Analysis and Guidance Report for Property Investment in Cape Verde: A Comprehensive Guide for Foreign Investors

Executive Summary

Cape Verde's property market presents itself as an attractive destination for foreign investment, underpinned by a remarkably stable political and economic environment and a legal framework that actively encourages the entry of foreign capital. Analyses show that non-resident investors enjoy property rights equivalent to those of nationals, with no significant restrictions on the acquisition of a wide range of properties, including residential, commercial and development land. Foreign exchange legislation, in particular, has evolved towards complete liberalisation, which facilitates the movement of capital and increases confidence in the market.  

One of the most distinctive and advantageous elements is the existence of a permanent residency programme, known as a “Green Card”, which can be obtained through an affordable property investment. However, in order to successfully navigate this market, it is imperative that the investor adopts a strategy of rigorous legal and financial due diligence. Hiring a local lawyer is considered an essential step to mitigate risks, such as fraud, and ensure compliance with new and increasingly formal regulations, especially in the short-term rental sector. This report aims to provide a detailed and in-depth guide to making an informed decision.

The legal framework and ownership structure for foreigners

The solidity of Cape Verde's legal system is the cornerstone of its attractiveness to international investors. The country operates under a legal system based on Portuguese civil law, recognised for its transparency and regulatory clarity. This system gives foreigners the same property rights as local citizens, which means that there are no obstacles to acquiring property or land for various purposes, whether for personal use, development or investment. The right to private property, as legislated, guarantees the owner full power to use, enjoy and dispose of their assets, consolidating long-term investment security.  

The Cape Verdean government doesn't just allow investment; its policy is to actively encourage its entry into the market. A clear example of this proactive approach is the revision of foreign exchange legislation. This reform aims to “completely liberalise operations with foreign countries,” eliminating restrictions and the need for prior authorisations from the Bank of Cape Verde to move capital. This flow of capital is a direct incentive designed to strengthen the country's competitiveness and position it as a destination of choice for tourist property investment.  

The combination of legal parity, legal certainty and the liberalisation of the capital market reveals a cohesive, long-term government strategy. The creation of a differentiated status for investors, such as the “Green Card”, demonstrates the commitment to attracting global citizens looking for a second home. The decision to facilitate property investment is intrinsically linked to the vision of boosting the economy, strengthening the construction sector and creating jobs. Investors can therefore interpret the regulatory framework as a strategic ally, designed to protect and promote their capital, rather than impose barriers.  

Property acquisition process: step-by-step

The process of buying a property in Cape Verde, although encouraged to be straightforward, requires a clear roadmap and the observance of critical steps to guarantee the security of the transaction. The islands of Sal, Boa Vista and São Vicente are often the first to be explored by international buyers, who find a wide range of options, from flats to villas and plots of land.  

The buying process begins with the selection of the property, followed by the signing of a reservation contract and the payment of a deposit to take the property off the market. The most crucial stage is hiring a local lawyer, a “highly recommended” practice for foreign investors. This professional is essential for carrying out the due diligence, The process is a meticulous verification process that includes confirming ownership of the property and analysing whether there are any liens or encumbrances, such as mortgages or pledges. The necessary documentation, such as the Property Identification Certificate (CIP), is obtained by the lawyer to ensure that the property is free of any outstanding issues.  

Once the due diligence has been completed, the process moves on to formalisation. The buyer must obtain a Tax Identification Number (NIF). This is followed by the signing of the Promissory Contract of Purchase and Sale, with an initial deposit of 10-30% of the property's value. The transaction is finalised with the signing of the Public deed before a notary, where the remaining balance is paid. Finally, the property must be officially registered in the Land Registry to validate legal ownership and protect it from third parties. The existence of a “Movable Property Guarantee Registration System” and the availability of online services for certificates underline the government's modernisation efforts, which, with the support of a lawyer, turn bureaucracy into a secure process. The role of the lawyer goes beyond a formality, acting as an element of protection and compliance for the investor.  

Analysing transaction costs and taxes

Analysing the costs associated with buying a property in Cape Verde is essential for accurate financial planning. Additional expenses, which include taxes and fees, can add up to approximately 6% of the property's purchase price. The main charges are the Single Property Tax (IUP) and Stamp Duty.  

The Single Property Tax (IUP) is the main acquisition tax, calculated at a rate of 1.5% on the purchase price. The rules for its application are defined by the Single Property Tax Regulation. In addition, Stamp Duty (IS) is levied on the transfer of immovable property and is regulated by Law 33/VII/2008. Although the specific rates are not detailed in the documents consulted , The legislation provides for exemptions for certain situations, such as the use of mortgage credit up to a specific limit. It is important to note that tax information in Cape Verde may not be as easily publicly accessible as in other countries, such as Portugal, with which overlapping legislation can lead to confusion.  

In addition to acquisition taxes, the IUP is also a recurring charge on the value of the property, and other maintenance costs can include condominium or property management fees. The dispersion and relative scarcity of details on tax aspects in the public space, such as the lack of a complete Stamp Duty table , This reinforces the need for a specialised local consultant. The added value of a lawyer or accountant in mitigating risks and ensuring tax and legal compliance far outweighs the initial cost.  

Residence programmes and investment visas

One of Cape Verde's most competitive value propositions for foreign investors is the ease with which they can obtain residency. The island nation, through the relevant legislation, offers a differentiated status for investors, which translates into the granting of a “Green Card”. This title confers permanent residence in the country, with the aim of promoting the economy and, in particular, the tourist property sector.  

The requirements for obtaining a Green Card are explicitly defined. An investment in tourist property, whether built or under construction, of €80,000 or more is required for municipalities with a Gross Domestic Product (GDP) per capita below the national average. For municipalities with a GDP per capita equal to or greater than the national average, the minimum amount rises to €120,000. It is crucial that the investment is made with funds transferred from abroad. The documentation required includes a valid passport, a criminal record certificate from the country of origin, a medical certificate, proof of purchase of the property and a statement from the financial institution attesting to the transfer of capital.  

The investment amount for the “Green Card” is remarkably low when compared to similar programmes in other countries. It is important to clarify a discrepancy found in one source, which mentions an investment value of 8.8 million euros. short stories. This figure, which is equivalent to more than 8.8 billion of escudos, is a blatant contradiction with the official legislation that establishes a minimum value of €80,000. The error is almost certainly a typo or transcription error. The real, affordable and legally established value gives Cape Verde a considerable competitive advantage over other countries' residence permit programmes for investment, such as Portugal's, which no longer includes the purchase of real estate as an access route for new applicants.  

The property market: opportunities and dynamics

The Cape Verdean property market is booming, driven by steady tourism growth and a stable political and economic environment. The main islands for investment, such as Sal, Boa Vista and São Vicente, are the driving forces behind this growth. The island of Sal, with its international airport and the dynamic seaside resort of Santa Maria, is a centre of attraction. The property offer is diverse, with flats in tourist areas starting at €70,000 and beachfront villas that can exceed €500,000, depending on the location. It is crucial to exercise caution when searching, as the values may be shown in different currencies (Euros, Dollars, Escudos) and the search may generate results from other locations with the same name, such as the city of São Vicente in Brazil.  

One of the biggest attractions for investors is the potential profitability of short-term rentals. The growth in tourism and the limited supply of accommodation create a highly profitable market. Estimates of gross annual return vary between 8% and 12%, with one-bedroom flats near the beach generating between €50-80 per night, and luxury villas with pools achieving returns of €200-400 per night.  

However, the government has acted to formalise this sector. The introduction of new legislation (Decree-Law no. 56/2024) requires compulsory licensing and online registration for local accommodation such as flats and villas. The law imposes a limit of 90 consecutive days per stay and prohibits the operation of properties that resemble traditional tourist resorts. The government wants to combat informality and ensure fair competition in the tourism market. The profitability of the investment, therefore, is now intrinsically linked to compliance with these new rules. The acquisition of a property for short-term rental is effectively the acquisition of a tourism business that requires professional management and full knowledge of the regulatory framework in force.  
Check out what Decree-Law no. 56/2024 says here:

Risks, challenges and strategic recommendations

Although Cape Verde's property market is promising, the prudent investor should be aware of the inherent risks and challenges. The main risk is fraud, which can occur if due legal diligence is neglected. Buying a property with outstanding issues, such as undeclared encumbrances or charges, can result in significant losses. Hiring a local lawyer is the main measure to mitigate this danger, ensuring that all title checks and building licences are carried out before the transaction.  

Financial risk is also a consideration, given the difficulty for foreigners to obtain credit in Cape Verde and the need to have equity. Market volatility, although currently favourable, requires robust financial planning and cautious trend analysis. Finally, regulatory risk is increasingly relevant, with the introduction of new laws that directly impact profitability, especially for the local accommodation sector.  

The analysis shows a clear direction from the Cape Verdean government towards the formalisation and modernisation of the real estate market. The coexistence of a formal legal system and digital initiatives with a historically informal market means that long-term investment success depends on strict adherence to the legal framework. Operating outside the new local accommodation regulations or failing to carry out thorough due diligence can negate the perception of a “simple process” and lead to financial losses. Investment security does not lie in informality, but in strict adherence to increasingly well-defined processes and regulations.

With this report, S&D Consultoria concludes that, despite the opportunities, investment in Cape Verde requires a commitment to compliance and professionalism.