Malawi

The public holidays in Malawi are as follows.

1. New Year Day (January 1)
2. John Chilembwe Day (January 15)
3. Martyrs’ Day (March 3)
4. Good Friday (Friday before Easter)
5. Holy Saturday (Saturday before Easter)
6. Easter Monday (the day after Easter Sunday)
7. Labor Day (May 1)
8. Eid al-Fitr (changes every year)
9. Kamuzu Day (May 12)
10. Independence Day (July 6)
11. Mother’s Day (October 15)
12. Christmas (December 25)
13. Boxing Day (December 26)

For a skilled worker, the parties may agree to include a probationary period in the employment contract as long as its length does not exceed 12 months.

If the employee works six days a week, the number of working days is eighteen (18); if they work five days a week, it is fifteen (15).

Every three years, female employees who have worked in the public or private sector for a continuous period of at least 12 months are eligible to 90 straight days of maternity leave.

There are no statutory benefits for paternity leave in Malawi.

After completing twelve months of continuous employment, an employee is entitled to at least four weeks of paid sick time and eight weeks of unpaid time off per year. An employee receives their regular salary while on sick leave.

Workers are entitled to severance pay in the following ways upon contract termination due to redundancy or retrenchment, economic difficulties, technical, structural, or operational requirements of the business, or unjust dismissal of the employee:

• no severance pay for less than one year of service;
• two weeks’ wages for each completed year of service: first to fifth year;
• three weeks’ wages for each completed year of service: sixth to tenth year;
• four weeks’ wages for each completed year of service: eleventh year and onward

13th / 14th Month Pay: There is no statutory requirement to pay the 13th or the 14th month salary. However, people that work in higher grades are likely to receive an end of year bonus.

Types of Visas in Malawi

• Tourist Visa: This is strictly issued to those people who intend to enter Malawi for visits.
• Official Visa: This Visa is issued to a person holding either a service passport or an official passport on an official purpose/business visit to Malawi.
• Transit Visa: A transit visa is strictly issued to those people who intend to transit via Malawi within 7 days.
• Diplomatic Visa: is issued to such a person who holds a diplomatic passport for an official mission or visit to Malawi.

Malawi requires all foreigners to have a passport valid for at least six months beyond their intended departure when entering the country. Not all passport-holders will need a visa, as citizens of certain countries, such as the US and Japan, do not need a visa to enter Malawi for tourism purposes.

Individuals who do need a visa can apply for one at the Embassy of the Republic of Malawi on arrival. The country processes most visa applications within three working days. Foreigners also need a visitor’s permit (VP) or business visit (BV) that allows for short stays of 30 days or less — these documents include an option to extend the permit for up to 60 days.

Requirements to Obtain Malawi Work Visas

When applying for a Malawi visa, your employees will need their completed application and valid passport along with:

• Valid passport (Not less than six months of validity)
• Visa Application form duly filled and signed.
• Passport photos (2)
• A detailed cover letter
• Air Itinerary/ticket
• Three months latest bank statements
• Confirmed Hotel booking
• Yellow Fever Certificate (if coming from a country at risk)

After securing a visa, your employees will need a temporary employment permit (TEP) that you apply for as the employer. This is only valid for foreigners who have been offered employment by a registered organization in Malawi.

The required documents for this Malawi work permit include:

• Completed application form
• Employment contract
• Valid passport
• CV
• Advertisement for the job vacancy
• Academic qualifications

When you apply for an employee’s TEP, you will need to follow the application process outlined in the “Policy Statement and New Guidelines for The Issuance and Renewal of [Expatriate] Employment Permits.” After completing the application form, you will send it and the supporting documents to the Regional Immigration Office for processing. Then, the application goes to the TEP Approval Committee for consideration and the minister for a final decision.

You will also need to pay the applicable visa fees. These differ based on your company and organization. For example, religious institutions, non-governmental organizations, and others owe MK 120,000, while reverends, pastors, or priests personally owe MK 30,000.

You should receive a formal notification on whether the application was approved or denied. If approved, you must pay the appropriate work permit fees within 30 days of getting the notification. Keep in mind that all foreigners must wait outside of Malawi until the permit is approved, so it may be a significant amount of time before a foreigner is legally allowed to work for you. 

Temporary Employment Permit (TEP): A TEP is granted for temporary work, voluntary work, and working visits. Anyone who intends to obtain a work permit in Malawi can apply for a TEP. The cost is USD 500, and additionally, USD 100 as the processing fee.

Employment Permit (EP): Working Under Contract: An EP must be applied for by the employer organization before an employee arrives in Malawi. The purpose of an EP is to demonstrate that a specific job cannot be performed by a citizen or local in Malawi. The validity of EP is two years, and it allows unlimited travel within and outside of the country. An EP is extendable. The EP application cost is USD 2,000; it costs USD 1,000 if an employee intends to work for an NGO. Additionally, a processing fee of USD 100 is required.

Business Residence Permit (BRP): A BRP is meant for those who want to start their own business and live in Malawi. It requires investing a minimum of USD 50,000. A BRP is valid for five years and comes without any travel restriction. The cost to apply for a BRP is USD 7,500, plus a processing fee of USD 100.

Permanent Residence Permit (PRP): Those who have lived on BRPs or TEPs in Malawi for a minimum of seven consecutive years are eligible for a PRP. However, once you receive a PRP, you cannot reside outside Malawi for more than one consecutive year. PRP grants all the rights to its holder that can be enjoyed by someone with a Malawian passport except for the right to vote. The cost to apply for a PRP is USD 10,000, plus a processing fee of USD 100.

Value Added Tax (VAT)

The standard rate for VAT in Malawi is 16.5 percent. No reduced rates are available. Nevertheless, several items are exempt from VAT (machinery and financial services) while other are zero-rated (exercise books, fertilizers, motor vehicles for the transport of goods, salt).

Withholding Tax

Dividend WHT:  Dividend WHT is a final tax and is charged at 10%. The dividend is not included in the taxpayer’s taxable income, and the WHT is not deducted from the taxpayer’s tax liability.

Resident WHT Rates                                                                                                        (%)

Royalties                                                                                                                            = 20

Rents                                                                                                                                 = 20

Payment of more than MWK 60,000 per annum for any supplies to traders and institutions     = 3

Commission                                                                                                                       = 20

Payment for carriage and haulage                                                                                        = 10

Payment to contractors and subcontractors in the building and construction industries = 4

Payment for public entertainment                                                                                        = 20

Payment of more than MWK 35,000 for casual labour                                                          = 20

Tobacco sales of less than 1,200 kilograms or 10 bales sold at auction floors                         = 0

Tobacco sales of more than 1,200 kilograms or 10 bales sold at auction floors                        = 3

Tobacco sales through farmer clubs at auction floors                                                            = 0

Services                                                                                                                             = 20

Interest                                                                                                                               = 20

Fees                                                                                                                                   = 20

Winnings on betting and gambling, including lotteries                                                          = 20

Non-resident tax (WHT on income due to non-residence)

Income from Malawi that is not attributable to a PE there is subject to a final WHT in the manner described below:

• 10% on income derived from a mining project as interest, royalty, payment for independent personal services, or dividend.
• 15% on all other income.

Work permits in Malawi are valid for at least six months and up to two years on the first issuance. However, employees can renew their TEP twice by submitting the TEP renewal application forms and all the supporting documents to the Regional Immigration Office. They must submit this form at least three months before the permit expires.

PS: See full Work Permit Category

A notice of termination should be submitted in the written form to the other party. The employee must be offered an opportunity to present a counterargument against termination if it is initiated by the employer. The employer is obliged to hand over a termination certificate to the employee specifying the dismissal reason.

Notice for termination of employment. The notice period depends on the frequency of the employee’s payment.

• Bi-weekly payment: If an employee has worked for the company for more than five years, the notice period is thirty days; if it has been less than five years, it is fifteen days.
• Monthly payment: One month for employees who have completed five years of service, two weeks for those who have worked for the company for between two and five years, and one week for those who have been there for less than two years.
• Daily or hourly payments: One month upon completion of employment of five or more years, one week upon completion of employment of six months to two years, fifteen days at completion of work of two to five years, and one day upon completion of employment of less than six months.

Workers are entitled to severance pay in the following ways upon contract termination due to redundancy or retrenchment, economic difficulties, technical, structural, or operational requirements of the business, or unjust dismissal of the employee:

• 1-5 years of service – 2 weeks’ pay for every year of employment
• 6-10 years – 3 weeks’ pay for every year of employment
• 11+ years – 4 weeks’ pay for every year of service

According to the legislation, these benefits are required. These consist of the probationary term, yearly leave, federal holidays, sick leave, maternity leave, overtime pay, notice period, and severance compensation. Social Security payouts are statutory benefits as well.