Cape Verde has emerged as an attractive investment destination thanks to the implementation of a comprehensive set of tax incentives and policies to support business development. Through strategic measures, the Cape Verdean government seeks to foster sustainable economic growth, attract foreign capital and support innovation and the competitiveness of local companies. These initiatives are regulated by a robust legal framework, such as the Tax Incentives Code, This has significant benefits for different sectors of the economy.
Among the main tax incentives available are exemptions from taxes such as Value Added Tax (VAT), Stamp Duty and Single Income Tax (IUR). In addition, the country offers specific tax regimes, such as the Special Unified Tax and Social Security Contribution Scheme, This simplifies taxation for micro and small businesses by applying a single rate of 4% on gross sales.
Another highlight is the support for strategic sectors such as tourism, renewable energies and technology. For example Decree-Law no. 22/2020 grants Tourist Utility status to projects that promote sustainable tourism, offering tax exemptions on the import of essential materials and equipment. In addition, the government prioritises investments in health, education and environmental sustainability, with tax deductions for projects that improve quality of life and promote energy efficiency.
For emigrant investors, the Law no. 73/IX/2020 introduces exclusive benefits, including tax exemptions on dividends and profits, as well as reduced customs duties for the purchase of goods and materials for eligible projects. This scheme aims to strengthen economic ties between the Cape Verdean diaspora and the country.
Recently, the 2025 State Budget brought new measures to ease the tax burden on companies, such as the reduction in the corporate income tax rate from 21% to 20%, with a reduced rate of 16% applied to the first 50,000 euros of taxable income for Small and Medium-sized Enterprises (SMEs). These changes, detailed in State Budget 2025, The aim is to increase business competitiveness and attract new investment.
This report explores in depth the tax benefits, exemptions and incentive policies available in Cape Verde, providing a clear and practical overview for companies and investors interested in taking advantage of the opportunities offered by the country.
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Resident or non-resident companies with a permanent establishment in Cape Verde that make capital contributions in cash to companies eligible under the Young Start-up Programme can benefit from tax deductions. These contributions are also applicable to companies located in municipal territories whose average GDP per capita over the last three years is lower than the national average, as well as to micro and small companies.
The main points of this incentive include:
This benefit, however, is not cumulative with the tax benefit relating to the conventional return on share capital. More details can be found at official website.
Companies with headquarters and effective management in Cape Verde that develop internationalisation projects can benefit from a specific tax regime, provided that the projects are carried out before 31 December 2020. Although the initial eligibility date has expired, this regime may be updated in future legislation. The benefits include:
For more information, see PwC's tax summary.
Cape Verde offers significant tax benefits related to the import of goods, with a focus on strategic sectors. Among the main incentives are:
These incentives are in line with the country's sustainable development objectives. More information can be found at tax guide for capeverdean businesses.
Law 73/IX/2020 introduced a specific tax regime for emigrants who make direct investments in Cape Verde. The main benefits include:
This scheme aims to attract foreign capital and foster local economic development. See Consular Portal for more details.
Companies resident in Cape Verde, as well as non-residents with a permanent establishment, can benefit from significant tax deductions for expenses related to research and development. The main points include:
This incentive is particularly relevant for companies in technological and industrial sectors. More information is available at PwC's tax summary.
To simplify taxation for micro and small businesses, Cape Verde has implemented a special unified regime. This regime replaces multiple taxes with a single rate of 4% on the gross value of sales. The taxes replaced include:
This scheme reduces the administrative burden and encourages the formalisation of small businesses. More information can be found at tax guide for capeverdean businesses.
Cape Verde actively promotes environmental sustainability through targeted tax incentives. These include:
These incentives are in line with Cape Verde's commitments to the Sustainable Development Goals. See Ministry of Finance for more information.
The tourism sector benefits from a specific tax regime aimed at attracting investment and promoting sustainable development. The main benefits include:
These incentives are provided for in Decree-Law 22/2020 and are fundamental to the sector's growth. More details are available at official website.
Companies that hire young people under the age of 37 for their first job can benefit from exemption from employer's social security contributions. To be eligible, the contract must be for at least one year and the worker must be registered with the social security system. This incentive aims to promote youth employment and social inclusion.
More information can be found at PwC's tax summary.
Cape Verde has sought to diversify its economy, promoting emerging sectors such as the digital economy and biotechnology. These sectors are considered strategic for the country's sustainable development, offering specific tax benefits to attract investment. Companies investing in these sectors can benefit from:
These incentives complement the Cape Verde government's efforts to position the country as an innovation hub in the African region.
O StartUp Youth Programme, launched in 2017, is an initiative designed to support young entrepreneurs aged between 18 and 35. This programme offers a series of tax and financial benefits for start-ups, including:
In addition, the programme promotes economic decentralisation, ensuring equal opportunities for entrepreneurs on all the islands of the archipelago.
Companies operating in strategic sectors such as sustainable tourism, renewable energies and technology can benefit from additional tax incentives by reinvesting their profits in the country. These incentives include:
These benefits aim to encourage the retention of capital in the country and promote the development of sectors that contribute to economic diversification.
Companies that import technological and sustainable equipment for projects in Cape Verde can benefit from specific tax exemptions, such as:
These measures are key to reducing companies' operating costs and encouraging the adoption of sustainable practices.
Cape Verde offers specific tax incentives for companies that implement social inclusion and regional development projects. These incentives include:
These policies reinforce the Cape Verdean government's commitment to social cohesion and sustainable development.
One of the most important measures in Cape Verde's State Budget for 2025 is the reduction in the Corporate Income Tax (CIT) rate. The general rate was reduced from 21% to 20%, while for SMEs, the rate levied on the first 50,000 euros of taxable income was reduced from 17% to 16%. This policy aims to ease the tax burden on companies, allowing them to reinvest more resources in growth and innovation.
In addition, the Special Unified Tax Regime for micro and small businesses, which establishes a single tax of 4% on the gross value of sales, continues to be an essential tool for simplifying tax management and reducing administrative costs. This regime replaces taxes such as VAT, Stamp Duty and Fire Tax, encouraging the formalisation of businesses and promoting competitiveness. (consultancy.cv)
The Tripartite Agreement on Wage Valorisation and Economic Growth 2025-2028 introduced a significant tax incentive for companies that increase the average annual salary of their workers. Companies that implement wage increases of at least 4.7% compared to the previous year will be able to benefit from a 200% surcharge on the cost of these increases. This measure, which previously provided for a surcharge of 150%, has been extended to strengthen the valorisation of human capital and encourage the retention of talent in the Cape Verdean market.
This policy not only improves the competitiveness of companies, but also contributes to social inclusion and the strengthening of workers' purchasing power, creating a virtuous cycle of economic development. (consultancy.cv)
Cape Verde has shown a growing commitment to environmental sustainability, offering tax incentives for projects related to renewable energies and energy efficiency. Companies that invest in sustainable technologies can benefit from tax exemptions on the import of equipment and tax deductions for projects that promote the reduction of carbon emissions.
In addition, the introduction of the carbon tax in the 2025 budget aims to incentivise more sustainable business practices. Companies that adopt measures to reduce their ecological footprint will be able to access specific tax benefits, reinforcing the transition to a green economy. This approach is in line with the country's sustainable development goals and its climate resilience strategy. (unicv.edu.cv)
The 2025 State Budget also provides for exemptions on the import of public passenger transport vehicles, taxis and heavy goods vehicles for tourism. These measures aim to reduce the operating costs of companies that depend on imports and improve the transport infrastructure, which is essential for economic growth and social inclusion.
In addition, logistics and transport companies that import vehicles no older than five years can benefit from exemptions from customs duties and VAT, as long as the vehicles are used exclusively for commercial activities. This benefit significantly reduces initial operating costs, encouraging investment in sectors that are critical to the Cape Verdean economy. (consultancy.cv)
The Cape Verdean government is continuing to invest in tax incentives for research and development (R&D) as a way of fostering innovation and competitiveness in the global market. Companies that invest in R&D projects can benefit from significant tax deductions, encouraging the creation of new products and services.
These incentives are particularly relevant for strategic sectors such as technology, sustainable tourism and the digital economy, which have the potential to diversify the country's economic base and reduce dependence on tourism. The policy of encouraging innovation is complemented by programmes such as StartUp Jovem, which offers tax benefits to emerging companies led by young entrepreneurs. (consultancy.cv)
The tax policies in the 2025 State Budget also have a strong focus on social inclusion. Projects that promote social cohesion, such as investments in education, health and housing, can benefit from specific tax deductions. These measures aim not only to improve the population's quality of life, but also to create a more stable and attractive environment for business investment.
For example, companies that invest in health and education infrastructure can deduct the costs of equipment and technologies that improve the services provided. This policy is in line with the government's long-term objectives of promoting economic and social resilience. (unicv.edu.cv)
Although fiscal policies are largely favourable, the increase in interest rates by the Bank of Cape Verde (BCV) in 2024 and 2025 represents a challenge for companies. With increases of 25 and 50 basis points respectively, financing costs have become higher, which can limit companies' ability to invest, especially SMEs.
However, the government has tried to mitigate this impact through credit lines with preferential conditions for strategic sectors and programmes to support business financing. These measures aim to balance the effects of restrictive monetary policies and ensure that companies continue to have access to financial resources to expand their operations. (consultancy.cv)
Cape Verde's tax incentive system offers a wide range of benefits aimed at companies from different sectors and of different sizes, with the aim of encouraging investment, innovation and sustainable development. Among the main incentives are tax deductions for capital contributions under the Young Start-up Programme, IRPC reductions for internationalisation projects and customs duty exemptions for imports of strategic goods, such as technological and sustainable equipment. These measures are complemented by specific regimes, such as the Special Unified Regime for micro and small companies, which simplifies taxation and reduces administrative burdens, and incentives for emerging sectors, such as the digital economy and biotechnology, which include tax exemptions and deductions for research and development (consultancy.cv).
Tax incentives also reflect a commitment to social inclusion and environmental sustainability, promoting the creation of young jobs, the valorisation of human capital and investment in green technologies. In addition, the tax regime for emigrants and the benefits for sustainable tourism and regional development projects reinforce the alignment of tax policies with the Sustainable Development Goals. However, challenges such as the impact of rising interest rates on business financing require attention, and it is necessary to continue implementing measures to mitigate these effects and guarantee access to credit for priority sectors (unicv.edu.cv).
In short, Cape Verde's tax framework offers significant opportunities for companies wishing to invest in the country, especially in strategic areas such as innovation, sustainability and social inclusion. To maximise the benefits, it is essential that companies maintain rigorous tax management and keep up with legislative updates, ensuring compliance with the eligibility conditions and taking advantage of the incentives available. More detailed information can be found at official website.
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