I am an expat: how can I invest safely in Cape Verde?

Investing in Cape Verde as an expatriate is a promising opportunity, particularly in a country that combines political stability, attractive tax incentives and a growing business environment. Strategically situated between Europe, Africa and South America, Cape Verde offers unique conditions for those wishing to diversify their investments or contribute to the development of their homeland. This guide has been created to provide clear and practical information on how to begin this process safely and efficiently.

Following the recent creation of the Investor’s Guide for the Diaspora in Cape Verde, the Cape Verdean Government reaffirms its commitment to facilitating emigrants’ access to the local market. This document, available in several languages, including Portuguese, English and French, highlights the main areas for investment, including tourism, property, the capital markets and fixed-term deposits. It also sets out the tax benefits and incentives available to those wishing to invest in the country. For further information on this guide, please visit the Portal for Cape Verdean Communities.

Cape Verdean legislation also provides for specific benefits for emigrants, such as the exemption from tax on dividends and profits arising from authorised investments and the exemption from customs duties for building materials and imported goods, as set out in the Law no. 73/IX/2020. These measures are designed not only to attract foreign capital, but also to strengthen ties between the diaspora and the country.

Furthermore, Cape Verde stands out for how easy it is to set up a business there, thanks to the programme Company on the Day (END), which allows businesses to be set up in just two days. This favourable environment is complemented by an accessible banking system, which makes it possible to open accounts in various currencies, such as euros and dollars, through a quick and simplified process.

The aim of this report is to provide guidance to expatriates interested in investing in Cape Verde, setting out a detailed step-by-step guide, from identifying opportunities to carrying out the investment. Throughout the document, topics such as the most promising sectors, the tax incentives available and local resources to support investors will be covered. Cape Verde is more than just a tourist destination; it is a country brimming with potential for those wishing to invest safely and with strategic vision.

I am an expat: how can I invest safely in Cape Verde?

1. Choosing the most suitable investment sector

Cape Verde offers investment opportunities in strategic sectors such as sustainable tourism, renewable energy, the blue economy and technology. Before investing, it is essential to assess which sector best aligns with your financial objectives and risk profile. For example:

• Sustainable tourism: It accounts for around 25% of Cape Verde’s GDP, having grown significantly in recent years. In 2023, the country welcomed over one million tourists, concentrated mainly on the islands of Sal and Boa Vista. Investing in tourism infrastructure, such as hotels and resorts, could be a promising option. (consultancy.cv)
• Renewable energies: Cape Verde aims to generate 50% of renewable energy by 2030, with incentives for projects linked to the energy transition. This sector is ideal for investors interested in sustainability and innovation. (consultancy.cv)
• Blue economy: Projects relating to sustainable fishing, aquaculture and marine conservation are on the rise, particularly due to the archipelago’s strategic location.

When choosing a sector, it is advisable to consult local experts or consultancy firms to obtain a detailed analysis of the market.

2. Tax benefits available to emigrants

Law No. 73/IX/2020 of 2 March sets out specific tax incentives for emigrants who make direct investments in Cape Verde. These benefits include:

• Exemption from IRPC tax: Dividends and distributed profits arising from authorised investments are exempt from IRPC. (portalconsular.mnec.gov.cv)
• Exemption from customs duties: Applicable to the import of materials for the construction, extension or refurbishment of dwellings, as well as furniture and household appliances.
• Tax breaks in the tourism sector: Projects classified as being of “tourist interest” may be eligible for tax exemptions, as set out in Decree-Law No. 22/2020. (consultancy.cv)

These incentives are designed to attract capital from the Cape Verdean diaspora and promote economic development. It is essential to check the legal requirements in order to benefit from these advantages.

3. Legal and administrative procedures

To invest in Cape Verde, you must complete a series of legal and administrative procedures. The main steps are set out below:

Company registration or property purchase

• Incorporation of a limited liability company (Lda): This is the most common model for foreign investors. The process involves registration at a notary’s office and at the Commercial Registry.
• Purchase of property: Cape Verde offers legal certainty when purchasing property; it is therefore essential to check the title to the property at the Land Registry.

Licences and authorisations

Depending on the investment sector, it may be necessary to obtain specific licences. For example, tourism projects must be approved by the Ministry of Tourism and classified as being of “tourism interest” in order to qualify for tax benefits.

Tax registration

All investors must register with the National Directorate of State Revenue (DNRE) to obtain a Tax Identification Number (NIF). This registration is compulsory for the payment of taxes and to access tax incentives.

Legal support

It is recommended that you engage a local solicitor to ensure compliance with laws and regulations. Many procedures can be carried out by power of attorney, making the process easier for emigrants living abroad.

4. Access to funding and partnerships

Although Cape Verde offers tax incentives, accessing finance can be a challenge. To overcome this obstacle, consider the following options:

• Local banks: Institutions such as Banco Comercial do Atlântico (BCA) and Caixa Económica de Cabo Verde offer lines of credit for business projects.
• Public-private partnerships (PPP): These partnerships are encouraged by the government, particularly in sectors such as tourism and infrastructure. (World Bank)
• International funds: Cape Verde has access to funding from institutions such as the African Development Bank (AfDB) and the World Bank, which support sustainable projects.

Before applying for funding, it is important to submit a detailed business plan, including financial projections and the economic impact.

5. Local support and networks

Investing in Cape Verde as an expat can be more effective with the support of local networks. Some initiatives and organisations that can help include:

• S&D Consultancy: Specialising in advising foreign investors, it offers services ranging from market analysis to legal support. (consultancy.cv)
• Chambers of Commerce: Local chambers of commerce, such as the Sotavento Chamber of Commerce, help to facilitate contact with local partners and suppliers.
• Consular Portal: Provides information on tax incentives and administrative procedures for emigrants. (portalconsular.mnec.gov.cv)
• Networking events: Taking part in trade fairs and conferences can help you build strategic contacts and gain a better understanding of the Cape Verdean market.

By making use of these resources, investors can minimise risks and maximise their chances of success.

I am an expat: how can I invest safely in Cape Verde?

1. Tax incentives for strategic sectors

Cape Verde offers specific tax incentives to attract investment from the diaspora in sectors considered to be priorities for the country’s economic development. These benefits go beyond the general exemptions already mentioned in previous reports, and are targeted at strategic areas such as renewable energy, the blue economy and information and communication technologies (ICT).

• Renewable energies: Investments in solar, wind and other sustainable energy projects may qualify for tax exemptions on imported equipment and reductions in Corporation Tax (IRPC). These incentives are set out in the Tax Benefits Code.
• Blue economy: Projects relating to sustainable fishing, aquaculture and marine conservation may be eligible for exemptions from customs duties and reductions in VAT on equipment and materials required for their operation.
• ICT and innovation: Technology start-ups and companies promoting digitalisation in Cape Verde can benefit from incentives such as tax exemptions on reinvested profits and access to specific funding programmes, such as the West Africa Venture Capital Fund (African Development Bank).

These incentives underpin the government’s commitment to diversifying the economy and attracting investors from the diaspora to emerging sectors.

2. Bilateral agreements and international tax benefits

For emigrants residing in countries with which Cape Verde has tax treaties, such as Portugal, France and the United States, there are agreements that prevent double taxation and facilitate the repatriation of profits. These agreements are particularly useful for investors who wish to transfer income or dividends to their countries of residence.

• Avoiding double taxation: Cape Verdean legislation ensures that investors from the diaspora are not subject to double taxation on the same income, thereby guaranteeing greater profitability for their businesses. Further information can be found at official website of the Government of Cape Verde.
• Repatriation of profits: Investors may transfer profits and dividends abroad without significant restrictions, provided they comply with the registration and documentation requirements of the National Directorate of State Revenue (DNRE).

These bilateral agreements boost emigrants’ confidence in investing in the country, by reducing tax and administrative risks.

3. Simplified procedures for accessing incentives

Although the process for obtaining tax benefits has been discussed previously, it is important to highlight the recent reforms aimed at further simplifying the procedures for investors from the diaspora. These changes include:

• Portal for Cape Verdean Communities: This digital portal, currently under development, will bring together information on tax incentives, the necessary documentation and deadlines, making it easier for emigrants to access this information remotely. (LusoJornal).
• Investor’s Handbook: A supplementary document to the investment guide, the manual provides a step-by-step guide to the administrative procedures, including tax registration, the submission of projects to the Cape Verdean Investment Promotion Agency (CI) and the obtaining of authorisations.
• Technical support: CI provides specialist advisers to guide investors through the process, cutting red tape and ensuring greater efficiency.

These initiatives reflect the government’s efforts to create a more welcoming and transparent environment for investors from the diaspora.

4. Funding and strategic partnerships

In addition to tax incentives, Cape Verde offers a range of financing options and partnership opportunities for investors from the diaspora, particularly for large-scale projects.

• Co-investment funds: In collaboration with institutions such as the African Development Bank and the World Bank, funds have been set up to enable the diaspora to participate in infrastructure, energy and transport projects. These funds share risks and returns, making them an attractive option for investors with greater financial capacity. (African Development Bank).
• Venture capital and angel investment: Cape Verdean start-ups, particularly in the technology sector, have been attracting venture capital and angel investors, who offer not only funding but also strategic guidance and access to international networks.
• Microfinance: For small investors, organisations such as the Cape Verde Microfinance Association (AMCV) offer loans on flexible terms, thereby promoting local entrepreneurship.

These financing options complement the tax incentives, providing investors from the diaspora with a diverse range of resources to bring their projects to fruition.

5. Monitoring and evaluation of investments

One area often overlooked by investors is the ongoing monitoring of their businesses in Cape Verde. The government has been promoting tools and services that help expatriates track the performance of their investments and ensure compliance with local laws.

• Periodic reports: The CI requires investors to submit regular reports on the progress of their projects, enabling an ongoing assessment of the economic and social impact.
• Tax audits: To ensure compliance with tax obligations and continued access to incentives, it is advisable to engage local audit services.
• Digital platforms: The Cape Verdean Communities Portal will include features to monitor the status of projects, tax payments and tax benefits in real time.

These measures not only increase transparency but also help investors to identify opportunities for improvement and expansion.

Tools and resources to support investment in Cape Verde

1. Digital platforms for investors

Cape Verde has invested heavily in creating digital platforms that centralise information and facilitate access to resources for investors, particularly those living abroad. These tools are designed to reduce red tape and increase transparency in the investment process.

• Portal for Cape Verdean Communities: This portal, which is currently under development, will be an essential tool for emigrants. It will centralise information on administrative procedures, tax incentives and investment opportunities. Furthermore, it will enable real-time tracking of projects submitted to the Cape Verdean Investment Promotion Agency (CI). (LusoJornal)
• Project submission platforms: CI provides digital systems for the submission of investment proposals, enabling emigrants to submit and track their applications remotely. These platforms also offer technical support to ensure that documents comply with legal requirements.

2. Technical support and specialist consultancy

To ensure that expatriate investors have access to detailed information and specialist support, Cape Verde has a number of organisations offering consultancy and technical support services.

• Cape Verdean Investment Promotion Agency (CI): CI plays a key role in supporting investors. As well as assessing the viability of submitted projects, the agency provides specialist advisers to guide emigrants through every stage of the investment process. (consultancy.cv)
• S&D Consultancy: This private company is recognised for offering bespoke services to foreign investors, including market analysis, legal advice and support with obtaining licences. (consultancy.cv)
• Local Chambers of Commerce: The Sotavento and Barlavento Chambers of Commerce are valuable resources for establishing strategic contacts and understanding the dynamics of the local market.

3. Financial resources and credit facilities

Although funding has been discussed in previous reports, this section focuses on specific resources and new developments that may benefit emigrant investors.

• Microfinance and fintech: Organisations such as the Cape Verde Microfinance Association (AMCV) offer microfinance solutions tailored to the needs of small investors. Furthermore, fintech platforms have emerged as alternatives to facilitate access to credit at competitive rates. (consultancy.cv)
• Co-investment funds: In collaboration with international institutions such as the African Development Bank, Cape Verde has set up funds that enable the sharing of risks and returns on large-scale projects, such as renewable energy and infrastructure. (African Development Bank)
• Cape Verdean Diaspora Investment Programme (PIDC): This scheme offers favourable financing terms for business projects led by emigrants, including easier access to credit and tax exemptions. (Pro Company)

4. Tax incentives and additional benefits

Although tax incentives have been discussed at length in previous reports, this section highlights additional and specific measures for emigrants.

• Tax exemptions in emerging sectors: In addition to traditional sectors such as tourism and renewable energy, Cape Verde has introduced tax incentives for emerging sectors, such as technology and the blue economy. For example, technology start-ups can benefit from reductions in corporation tax (IRPC) and exemptions on imported equipment. (consultancy.cv)
• Bilateral agreements to avoid double taxation: Cape Verde has tax treaties with countries such as Portugal and the United States, allowing profits to be repatriated without incurring additional tax penalties. This benefit is particularly attractive to expatriates wishing to invest in the country. (consultancy.cv)
• Simplifying procedures: Recent legislative reforms have introduced simpler procedures for accessing tax incentives, including the establishment of a direct line of communication with the CI and digital platforms for submitting applications. (LusoJornal)

5. Training and skills development

Investing in Cape Verde requires not only capital, but also an understanding of the market and local dynamics. To this end, the government and private organisations have been promoting capacity-building initiatives.

• Business training programmes: Organisations such as Pro Empresa offer workshops and courses to train investors in areas such as business management, finance and local legislation. (Pro Company)
• Partnerships with local universities: Cape Verdean universities have been working with investors to promote the transfer of knowledge and technology, particularly in sectors such as renewable energy and sustainable agriculture.
• Networking events: Trade fairs and conferences organised by local chambers of commerce are valuable opportunities to network and gain a better understanding of the business environment in Cape Verde.

This suite of tools and resources demonstrates Cape Verde’s commitment to creating a favourable business environment for expatriates, promoting both the country’s economic development and the success of investors.

Conclusion

Investing in Cape Verde as an expatriate presents a promising opportunity, particularly in strategic sectors such as sustainable tourism, renewable energy, the blue economy and technology. These sectors benefit from significant tax incentives, such as IRPC exemptions, VAT reductions and customs duty exemptions, as set out in the Law no. 73/IX/2020. Furthermore, bilateral double taxation agreements with countries such as Portugal and the United States enhance the country’s appeal, enabling the efficient and secure repatriation of profits. These measures underline the Cape Verdean government’s commitment to attracting capital from the diaspora and diversifying the economy.

However, the success of the investment depends on thorough preparation and compliance with legal and administrative procedures, such as tax registration, obtaining specific licences and consulting local experts. Tools such as the Portal for Cape Verdean Communities and the support of organisations such as the Cape Verdean Investment Promotion Agency (CI) are essential for streamlining the process and ensuring compliance. Furthermore, access to finance through local banks, co-investment funds and programmes such as the PIDC provides robust financial support for projects of various scales.

To maximise the potential for success, investors are advised to take advantage of the capacity-building initiatives, networking events and consultancy services available. Continuous monitoring of investments, through regular reports and audits, is equally crucial to ensuring the sustainability and positive impact of projects. With an increasingly transparent and welcoming business environment, Cape Verde is positioning itself as an attractive destination for the diaspora wishing to contribute to the country’s economic development, whilst achieving solid financial returns.