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Employer of Record in Rwanda

Employer of Record in Rwanda

Skuad's Rwanda Employer of Record (EOR) solution helps your business expand into Rwanda without the need for an entity setup. Its unified and automated global HR platform enables you to expedite the onboarding of your remote team, manage their payroll, benefits, etc., compliantly. It helps you streamline the global expansion process with the able assistance of our international network.

Rwanda at a Glance

Population: 12,374,397 (2019)

Currency: Rwandan franc (RWF)

Capital City: Kigali

Languages Spoken: English, French, Kinyarwanda, and Swahili

GDP: $11.061 billion (2020)

What You Must Know Before Employing in Rwanda

The issues of labor in Rwanda were initially governed by the law N° 13/2009 of 27/05/2009. In 2018, it was repealed, and the current law in force in Rwanda is n° 66/2018 of 30/08/2018 - Law regulating Labour in Rwanda. The new Rwandan labor law deals with contractual matters in private as well as public entities, plus it strictly demands a formal setup in business dealings. You must know the level of challenges involved in setting up a business in Rwanda before you leap. The complexities entailed are broken into bits of information and are hard to comprehend. No one can address these challenges better than Skuad.

Entitlements Explanation
Statutory Working Hours The working hours are 45 hours a week. In other words, 7.5 hours over six days.
Overtime Eligibility Overtime cannot exceed 30 days unless there is an employment contract to the contrary.
Salary There is no prescribed minimum wage. Local industries determine the rate.
Compensation Compensation is not a requirement for employees, but performance-based awards exist, depending on the employer/company.
Paid Public Holidays
  • Public Holidays in Rwanda include -
  • Assumption Day
  • Boxing Day
  • Christmas Day
  • Easter Monday
  • Eid-al Adha
  • Eid-al Fitr
  • Good Friday
  • Independence Day
  • Labor Day
  • Liberation Day
  • National Heroes Day
  • New Year's Day
  • New Year's Holiday
  • Tutsi Genocide Memorial Day
  • Umuganura
Medical Leave Employees get short-term leaves as medical leaves, for which the duration is 15 days. A medical certificate should be produced for claiming this leave. Long-term leaves are granted only upon the approval of the concerned committee. The duration is three months with pay and another three months without pay.
Maternity Leave Female employees are entitled to 12 weeks of fully paid maternity leave. A portion of the same leave can be taken before birth as well. Certification of delivery must be produced for claiming this leave. On the other hand, fathers are granted four days to two weeks of paternity leave with full pay. Further, employees are also entitled to a compassionate leave of four days and cannot exceed 10 working days in a calendar year.
Annual Leave Employees are entitled to 18 days of paid annual leave after one year of service. For every three years of consecutive service, an additional paid leave is granted with a maximum of 21 days.
Health Insurance Benefits A mandatory health care regime is followed in Rwanda.
Employee Protection and Anti-discrimination Rights Employees are guaranteed safety and security protocols. They are further protected from anti-discrimination policies under the law - 'n° 66/2018 of 30/08/2018 - Law regulating Labour in Rwanda.'
Confidentiality of Personal Information The Rwandan Penal Code is the master legislation in place to ensure first-hand protection of data.

Contractors vs. Full-Time Employees

Contractors vs. full-time Employees are like the two sides of a coin. They have their peculiar pros and cons. Rwandan business environment allows a smooth flow of service from contractors as well as full-time employees. You are the decision-maker here, and you ought to base your decision on the positives and the negatives of contractors and full-time employees.

The advantages of contractors include specialist expertise, flexibility, pocket-friendly, no Liability, and no supervision. The disadvantages of the same group include lack of certainty, excessive creativity, and no brief adherence. Per contra, the advantages of full-time employees include certainty, loyalty, and brief adherence; The disadvantages of the same group include constant supervision, risk management, and lack of experience.

A thorough perusal of the aspects mentioned above will help you pick the right option for your business.

Hiring in Rwanda

The Rwandan hiring process begins with an employment contract in place. This applies to both contractors as well as full-time employees.

Few popular websites facilitating the hiring process are as follows:

  1. RwandanJob.Com - https://www.rwandajob.com/
  2. Kora Job Portal - https://kora.rw/jobportal/
  3. Job In Rwanda - https://www.jobinrwanda.com/
  4. Job Web Rwanda - https://jobwebrwanda.com/
  5. NDANGIRA - https://www.ndangira.net/how-to-find-a-job-in-rwanda-guide-for-foreigners/ (This one is especially for foreigners in Rwanda)

Skuad, using its diversified international network, operates to facilitate hiring processes globally. Be it building home teams or a remote team, Skuad has the solution. Book a demo to know more about Skuad solutions.

Probation & Termination

Probation Period

Article 13 of the Law regulating Labour in Rwanda deals with the probation period. The probation period in Rwanda cannot exceed three months. The employer-based on the nature of work, employee's performance, and conduct--can extend the probation period to another three months. If the probation period turns out to be successful, the employee is immediately offered employment, and the same is notified in writing. On the contrary, if the probation period turns out to be unsuccessful, the employee gets immediately terminated sans terminal benefits. The re-employment of an employee does not allow for a probation period.

Termination of Service

Section 2, titled 'Termination Of Employment Contract And Dismissal Of Employee' under Chapter II, titled 'Employment Contract, Apprenticeship And Internship Contracts' of the law regulating labor in Rwanda, deals with the intricacies of termination of service. A series of Articles under Section 2 provides for copious scenarios and appropriate measures for termination. The relevant ones are highlighted below:

Article Title Explanation
24 Termination of employment contract with notice
Service Notice Period
Less than 1 year 15 days
More than 1 year 30 days
The notice must be in writing and must contain all the relevant information.

Exceptions:

  • The employee is suspended.
  • The employee is on leave.
Notice cannot be issued for employees on a probation period.
26 Termination of employment contract for gross misconduct

Termination can happen without notice in cases of gross misconduct.

The employer must give a 48 hours notice to the employee.

Instances of gross misconduct are enumerated in an Order of the Minister in charge of labor.

27 Termination of indefinite term employment contract Either party can do this for legitimate reasons.
28 Expiry and termination of a fixed-term employment contract The fixed-term contract comes to an end at the expiry of the duration of the said contract. The same can be terminated before the expiry period for legitimate reasons.
29 Notification of the notice period The notice must be in writing. It must specify the grounds for contract termination. No notice is required in cases of mutual termination.
30 Damages for termination of employment contract

Unlawful termination leads to payment of damages.

The range of damages cannot be less than three months' salary or more than six months' salary. If the employee has 10 years of experience, then the damages can go up to nine months of salary and not more.

Suppose the employee is not available to receive the damages. In that case, their representatives, occupational health and safety committee members, and trade union representatives are eligible to receive it on behalf of the employee.

31 Terminal benefits for termination of the employment contract

The minimum duration of service required for the application of this Article is 12 months.

Terminal benefits cannot be less than the following:

Service Salary
5 years Two times the average salary.
5 - 10 years Three times the average salary.
10 - 15 years Four times the average salary.
15 - 20 years Five times the average salary.
20 - 25 years six times the average salary.
Over 25 years Seven times the average salary.

Terminal benefits must be paid within 7 working days of termination.

The benefits provided under this Article are also available to an employee of 6 months of service.

EOR Solution in Rwanda

EOR solutions have several benefits. And it just gets better with a tech-enriched EOR solution - like the one offered by Skuad. Its Rwanda Employer of Record (EOR) solution makes it easier and faster for businesses to expand into Bermuda. It ensures smooth and quick processing of payroll and other employment responsibilities without any entity establishment. Contact Skuad to learn more.

Entitlement Explanation
Minimum duration of service The validity of a work permit is one year, and the same can be counted as the minimum duration of service.
Currency accepted Rwandan Franc (RWF) is the accepted currency.
Required details and documents
  • Color passport photo
  • Completed application form
  • Application letter
  • Curriculum vitae (CV)
  • Employment contract
  • Business registration certificate
  • Trading license
  • Notarized degree and diploma
  • Police clearance
  • Copy of green card

Outsourcing Employment Through an Employer of Record

Outsourcing is an integral part of any business activity. Employers of Record can hire and manage your local employees, handle all local issues, take care of mandatory compliances, and eliminate all your employment-related risks. Besides, EOR service providers can arrange work permits and business visas for your expatriate personnel. Skuad's integrated HR platform, a global network in more than 150 countries, and skilled industry experts can provide bespoke EOR solutions for your expansion efforts in Rwanda. Visa and work permit requirements are the hurdles here. With Skuad's international network, the said issues are solved.

Types of Visas in Rwanda

Rwanda is a member of the East African Community, an intergovernmental organization. The visa policy of Rwanda requires individuals to obtain a visa for entry into the said country. However, visa-exempt countries are an exception. Further, six months of passport validity with one empty page is a prerequisite for obtaining visas in Rwanda.

Types of Visa Explanation
Entry Visa A foreigner who wants to visit Rwanda for purposes other than a visit, holiday, sightseeing, or recreation.
Crew Pass Exclusively for crew members. It is valid only for 72 hours.
Visitors Pass This is issued to a citizen of the East African Community.
Tourist Visa Under this category there are 12 classes of visas and the same are listed below:
  • T1 - Tourist
  • T2 - Tourist
  • T3 - Family
  • T4 - Visiting diplomat
  • T5 - Job search
  • T7 - Business
  • T8 - Medical treatment
  • T9 - Group tourist
  • T10 - Itinerant business person
  • T11 - Bridging
  • T12 - East Africa tourist visa
Temporary Resident Permits This permit can be applied only when you enter Rwanda. The duration for application is 15 days.
Dependent Pass This visa is issued to dependents in the family.
Student Pass As the name suggests, this visa is issued to students.

Work Permits

To work in Rwanda, you must hold a work permit in addition to your visa. Several classes of visas and work permits are made available in Rwanda, but it is mostly classified into two particular permits: temporary permits and permanent permits. Skuad, by all means, can assist you in this. Some crucial bits of information are tabulated below:

Work Permits Explanation
Can Skuad Sponsor Work Permit in Rwanda? Yes
Processing Time 2 Weeks
Work Permit Process The process for obtaining Rwanda’s work permit requires an application to be made in the first place by the applicant. The peculiarity lies in the documents required for such a process. Documentation of the below-mentioned particulars sums up the process for obtaining a work permit:
  • Color passport photo
  • Completed application form
  • Application letter
  • Curriculum vitae (CV)
  • Employment contract
  • Business registration certificate
  • Trading license
  • Notarized degree and diploma
  • Police clearance
  • Copy of green card
Passport Submission Work Permit Validity Six months before the date of departure
Work Permit Process for Different Countries For most countries, the process to obtain a work permit is the same.
When Can an Employee Travel to Rwanda? An employee with a valid passport can travel on receiving their work permits.
What’s the Cost of a Business Visa? $70
Duration of Business Visa Processing? 15 business days
Switch Business Visa to Work Permit? No
Can Spouses Work on Dependent Visas? Yes
Termination of Work Permit Section 2 titled ‘Termination Of Employment Contract And Dismissal Of Employee’ under Chapter II titled ‘Employment Contract, Apprenticeship And Internship Contracts’ of the Law regulating Labour in Rwanda deals with the intricacies of termination of service.
Special Requirements for Work Permit Cancellation Not in particular

Things You Must Know to Set Up Payroll in Rwanda

Rwanda follows a 'Pay As You Earn (PAYE)' system, and as a result, the employees are made to pay personal income taxes all around the year. Interestingly, Rwanda offers various payroll options, namely: Remote; Internal; Rwanda payroll processing company; and Rwanda payroll outsourcing. An insight into the tax policy of Rwanda will make you appreciate the solutions offered by Skuad.

Taxes in Rwanda

Tax Explanation
Annual Taxable Income

From 0 to 360.000 - 0%

From 360.001 to 1.200.000 - 20%

More than 1.200.001 - 30%

Standard Corporate Income Tax 30%
Sales Tax 18%
VAT 18%
Tax Returns Yes
Financial Year End Date June 30
Occupational Hazards Fund

Employers - 2%

Employees - 2%

Mother’s Insurance Fund

Employers - 0.3%

Employees - 0.3%

National Pension Fund

Employers - 5%

Employees - 3%

Incorporation: How to Set Up a Subsidiary in Rwanda

If you are certain about setting up a subsidiary in Rwanda, you have the option to form one of these entities: public limited company, limited liability company (LLC), and representative company. The typical choice for subsidiaries is a limited liability company. The following steps are necessary for setting up a subsidiary in Rwanda:

  1. The first step in this direction will require you to register your company with a copy of your passport.
  2. You must prepare the Memorandum of Association and Articles of Association of your company and submit two copies to the Registrar of Companies.
  3. The third step is to deposit your share capital or paid-up capital - approximately $850, in the country's bank.
  4. The fourth step involves the problematic aspects of tax payment and filing of accounts with the Registrar of Companies. You will be required to go through your accounts if you make more than 400 million Rwandan francs per year.

Relax. You need not worry about any of the formalities involved if you join hands with Skuad.

Conclusion

Business is becoming increasingly global and competitive, forcing companies to scout for opportunities in countries worldwide. With its natural resources and economic reforms, Rwanda is emerging as an attractive investment destination. With Skuad as your partner, you can easily and quickly expand your business in Rwanda. Your idea of business expansion can get better and bigger with Skuad's unique tech-enriched solution system. Skuad's EOR solution will help minimize the complexity and cost of doing business in Rwanda. Adding on, it adds flavors to a business enterprise by establishing chains between local entities and foreign entities. Connect with Skuad Experts to know more about tailor-made solutions designed to cater to your business requirements.

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