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Sao Tome and Principe

Executive Summary

São Tomé and Príncipe (STP) is a stable, multi-party democracy. It is a developing country with a Gross Domestic Product (GDP) of roughly USD $427.4 million and a population of 215,048 (World Bank, 2019 estimate). Due to STP’s very limited revenue sources, foreign donors finance roughly 90 percent or more of its public investment budget. For the 2021 budget, these donors were China, Japan, Portugal, the World Bank, European Union, the UN Food and Agriculture Organization (FAO), the African Development Bank, and the Arab Bank for Economic Development (BADEA.)

STP has taken positive steps over the last decade to improve its investment climate and to make the country a more attractive destination for foreign direct investment (FDI), including by working to combat corruption and create an open and transparent business environment. In 2021, VISA cards were introduced in the country. To improve the appeal of tourism during the pandemic, the Tourism Directorate launched its “Seal of Clean” Program in 2021. The Value Added Tax (VAT) Law (13/2019) enacted in 2019 to facilitate tax collection and enforcement of the tax code is scheduled for adoption. A modern Labor Code (6/2019) came into force in 2019 to make it easier for investors to understand and abide by the labor standards. In June 2019, STP also became the 25th African country to ratify the African Continental Free Trade Agreement (AfCFTA). In 2018, it passed its Public-Private Partnership (PPP) Law, Notary Code, and Commercial Register Code. The Regulation of Investment Code was adopted in 2017 and the Investment Code and Code of Fiscal Benefits and Incentives were previously adopted in 2016. The 2013 anti-money laundering and counter-terrorist financing law brought STP into compliance with international standards. A Millennium Challenge Corporation Country Threshold Program, completed in 2011, modernized STP’s customs administration, reformed its tax policies, and made it less burdensome to start a new business. Together, these efforts helped to develop a modern and transparent legal framework for foreign investment. Due to its reliance on outside investment, STP remains committed to improving its investment climate.

The government continues to work with the business community to develop the country economically and to improve basic social services for the country’s young and growing population. In 2018, it approved a four-year program to promote “robust economic growth” focused on the provision of services, including tourism, the financial sector, technology, logistics, and health services associated with the digital economy. Special attention is also being given to traditional sectors, mainly agriculture, livestock, and marine resources. STP’s extensive maritime domain (160,000 km2) may hold opportunities for hydrocarbon production as technology improves. In cooperation with China, STP is seeking to modernize its port infrastructure and capitalize on its fishing potential. In 2020, China also announced funding for airport rehabilitation and upgrades. STP is using Word Bank funding to rehabilitate the road linking the capital to the north of the island. However, foreign investors continue to face challenges identifying viable investment opportunities due to STP’s small and fragile domestic market, inadequate infrastructure, slow moving justice system, high cost of credit, and limited access and expensive electricity.

Prime Minister Jorge Bom Jesus is focused on fighting corruption, improving the business environment, attracting Foreign Direct Investment (FDI), and promoting economic growth. In his inaugural address in 2021, President Carlos Vila Nova expressed support for protecting the environment and investments. The President also welcomed U.S. cooperation.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 66 of 180
Global Innovation Index  2021 N/A
U.S. FDI in partner country ($M USD, stock positions) 2020 $21
World Bank GNI per capita 2020 $2,060

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

8. Responsible Business Conduct

There are no rules or legislation pertaining to responsible business conduct (RBC) in STP. Companies generally act in accordance with laws pertaining to investment, labor, environment, flora and fauna protection, consumer protection, and taxation. There is limited awareness of expectations of or standards for responsible business conduct. STP participates in the Extractive Industries Transparency Initiative (EITI). Companies usually respect human and labor rights. On occasion, civil society and NGOs speak up against businesses’ inappropriate conduct, especially as regards environmental destruction. In 2018, a group of civil society organizations and a political party contested the government’s decision to lease a large piece of land in the north of São Tomé to a Chinese business group for the establishment of a quarry. The land was part of a natural park with many preserved species of plants, animals and birds. 

9. Corruption

Although STP has taken steps to combat corruption through government reforms the country ranked 66 out 180 countries in Transparency International’s 2021 Corruption Perception Index, dropping one position compared to the previous year. The government passed an anti-corruption law in 2012 that required all payments to government entities over USD $5 be made directly at the BCSTP and all salary payments to civil servants be paid directly to the employee’s bank account. The government has also taken steps to review and update existing contracts with some foreign companies to support liberalization and free market competition. The government has denounced corruption and pledged to take necessary steps to prevent and combat it.

Although the government has been taken these steps, in March 2022, President Vila Nova cited a study showing seven out of 10 Santomeans still believed corruption was increasing.

Although corruption in customs was historically an issue for foreign investors, the MCC Threshold Program did help establish a modern customs code and related decrees by introducing modern customs tracking software and eliminating manual procedures, with customs agents handling payments for the importer. As a result, customs revenues have increased significantly. while incidents of corruption have reportedly declined.

In 2013, the parliament adopted an amended anti-money laundering/counter-terrorist financing (AML/CFT) law that complies with international standards. It designates the Financial Information Unit (Unidade de Informação Financeira) as the central agency in STP with responsibility for investigating suspect transactions. STP is a member of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), a FATF-style regional body.

According to the 2016 Investment Code, all investment proposals must be submitted to the APCI, which is responsible for carrying out all legal inter-institutional coordination with different sectors involved in the analysis and approval of the investment project. The law limits contacts between investment proponents and officials involved in the investment approval process.

STP signed and ratified the UN Anticorruption Convention. It is not party to the Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

STP does not have a designated agency responsible for combatting corruption but in March 2022, the President promised to create an “Anti-Corruption Committee” comprised of reputable citizens, and uncommitted to any political agenda.

10. Political and Security Environment

STP is relatively stable, has no ethnic tensions, and has a relaxed lifestyle, which locals refer to as leve-leve (“take it easy”). Since its democratic reforms in 1990, the archipelago has been a good example of democracy in the sub-region with a history of peaceful transfers of power and consensus in decision-making. In July 2021, following the results of the first round of the presidential elections, the third ranked candidate contested the election’s results, alleging massive fraud. After back-and-forth decisions from the Constitutional Court there was a delay in the holding of the second round of the presidential election. Ultimately, the second round took place and observers announced that they found it to be free, fair, and transparent. The President took office in 2021 without incident. There were some protests in 2018 over the creation of the Constitutional Court, and a lower court decision to recount the votes of the October 7 legislative, local, and regional elections. Despite the post-election protests, the legislative elections led to the peaceful formation of a new coalition Government. STP generally has a good human rights record and demonstrates a respect for citizens’ and workers’ rights. Strikes are not seen as the primary means to settle labor disputes and labor strikes have been sporadic in recent times.

Since independence in 1975, there have been no incidents of politically motivated attacks on projects or installations. There is no anti-American sentiment and instances of civil disorder are rare. Recently maritime piracy has affected STP’s territorial waters in the Gulf of Guinea, though the threat of terrorism remains limited. STP has sought to be an active partner in regional maritime security efforts, although its capacity and resources are minimal. Despite two violent murders in early 2020, violent crime rates are at a historical low.

11. Labor Policies and Practices

A significant portion of STP’s workforce is young, relatively well-educated, and multilingual (Portuguese and French). Further training of the workforce is needed, however, for the economy to continue developing. The percentage of foreign/migrant workers is low but covered by the new Labor Code (Law 6/2019). The government does not officially require but encourages companies to hire nationals. In March 2022, after negotiations with the labor unions, the government announced that the monthly minimum wage for civil servant will increase from USD $50 to USD $112 as of May, with an expected increase to USD $157 in 2023 and USD $202 in 2024. The unions also announced a leave allowance payment of 40 percent as of May and 100 percent by 2023, retroactive from January. For the first time in 2016, the government set the national minimum wage for private and public sectors. The basic salary varies by the size of the enterprise. For micro enterprises or family businesses, the minimum wage is around STN 800 ($38.80) per month, small business STN 1,000 ($48.50), medium enterprise STN 1,300 ($63.10) and large enterprise STN 1,600 ($77.70). The basic salary for the public sector is approximately STN 1,100 ($50). Women are entitled to state-funded maternity leave for a period of 14 weeks, including 8 weeks after childbirth. The law recognizes the right of workers to form and join independent unions, conduct legal strikes (though this is strictly regulated), and bargain collectively. The law does not prohibit anti-union discrimination or retaliation against strikers. Workers’ collective bargaining agreements remain relatively weak due to the government’s role as the principal employer and key interlocutor in labor matters, including wages. Special tax incentives are provided under the Fiscal Benefit Code to companies that provide training to its human resources. Labor disputes are usually solved through dialogue between parties, under mediation of the General Labor Inspection Department (IGT), or through litigation if a consensus cannot be reached. The Labor Law was drafted in collaboration with the ILO. The IGT is housed under the Labor Ministry.

STP’s private sector is underdeveloped, undiversified and dominated by a large number of informal operators who work mainly in civil construction, agriculture, commerce and fisheries, with a low level of education, lack of organizational and managerial skills, absence of structured accounting systems, as well as minimal business planning procedures in the medium/long term. However, the informal sector makes a substantial contribution to the economy through its dynamism, entrepreneurial culture, innovation and flexibility to adjust to changes in the environment. Thus, it still has the potential to eventually develop into a part of the more mainstream private sector in the coming years.

The World Bank 2020 Doing Business Report ranked STP 185 among 190 economies in terms of contract enforcement. Although some reforms are ongoing, the county’s justice system is still seen as slow moving, costly, and biased at times. Therefore, it is still very important to know the given local partner or individual who you are doing business with. Further, it is always advisable to confirm the true ownership of any asset before its acquisition, especially when involving land.

According to a government official, there are a total of 11,000 civil servants, more than half the country’s labor force. The World Bank estimated STP’s 2020 total labor force to be about 68,000; among the total number, roughly 35,000 are female between the ages of 15-64 years old. 

14. Contact for More Information

Frank W. Stanley
Economic Chief
U.S. Embassy Libreville

Saudi Arabia

Executive Summary

In 2021, the Saudi Arabian government (SAG) continued its ambitious socio-economic reforms, collectively known as Vision 2030. Spearheaded by Crown Prince Mohammed bin Salman, Vision 2030 provides a roadmap for the development of new economic sectors and a transition to a digital, knowledge-based economy. The reforms aim to diversify the Saudi economy away from oil and create more private sector jobs for a young and growing population.

To accomplish these ambitious Vision 2030 reforms, the SAG is seeking foreign investment in burgeoning sectors such as infrastructure, tourism, entertainment, and renewable energy. Saudi Arabia aims to become a major transport and logistics hub linking Asia, Europe, and Africa. Infrastructure projects related to this goal include various “economic cities” and special economic zones, which will serve as hubs for petrochemicals, mining, logistics, manufacturing, and digital industries. The SAG plans to double the size of Riyadh city and welcomes investment in its multi-billion-dollar giga-projects (including NEOM, Qiddiya, the Red Sea Project, and Amaala), which are the jumping-off points for its nascent tourism industry. The Kingdom is also developing tourism infrastructure at natural sites, such as AlUla, and the SAG continues to grow its successful Saudi Seasons initiative, which hosts tourism and cultural events throughout the country.

The Saudi entertainment and sports sector, aided by a relaxation of social restrictions, is also primed for foreign investment. The country hopes to build hundreds of movie theaters and the SAG aims to sign agreements for production studios in Saudi Arabia for end-to-end film production. The SAG seeks to host world class sporting events and has already hosted the European Golf Tour, Diriyah ePrix, Dakar Rally, and Saudi Formula One Grand Prix. In addition, recent film festivals and concerts have demonstrated strong demand for art and cultural events. Lastly, the SAG is eager for foreign investment in green projects related to renewable energy, hydrogen, waste management, and carbon capture to reach net-zero emissions by 2060. It is particularly interested in green capacity-building and technology-sharing initiatives.

Despite these investment opportunities, investor concerns persist regarding business predictability, transparency, and political risk. Although some activists have recently been released, the continued detention and prosecution of activists remains a significant concern, while there has been little progress on fundamental freedoms of speech and religion. The pressure to generate non-oil revenue and provide increased employment opportunities for Saudi citizens has prompted the SAG to implement measures that may weaken the country’s investment climate going forward. Increased fees for expatriate workers and their dependents, as well as “Saudization” policies requiring certain businesses to employ a quota of Saudi workers, have led to disruptions in some private sector activities. Additionally, while specific details have not yet been released, Saudi Arabia announced in 2021 that multinational companies wanting to contract with the SAG must establish their regional headquarters in Saudi Arabia by 2024.

The SAG has taken important steps since 2018 to improve intellectual property rights (IPR) protection, enforcement, and awareness. While some concerns remain regarding IPR protection in the pharmaceutical sector, no new incidents related to regulatory data protection for health and safety information have been reported since October 2020, and in March 2022 Saudi Arabia issued a public statement stipulating that data protection in the Kingdom is for five years. While the sharp downturn in oil prices in 2020 put pressure on Saudi Arabia’s fiscal situation, the subsequent spike in oil prices has increased government revenue and the SAG expects a budget surplus in 2022.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 52 of 180
Global Innovation Index 2021 66 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $11,386
World Bank GNI per capita 2020 $21,930


1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

SOEs play a leading role in the Saudi economy, particularly in water, power, oil, natural gas, petrochemicals, and transportation. Saudi Aramco, the world’s largest exporter of crude oil and a large-scale oil refiner and producer of natural gas, is 94.5 percent SAG-owned, and its revenues typically contribute the majority of the SAG’s budget. Four of the eleven representatives on Aramco’s board of directors are from the SAG, including the chairman, who serves concurrently as the Managing Director of the PIF. In December 2019, the Kingdom fulfilled its long-standing promise to publicly list shares of Saudi Aramco. The initial public offering (IPO) of 1.5 percent of Aramco’s shares on the Saudi Tadawul stock market on December 11, 2019, was the largest-ever IPO and valued Aramco at $1.7 trillion. The IPO generated $25.6 billion in proceeds, exceeding the $25 billion Alibaba raised in 2014 in the largest previous IPO in history. In February 2022, the SAG announced the transfer of four percent of Aramco’s shares to the PIF. Crown Prince Mohammed bin Salman announced that after the transfer, the state will remain Aramco’s largest shareholder, retaining more than 94 percent of the total shares.

In March 2019, Saudi Aramco signed a share purchase agreement to acquire 70 percent of SABIC, Saudi Arabia’s leading petrochemical company and the fourth largest in the world, from the PIF in a transaction worth $69.1 billion; the acquisition was completed in 2020. Five of the nine representatives on SABIC’s board of directors are from the SAG, including the chairman and vice chairman. The SAG is similarly well-represented in the leadership of other SOEs. The SAG either wholly owns or holds controlling shares in many other major Saudi companies, such as the Saudi Electricity Company, Saudia Airlines, the Saline Water Conversion Company, Ma’aden, the National Commercial Bank, and other leading financial institutions.

8. Responsible Business Conduct

There is a growing awareness of corporate social responsibility (CSR) in Saudi Arabia. The King Khalid Foundation issues annual “responsible competitiveness” awards to companies doing business in Saudi Arabia for outstanding CSR activities. In March 2021, the SAG approved the formation of a committee on corporate social responsibility in the Ministry of Human Resources and Social Development.

Saudi Arabia does not participate in the Extractive Industries Transparency Initiative.

9. Corruption

In December 2019, King Salman issued royal decrees creating the Oversight and Anti-Corruption Commission (“Nazaha”). Nazaha is responsible for promoting transparency and combating all forms of financial and administrative corruption. Nazaha reports directly to King Salman and has the power to dismiss a government employee even if found not guilty by the specialized anti-corruption court. Throughout 2021, Nazaha published monthly press releases detailing its arrests and investigations, often including high-ranking officials, such as generals and judges, from every ministry in the SAG. The releases are available on the Nazaha website at .

Foreign firms have identified corruption as a barrier to investment in Saudi Arabia. Saudi Arabia has a relatively comprehensive legal framework that addresses corruption, but many firms perceive enforcement as selective. The Combating Bribery Law and the Civil Service Law, the two primary Saudi laws that address corruption, provide for criminal penalties in cases of official corruption. Government employees who are found guilty of accepting bribes face 10 years in prison or fines up to US$267,000. Ministers and other senior government officials appointed by royal decree are forbidden from engaging in business activities with their ministry or organization. Saudi corruption laws cover most methods of bribery and abuse of authority for personal interest, and in December 2021 Saudi Arabia amended the Combating Bribery Law to criminalize foreign bribery. Only senior Nazaha officials are subject to financial disclosure laws. The government is considering disclosure regulations for other officials but has yet to finalize them.

SAMA oversees a strict regime to combat money laundering. Saudi Arabia’s Anti-Money Laundering Law provides for sentences up to 10 years in prison and fines up to $1.3 million. The Basic Law of Governance contains provisions on proper management of state assets and authorizes audits and investigations of administrative and financial malfeasance.

The Government Tenders and Procurement Law regulates public procurements, which are often a source of corruption. The law provides for public announcement of tenders and guidelines for the award of public contracts. Saudi Arabia is an observer of the WTO Agreement on Government Procurement (GPA).

Saudi Arabia ratified the UN Convention against Corruption in April 2013 and signed the G20 Anti-Corruption Action Plan in November 2010. Saudi Arabia was admitted to the OECD Working Group on Bribery in February 2021, and the International Anti-Corruption Academy (IACA) elected Saudi Arabia to its Board of Governors in April 2022.

The Kingdom ranks 52 out of 180 countries in Transparency International’s Corruption Perceptions Index 2021.

10. Political and Security Environment

The Department of State regularly reviews and updates travel advisories to apprise U.S. citizens of the security situation in Saudi Arabia and frequently reminds U.S. citizens of recommended security precautions. Please visit  for further information, including the latest travel advisory.

11. Labor Policies and Practices

The Ministry of Human Resources and Social Development (MHRSD) sets labor policy and, along with the Ministry of Interior, regulates recruitment and employment of expatriate labor, which makes up a majority of the private sector workforce. About 76 percent of jobs in the country are held by expatriates, who represent roughly 38 percent of the total population. The largest groups of foreign workers come from India, Pakistan, Bangladesh, Egypt, the Philippines, and Yemen. Saudis occupy about 93 percent of government jobs, but only about 24 percent of the total jobs in the Kingdom. Roughly 46 percent of employed Saudi nationals work in the public sector.

The removal of guardianship laws and travel restrictions for women, the introduction of workplace protections, and recent judicial reforms that provide additional protection have enabled more women to enter the labor force. From 2016 to 2020, the Saudi female labor participation rate increased from 19 percent to 33 percent. As of Q4 2021, Saudi Arabia’s General Authority for Statistics estimates unemployment at 6.9 percent for the total population and 11 percent for Saudi nationals, but these figures mask a high youth unemployment rate, a Saudi female unemployment rate of 22.5 percent, and low Saudi labor participation rates (51.5 percent overall; 35.6 percent for women). With approximately 60 percent of the Saudi population under the age of 35, job creation for new Saudi labor market entrants will remain a challenge.

The SAG encourages Saudi employment through “Saudization” policies that place quotas on employment of Saudi nationals in certain sectors, coupled with limits on the number of visas for foreign workers available to companies. In 2011, the Ministry of Labor and Social Development (the forerunner of MHRSD) laid out a sophisticated plan known as Nitaqat, under which companies are divided into categories, each with a different set of quotas for Saudi employment based on company size.

The SAG has taken additional measures to strengthen the Nitaqat program and expand the scope of Saudization. The MHRSD has mandated that certain job categories in specific economic sectors only employ Saudi nationals. The ministry has likewise mandated that only Saudi women can occupy retail jobs in certain businesses that cater to female customers. Many elements of Saudization and Nitaqat have garnered criticism from the private sector, but the SAG claims these policies have substantially increased the percentage of Saudi nationals working in the private sector over the last several years and has indicated that there is flexibility in implementation for special cases.

Saudi Arabia’s labor laws forbid union activity, strikes, and collective bargaining. However, the government allows companies that employ more than 100 Saudis to form “labor committees” to discuss work conditions and grievances with management. In 2015, the SAG published 38 amendments to the existing labor law with the aim of expanding Saudi employees’ rights and benefits. In March 2021, MHRSD implemented its Labor Reform Initiative (LRI), which allows foreign workers greater job mobility and freedom to exit Saudi Arabia without the need for the employer’s permission. Domestic workers are not covered under the provisions of either the 2015 regulations or the LRI; separate regulations covering domestic workers were issued in 2013, stipulating employers provide at least nine hours of rest per day, one day off a week, and one month of paid vacation every two years.

Saudi Arabia has taken significant steps to address labor abuses, but weak enforcement continues to result in credible reports of employer violations of foreign employee labor rights. Foreign workers (particularly domestic staff) have encountered employer practices, including passport withholding and non-payment of wages, that constitute trafficking in persons. The Department’s annual Trafficking in Persons Report details concerns about labor law enforcement within Saudi Arabia’s sponsorship system. It is available at

Overtime work is normally compensated at time-and-a-half rates. The minimum age for employment is 14. The SAG does not adhere to the International Labor Organization’s convention on protecting workers’ rights. Non-Saudis have the right to appeal to specialized committees in the MHRSD regarding wage non-payment and other issues. Penalties issued by the ministry include banning infringing employers from recruiting foreign and/or domestic workers for a minimum of five years.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2020 $700,118  2020 $700,118
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A 2020 $11,386 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2020 $6,262 BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A 2020 34.5% UNCTAD data available at

* Source for Host Country Data: Saudi General Authority for Statistics   

According to the UNCTAD World Investment Report, in 2020 Saudi Arabia’s total FDI inward stock was $241.862 billion and total FDI outward stock was $128.759 billion.

Detailed data for inward direct investment (below) is as of 2010, which is the latest available breakdown of inward FDI by country.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $169,206 100% Total Outward N/A N/A
Kuwait $16,761 10% Country #1 N/A N/A
France $15,918 9% Country #2 N/A N/A
Japan $13,160 8% Country #3 N/A N/A
United Arab Emirates $12,601 7% Country #4 N/A N/A
China, P.R. $9,035 5% Country #5 N/A N/A
“0” reflects amounts rounded to +/- USD 500,000.

*Source: IMF Coordinated Direct Investment Survey (2010 – latest available complete data)

14. Contact for More Information

Economic Section and Foreign Commercial Service Offices
Embassy of the United States of America
P.O. Box 94309
Riyadh 11693, Saudi Arabia
Phone: +966 11 835-4000

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