While many people know that the minimum wage in Djibouti is among the highest in the world, some people aren’t so sure that they should consider relocating to this African country. The reason for this is that Expatriates will have to find a job before they arrive. There are several reasons for this, including the tax-free jurisdiction, the rigidity of the employment index, and the low unemployment rate.
The highest minimum wage in Africa
As part of its 2006 Labor Code, Djibouti abolished its national minimum wage. Instead, it created occupational categories, with wages set by employers and employees as part of their employment contracts. Public sector workers in the country earn 35,000 DJF per month, the equivalent of $198 per month. The minimum wage was last changed in 2015.
While the average wage in Africa is about $700 per month, there are countries in the region with higher minimum wages. For instance, in Comoros, the minimum wage is 55,000 Comorian francs a month. The latest law changes the minimum wage every four years, so it is still a fair wage even for those with low levels of education. In Djibouti, this means that if you’re an unemployed man in South Africa, you’ll need to work longer hours than an employee in South Africa.
The country has a low rate of unemployment, and many residents earn below the poverty line. But the country is also growing, as the GDP has increased by three percent per year for fifteen years. Djibouti’s position as a stable bridge between Middle Eastern and African regions makes it an important economic player. It also houses foreign military bases and aid organizations. In addition to these, the country also receives international humanitarian assistance and is home to several multinational corporations.
Expatriates must find a job before they arrive
Applicants must have a valid passport, two blank pages, and yellow fever vaccination before they can work in the country. While job opportunities are scarce in Djibouti, expatriates usually secure a job before they arrive. Employers should prepare employment contracts and ensure their foreign employees have all the necessary documents. If hiring an expatriate is not possible, employers should provide information about their company and services.
The country’s oil and gas industry is one of the largest employers of expatriates. There are opportunities in labor, administrative, and management roles. Education and foreign aid are also viable options. Although tourism is not currently active, it is expected to resume once the world economy recovers. Expatriates must find a job before they arrive in Djibouti in order to secure the position of their choice.
In addition, Djibouti is a tax-free jurisdiction, so the minimum wage there is free from social security contributions. Foreign staff is not required to pay any taxes, and some employers offer health insurance. The tax-free status extends to the minimum wage, as well. Foreign visitors are subject to strict visa policies. To enter Djibouti, you must have a valid passport and a confirmed ticket.
To obtain tax-free status in Djibouti, you must register with the country’s Tax Directorate. You must present your Personal Tax Identification Number (PTIN) to register. Then, you will need to pay taxes based on the income you earn. In addition, you must designate a representative in the tax-free country, who must be legally authorized to receive communications on your behalf. The representative will also be responsible for the general solidarity tax.
The rigidity of the employment index
The Rigidity of Employment Index (REI) is a composite measure of the rigidity of rules governing employment. It incorporates factors related to hiring and firing, working hours, and labor market regulations. It ranges from 0 to 100, with a higher value indicating more rigid regulations. The current date and the number of workers earning less than a dollar per day are used to calculate the REI.
Djibouti’s formal labor market remains dominated by the service and government sectors. While there are opportunities in logistics and construction, skills shortages remain a major challenge. Poor levels of education are a major constraint on business, and a country’s education level is below the regional average for the region. Primary school enrolment in Djibouti is only 53%, compared to 86% in Ethiopia and 96% in Rwanda. Improving education is an important policy priority for the government, and the country’s growth plans focus on accelerated development.