was attacked and seized by the Indonesian military nine days later, and it was designated as Indonesia's 27th province the next year. The Indonesian occupation of East Timor was marked by a decades-long battle between separatist factions (particularly Fretilin) and the Indonesian military.

Indonesia ceded sovereignty of the area in 1999, after a United Nations-sponsored act of self-determination. On 20 May 2002, Timor-Leste became the first new sovereign state of the twenty-first century, joining the United Nations and the Community of Portuguese Language Countries. East Timor expressed its ambition to join the Association of Southeast Asian Nations as the eleventh member in 2011. (ASEAN). East Timor and the Philippines are Southeast Asia's only two primarily Catholic countries.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Timor-Leste is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

Employers and employees both have the right to end their contracts with sufficient notice. Employers may terminate an agreement only for the reasons specified in the Labour Code, which are as follows: contract expiration for fixed-term agreements; mutual agreement between parties; termination on the employee's initiative; termination on the employer's initiative on reasonable grounds; and termination for market, technological, or structural reasons relating to the business, with a minimum of no less than one year.

Notice period

In Timor-Leste, the notice period is limited to 30 days.

Probation period

The probation period is set at eight to fifteen days for fixed-term contracts. For contracts with an indefinite duration, the probation period is set at one to three months.

Severance pay

There are no specific provisions tailored to severance payments in Timor-Leste.

6. Working hours

There is no information about the working hours for this country.

General working schedule

According to the Labour Code, working hours cannot exceed eight hours per day or 44 hours per week. Employees are not permitted to work more than four hours of overtime per day or sixteen hours per week unless the additional overtime is necessary to prevent or repair severe damage to the business. Employees are entitled to a one-hour break after every five hours worked.

Overtime

Additional compensation is required for overtime, work on public holidays, and night work. Overtime work is compensated at 50% of the regular rate of pay. Working on a federal holiday is compensated at twice the regular rate of pay. Work performed at night or between the hours of 9 p.m. and 6 a.m. is compensated at 125 percent of the regular pay rate.

7. Minimum wage

There is no information about the minimum wage for this country.

Timor-Leste's minimum wage rate is US$115 per month.

8. Employee benefits

There is no information about the employee benefits for this country.

Because Timor-health-care Leste's system is mostly financed by the government, employer-provided health-care coverage is not needed.

Individuals have access to a government-run social security system, and businesses are required to enroll both the firm and its workers in the system. Employers may incorporate their own perks and provisions for internal workers, but they are not required to provide any extra benefits.

According to the Labour Code, workers must give one yearly bonus on or before December 20 of each year. The bonus should be equal to one month's salary. There are no further incentives needed, but your business may provide additional bonuses to create a more attractive job package to local talent.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Timor-Leste citizens are taxed on global taxable income, which is defined as the difference between gross income and allowed deductions. Non-residents are typically taxed on Timor-Leste-sourced income attributable to a permanent establishment (PE). Non-residents who do not have a PE may be liable to a 10% WHT.

Corporate income tax (CIT) is typically levied at a fixed rate of 10% on corporate profits.

Individual income tax

Timor-Leste citizens are taxed on their global income, while non-residents are taxed solely on their income earned in Timor-Leste. Residents with foreign-sourced income may be eligible for a foreign tax credit.

Individual taxpayers in Timor-Leste are taxed on their taxable income, which is the difference between their gross and net income.

The following are the income tax rates that apply to a domestic individual taxpayer:

For an annual taxable income of up to USD 6,000, the income tax rate is 0.

For an annual taxable income over USD 6,000, the income tax rate is 10 percent.

The income tax rate for non-resident individuals earning taxable income in Timor-Leste is 10% (flat rate) on all taxable income generated in Timor-Leste.

VAT, GST and sales tax

Sales tax is levied on the following items:

(1) taxable goods imported into Timor-Leste and

(2) taxable goods sold or taxable services provided in Timor-Leste on or after the date specified by Parliament.

Sales tax payers include the following individuals:

(1) A taxpayer who imports taxable goods into Timor-Leste.

(2) A taxpayer who sells taxable goods in Timor-Leste.

(3) A taxpayer who provides taxable services in Timor-Leste.

The sales tax rates for taxable products imported into Timor-Leste are 2.5 percent and 0 percent for the sale of taxable goods and supply of taxable services in Timor-Leste.

10. VISA and work permits

There is no information about VISA and work permits for this country.

A journey to Timor-Leste may need obtaining a visa. You should examine the country's visa rules. What we can tell you is that nationals of the European Union and Cape Verde may enter Timor-Leste and remain for up to 90 days. In actuality, inhabitants of EU nations are permitted to remain for 90 days, but people of Cape Verde are only permitted to stay for 30 days. Visas on arrival are also available, although there are many types of visas on arrival. One is accessible at any point of entry and is only available to qualifying nations; the second is available to everyone else but may only be acquired at Presidente Nicolau Lobato International Airport and/or Dili Seaport. It allows you to remain for 30 days.

What you should know is that anybody may apply for a visa before they arrive. They may apply online or at one of East Timor's diplomatic posts.

You may read Timor-visa Leste's policy to find out where you stand on the visa requirements.

The next step is to investigate the criteria you must satisfy. You may do this online, but we suggest caution since the information you receive online is not necessarily the most credible. As an alternative, we recommend contacting the diplomatic mission and inquiring about the criteria. It is the most reliable source of information. In the meanwhile, we can inform you that all candidates must have: a valid passport that does not expire for at least another 6 months from the date of arrival, evidence of financial sustenance, and a hotel booking confirmation.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

When a firm recruits a new employee, employment contracts must be formalized in writing, according to the 2012 Labour Code. These agreements must contain certain basic information, including, at a minimum, paragraphs describing the following employment details:

Position and responsibilities

Remuneration for work location

Working schedules

Occupational classification

With Rivermate being your Employer of Record (EoR) in Timor-Leste, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

Contracts may specify whether employment will be for an indefinite or specified amount of time. Fixed-term contracts, including renewals, cannot be more than three years. The employer might impose a probationary period of eight or fifteen days for fixed contract periods, depending on the duration of the contract. The probationary period for unlimited contract periods might range from one to three months.

Payment currency

New Zealand Dollar

13.Opening a subsidiary in Timor-Leste

There is no information about the working hours for this country.

How to set up a subsidiary

If you wish to conduct business in Timor-Leste as an international firm, you must create either a subsidiary or a permanent representation in the country. If you are a nonnational, you must establish a subsidiary or a permanent representative in the country. The representative may be Timorese or a non-national resident of Timor-Leste.

To establish a subsidiary in Timor-Leste, you must satisfy a number of fundamental standards outlined in Law No.4/2004 on Commercial Companies.

You must register your subsidiary with the Ministry of Commerce, Industry, and Environment and receive a business license. To begin, you must incorporate your company as a Private Limited Liability Company. Typically, registration takes around two weeks. The license will cost you around USD 115.

To begin conducting business in the nation, you must follow the procedures outlined by the governing regulations. To begin, you should deposit a little amount of money in a bank. Then you must register your company and apply for several certifications and licenses, such as a:

1. Certificate of registration

2. Business license

3. Tax identification number

The SERVE (Service for Registration and Verification of Entrepreneurs, or Servi├žo de Registo e Verifica├žo Empresarial) platform streamlines the registration procedure in Timor-Leste. By law, your application should be assessed within five business days, but in reality, it may take longer if you have questions or require clarification on any area of your application.

You should upload the following papers to the single-service SERVE platform:

A. Identification of corporate entities

B. Memorandum of Association Acceptance Letters for each member of the corporate body

C. Taxpayer identification numbers for shareholders (TINs)

D. IDs of shareholders, as well as evidence of marital property, if relevant

E. Locations of your company's registered offices are shown on a map.

F. Documents attesting to the company's capital deposit

G. Certified copies of previous business authorizations, where relevant

H. SERVE will issue numbers to your stockholders if they do not have TINs.

You are responsible for verifying your registration with the Ministry of Finance after you have acquired a TIN. You may wish to have a corporate stamp made by a private seal maker since you may need one in the future when dealing with government organizations. The last stage in the setup procedure is to register your business and workers for Social Security, as required by law.

Subsidiary laws

To incorporate, your company must have a Memorandum of Association, according to labor rules. The Memorandum may name one or more owners who are personally liable for the corporation, or it may create subsidiary responsibility. A private firm may have up to 30 stockholders.

Only Timorese citizens have the right to own private land. International entities, on the other hand, may obtain long-term leases of up to 50 years.

13. Why choose Rivermate as your Employer of Record / PEO in Timor-Leste

Establishing an entity in Timor-Leste to hire a team takes time, money, and effort. The labor law in Timor-Leste has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Timor-Leste simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (EOR) solutions in Timor-Leste give you peace of mind so you can focus on running your business. Please contact us if you'd like to learn more about how Rivermate can help you hire employees in Timor-Leste via our Employer of Record (EOR) / PEO solution.

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