Somalia EOR & PEO

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Hire in Somalia

Despite a difficult recent history and continued challenges with security and poverty across the country, Somalia is showing signs of a recovering economy. Between 2018 and 2023, the nation’s external debt fell from 64% of GDP to under 6%. It has a population of 17.6 million and a labor force of a little over 3.25 million. It has an extremely young population with a medium age of just 15.

The average monthly wage is between $100 and $500 in the formal sector and much less in the informal industries. This makes Somalia attractive to global businesses seeking a cost-effective workforce. However, education and literacy levels are low, as are skill levels in industries other than agriculture. The problems faced by the country can make hiring in Somalia challenging. If establishing a labor force here is your goal, a Somalia Employer of Record (EOR) could be a great asset.

Facts & Stats

hire employees in Somalia

What Is a Somalia EOR?

An Employer of Record is a service that aids the hiring and managing of a workforce in a country other than a company’s own. In Somalia, this means acting as an agent, which gives foreign businesses access to Somali talent, and Somali workers opportunities to find jobs with international employers. An EOR achieves this by taking the role of local entity and legal employer within Somalia on behalf of foreign businesses. It then recruits workers who are assigned to roles within foreign companies while managing every element of the employment, from contracts to payroll and benefits, and finally, any termination processes.

Professional Employer Organizations (PEO) are often discussed interchangeably with EOR. While a PEO also carries out recruitment and human resource management services for foreign employers within Somalia, it is different in one crucial aspect. An EOR takes on the legal role of a local entity for its clients within Somalia, thus saving the cost, complications, and risk of establishing one independently. A PEO does not do this, meaning the foreign business will still need to take on that challenge before hiring can begin.

Save Money And Time with A Somalia EOR

What Are the Benefits of a Somalia EOR?

Hiring workers in Somalia can bring great rewards to a foreign business, but it also comes with significant challenges in finding the right talent, navigating local regulations, and handling cultural differences. All this can be costly and time-consuming when dealt with directly. Working with an EOR means handing over responsibilities for a Somali workforce to local experts. The advantages of outsourcing the recruitment and human resources are many, but some of the key benefits include:

Streamlined hiring: Without an EOR, it can take months of work and a significant investment of resources before even one worker is in place. With an EOR, a local team in Somalia can be created within weeks of agreeing to a fee. As an established local expert, a Somalia EOR is ideally positioned to access the best available talent at the right price without delay.
End-to-end service: A Somalia EOR takes care of every part of the employment cycle. It provides a continuous service from recruitment and contracting to administering payroll, taxes, and benefits before handling all exit procedures. An EOR will also manage any issues and disputes, either between the worker and the foreign business or with any authorities. This provides a seamless continuity of service allowing any foreign client to direct its business in Somalia with total confidence.
Legal protection: By acting as a local entity within Somalia and becoming a legal employer of all workers, an EOR assumes full liability for maintaining compliance with local laws. This not only saves its foreign clients the challenges of understanding and administering the regulations and requirements but offers valuable protection should any issues or disputes arise.

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Why Choose Horizons?

Horizons stands out as a Somalia EOR through:

A strong regional presence in Africa, meaning senior management are on the ground to deal with any issues.
Client-focused infrastructure. Horizons won’t oversell you on products and services you don’t need. Horizons offers the easiest platform to compliantly hire and pay people worldwide.
Cost-effective solutions. At $299 per employee, per month, no EOR in Somalia is more affordable. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
A customer-first culture. Horizons is an efficient bootstrapped company. It is not an externally-funded company burning investor cash to aggressively acquire new clients. Horizons is the only EOR that grows with its customer, reflecting the level of care and personal attention provided to each customer. Horizons will carefully advise on the best setup in each country: the type of contract needed, how to structure your benefits, and how to offboard a person while minimizing the risk of conflicts and extra cost
A long-term partnership. Horizons is the only EOR platform with a recruitment arm — a direct response to client demand. If any employee is leaving, or if our clients want to explore a new country, Horizons can recruit new candidates directly for the client. Horizons is:
- The only EOR doing this in-house — no subcontracting
- The only EOR doing this without a retainer — clients are only charged upon success
- The only EOR charging just a 2% fee per month.

Step-by-step Somalia EOR

How Does a Somalia EOR Work?

After agreeing to a package of services and a fee structure with a foreign employer, a Somalia EOR takes on the role of a local entity and human resources department for workers based within the region. It takes instruction regarding the roles that need to be filled and what will be expected of the Somali workers who fill them. The EOR then completes the following steps of the employment cycle:

Hire your employees: The first step toward recruiting a team in Somalia is to hire the workers. As a local expert, a Somalia EOR will use its connections and experience to begin sourcing talent. It may do this through a traditional advertising and interview process or by handpicking individuals from an existing talent pool to match them with the positions available.
Manage employment contracts and onboarding: Once the right talent has been found, a Somalia EOR offers terms before ensuring contracts are drafted, understood, agreed with, and signed. It then completes any onboarding requirements mandated by Somali employment regulations or requested by the client company. Finally, the Somali workers are assigned roles with the client company.
Process payroll and handle employment taxes: Although workers recruited by a Somalia EOR carry out their daily duties as if they were regular members of staff with the foreign client company, the EOR itself continues to be their official legal employer. As a result, the EOR is responsible for administering all payroll. The ultimate cost of monthly wages and tax requirements are met by the client company, but the processing is handled directly by the EOR.
Administer benefits: As a legal employer, the ongoing administrative responsibilities of a Somalia EOR do not end at payroll and taxes. It also handles employee benefits, both those mandated by the state and those agreed privately with the foreign client business. These include bonuses, social security contributions, leave entitlement, and any health, accommodation, or travel packages featured in the worker’s contract.
Take care of exit procedures: The final stage of the employment cycle is the termination of the working relationship. This may happen for disciplinary reasons, due to poor performance, or as a result of changing business requirements. Whatever the reason, the Somalia EOR ensures compliance with regulations until the exit process is complete.

stay compliant with Somalia labor laws

Labor Laws

Labor laws in Somalia are governed by the Labor Code, which was introduced in 1972 and has undergone revisions over the years. Given the complex socio-economic and political landscape in Somalia, employment laws and practices may vary regionally or based on local customs.

Among all the services of a Somalia EOR, maintaining compliance with local labor laws in all matters is one of the most vital.

Employment contract types

While the Somali legal system recognizes both written and oral contracts, any employment lasting three months or over should be protected by a written contract. This contract should contain clauses detailing the identities of the parties, job description, salary, bonuses, benefits, working hours, intellectual property rights, and dispute resolution protocols. It should also be in a language understood by the employee, with Arabic and English most commonly used.

Project-based

Fixed-term

Indefinite

Working hours in Somalia

While there is no codified national labor law in Somalia, several standards and guidelines have been established and are enforced through decrees issued by the Ministry of Labor and Social Affairs. It is important to note that Somalia is a disjointed nation containing some self-declared separate states such as Somaliland. Regulations in these areas may be different.

A standard working week in Somalia is defined as 48 hours spread over six days. Any hours worked in addition to this should be considered overtime and compensated at 150% of standard rates. As a guide, overtime worked by employees in Somalia should total no more than two hours each day or 12 hours in a single week.

Overtime must be compensated in the following way:

Holiday Schedule in Somalia [2024]

Workers in Somalia are entitled to paid time off for up to 11 public holidays in a calendar year. These are a mixture of Islamic religious holidays and secular occasions such as New Year’s Day, Labor Day, Independence Day, and Republic Day.

Date	Holiday name
1 Jan, 2024	New Year’s Day
7 Feb, 2024	Isra and Mi’raj
10 Apr, 2024	Eid al-Fitr
11 Apr, 2024	Eid al-Fitr Holiday
1 May, 2024	May Day
18 May, 2024	Restoration of Somaliland Sovereignty
19 May, 2024	Restoration of Somaliland Sovereignty Holiday
16 Jun, 2024	Eid al-Adha
17 Jun, 2024	Eid al-Adha Holiday
26 Jun, 2024	Independence Day
1 Jul, 2024	Republic Day
7 Jul, 2024	Muharram
17 Jul, 2024	Ashura (Tentative Date)
16 Sep, 2024	The Prophet’s Birthday (Tentative Date)

Paid time off

The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:

Sick leave in Somalia

Sick leave entitlement in Somalia can depend on a number of factors. In general, however, workers are expected to be offered at least seven days at full pay and seven additional days at half pay. A medical certificate may be required before this is authorized.

Less than 6 months of sick leave:

(percentage of regular wages owed to the employee)

Over 6 months of sick leave

In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.

Maternity leave in Somalia

Female workers requiring maternity leave in Somalia are guaranteed a minimum of 14 weeks, with at least six weeks taken post-birth, paid at a rate of 50% of their usual basic salary. Male workers should be offered at least two weeks of paternity leave at full pay. In some circumstances, allowances are also made for either paid or unpaid time off for bereavement, voting, and military service.

Annual leave in Somalia

Labor Code Law No. 65 of 18 October 1972 states every worker in Somalia should be offered at least 15 days of paid annual leave in a calendar year, accrued on a month-by-month basis. These should be given in addition to public holiday entitlement.

Termination & severance in Somalia

Regulations regarding termination, notice, and severance payments in Somalia are not codified in law. It is, therefore, vitally important that procedures are laid out and agreed upon at the time of contracting. As a guide, best practice in Somalia suggests written notice of at least 30 days should be given for termination of most roles or 10 days’ notice for manual workers. In circumstances of gross misconduct or probationary periods, this requirement is removed. Severance pay is not mandated but should be paid in relation to basic salary and length of service.

Somalia's compulsory social security contributions

There is no comprehensive national social security system that mandates compulsory contributions for employees or employers. The country lacks formalized social security programs that are common in many other countries, such as pension funds, healthcare contributions, unemployment benefits, or disability insurance.

Somalia social security for foreigners

There is no comprehensive national social security system that mandates compulsory contributions for employees or employers.

Individual income tax

In Somalia, individual income tax is not uniformly applied or standardized across the country due to the absence of a comprehensive national taxation system. The tax regime is generally underdeveloped and formal income tax collection is limited.

Health insurance

The concept of formal health insurance as seen in many other countries is not widely established due to the country’s challenging socio-economic conditions and the absence of a comprehensive national healthcare system.

hassle-free Somali compensation & benefits

Compensation & Benefits

Somalia compensation laws

While there is increasing advocacy for establishing a minimum wage in Somalia, no agreement or legislation is currently in place.

13 month salary in Somalia

Somalia does not have any legally mandated benefits or bonuses that should be offered to employees. This includes no requirement for a 13th-month salary. However, due to the poor infrastructure within the country, many employers find it advantageous to provide accommodation or mobile phone allowances as part of their employment packages.

Social security for Somali nationals

There are no national mandatory social security contributions in Somalia. However, due to the country’s disjointed structure, employers and EORs should be careful to check regional requirements at the time of hire and maintain a strong awareness of any changes that might be made during an employment cycle.

Somalia Employer Of Record Peo

Navigation

Hire in Somalia

What Is a Somalia EOR?

What Are the Benefits of a Somalia EOR?

Why Choose Horizons?

How Does a Somalia EOR Work?

Labor Laws

Employment contract types

Working hours in Somalia

Compensation & Benefits

Frequently asked questions

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Frequently asked questions

How does an EOR in Somalia handle compliance with local labor laws?

It is a prime responsibility of a Somalia EOR to maintain knowledge and awareness of local labor laws, any regional variations, and any potential upcoming changes. By doing this, it can ensure both itself and its client companies remain in full compliance with regulations at all times. In addition, an EOR assumes legal liability for this compliance, thus protecting its client companies from any potential issues.

What are the challenges of hiring through an EOR in Somalia?

An EOR is a service designed to reduce or even eliminate the challenges of hiring in Somalia. As such, the only challenge of hiring through an EOR in the region is ensuring the right EOR is chosen. Before contracting any EOR or other human resources service in Somalia, it is recommended that you thoroughly check the EORs experience, reputation, and expertise.

Somalia EOR & PEO

Start hiring in Somalia

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Hire in Somalia

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hire employees in Somalia

What Is a Somalia EOR?

Save Money And Time with A Somalia EOR

What Are the Benefits of a Somalia EOR?

Horizons is Best IN Class

Why Choose Horizons?

Step-by-step Somalia EOR

How Does a Somalia EOR Work?

stay compliant with Somalia labor laws

Labor Laws

Employment contract types

Project-based

Probationary period

Termination

Severance

Fixed-term

Probationary period

Termination notice period

Severance

Indefinite

Probationary period

Termination notice period

Severance

Working hours in Somalia

Overtime must be compensated in the following way:

For a regular workday:

For a rest day:

For a statutory holiday:

Paid time off

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Sick leave in Somalia

Less than 6 months of sick leave:

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Over 6 months of sick leave

Under 1 year of employment

1-3 years of employment

3+ years of employment

Maternity leave in Somalia

Annual leave in Somalia

Termination & severance in Somalia

Somalia's compulsory social security contributions

Somalia social security for foreigners

Individual income tax

Health insurance

hassle-free Somali compensation & benefits

Compensation & Benefits

Somalia compensation laws

13 month salary in Somalia

Social security for Somali nationals

Hire in Somalia in 24h without your own local entity.

Frequently asked questions

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