{"id":4663,"date":"2026-07-15T12:30:00","date_gmt":"2026-07-15T13:30:00","guid":{"rendered":"https:\/\/consultoria.cv\/?p=4663"},"modified":"2026-07-13T15:29:13","modified_gmt":"2026-07-13T16:29:13","slug":"a-project-of-exceptional-merit-the-framework-that-turns-major-investments-into-a-competitive-advantage","status":"publish","type":"post","link":"https:\/\/consultoria.cv\/en\/projeto-de-merito-diferenciado-o-estatuto-que-transforma-grandes-investimentos-em-vantagem-competitiva\/","title":{"rendered":"Differentiated Merit Scheme: the scheme that turns major investments into a competitive advantage"},"content":{"rendered":"

In Cape Verde, not all investments are treated equally under the law. For projects that exceed a certain value threshold and demonstrate a transformative impact on the national economy, the State has created a preferential tax regime: the Distinguished Merit Project (PMD)<\/strong>. This status turns major investments into a real competitive advantage, offering exceptional tax and customs benefits that can significantly reduce the total cost of implementation and operation.<\/p>\n\n\n\n

In this comprehensive guide S&D Consultancy<\/a><\/strong> explains what the PMD is, who is eligible to apply, what specific benefits are available, and how to structure your project to make the most of this opportunity.<\/p>\n\n\n\n

What is the Distinguished Merit Scheme?<\/h2>\n\n\n\n

O Distinguished Merit Project (PMD)<\/strong> It is a special status granted to large-scale investment projects with a significant economic, social and environmental impact in Cape Verde. It was formalised by the Law No. 80\/IX\/2020 of 26 March<\/strong>, as part of the 2020 tax reform which strengthened the framework of incentives for productive investment.<\/p>\n\n\n\n

This is a scheme that recognises and rewards projects which go beyond conventional investment \u2013 projects that create skilled jobs, improve the balance of payments, introduce sustainable technology and contribute to the country\u2019s economic diversification.<\/p>\n\n\n\n

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Requirements for obtaining LDC status<\/h2>\n\n\n\n

To be classified as a Project of Exceptional Merit, the project must meet the following criteria: cumulatively<\/strong> the following requirements:<\/p>\n\n\n\n

General requirements (investment \u2265 CVE 1,500,000,000 \/ ~EUR 13.6 million):<\/h3>\n\n\n\n

<\/p>\n\n\n\n

Requirement<\/th>Details<\/th><\/tr><\/thead>
Minimum investment<\/strong><\/td>CVE 1,500,000,000 (approximately EUR 13.6 million)<\/td><\/tr>
Balance of payments<\/strong><\/td>To contribute, in net terms, to an improvement in the balance of payments<\/td><\/tr>
Environmental sustainability<\/strong><\/td>To use technology, production processes and marketing methods that minimise environmental impacts<\/td><\/tr>
Skilled job<\/strong><\/td>Create at least 5 skilled jobs<\/strong> (specialised technical, vocational or higher education, including management positions)<\/td><\/tr>
Quality of the offering<\/strong><\/td>Introduce factors likely to contribute to a higher quality of supply<\/td><\/tr>
Tax compliance<\/strong><\/td>Meet the general conditions for claiming the tax reliefs provided for in the Tax Reliefs Code<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: Guide to Investing in Cape Verde<\/a><\/a><\/p>\n\n\n\n

Reduced requirements for local authorities with a per capita GDP below the national average:<\/h3>\n\n\n\n

For projects implemented in municipalities with an average GDP per capita below the national average over the last three years<\/strong>, the minimum investment is reduced to CVE 500,000,000 (approximately EUR 4.5 million)<\/strong>.<\/a><\/p>\n\n\n\n

Tax and customs benefits under the PMD<\/h2>\n\n\n\n

Projects falling under the PMD scheme benefit from a package of exceptional incentives:<\/p>\n\n\n\n

Key tax benefits:<\/h3>\n\n\n\n
Benefits<\/th>Details<\/th><\/tr><\/thead>
Exemption from customs duties<\/strong><\/td>When importing goods and products related to the main purpose of the project<\/td><\/tr>
Stamp duty exemption<\/strong><\/td>In transactions involving the raising of finance for investment purposes<\/td><\/tr>
Exemption from an IUP<\/strong><\/td>When purchasing property intended solely for the purposes of the project<\/td><\/tr>
Tax credit 30%<\/strong><\/td>On significant investments made in strategic sectors (tourism, renewable energy, ICT, health, the environment, the creative industries, transport, R&D)<\/td><\/tr>
Tax credit for 20%<\/strong><\/td>On significant investments in other areas<\/td><\/tr>
Contribution towards training costs<\/strong><\/td>Up to 50% of charges<\/strong> including staff training and qualification during the first year of operation<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Additional benefits in less developed municipalities:<\/h3>\n\n\n\n

In municipalities where per capita GDP is below the national average, in addition to the reduced investment threshold, projects may benefit from additional incentives<\/strong> as set out in the regional development policy.<\/a><\/p>\n\n\n\n

PMD vs. Establishment Agreement: What\u2019s the difference?<\/h2>\n\n\n\n

Investors should understand the distinction between the PMD and the Establishment Agreement<\/a><\/strong>, another scheme for major projects:<\/p>\n\n\n\n

Feature<\/th>Distinguished Merit Project (PMD)<\/th>Establishment Agreement<\/th><\/tr><\/thead>
Minimum investment<\/strong><\/td>CVE 1.5 billion (~EUR 13.6 million)<\/td>CVE 3 million contos (~EUR 27M)<\/td><\/tr>
Skilled job<\/strong><\/td>At least 5 posts<\/td>At least 20 posts<\/td><\/tr>
Economic significance<\/strong><\/td>Significant for the national economy<\/td>Relevant to promoting and accelerating development<\/td><\/tr>
Duration of benefits<\/strong><\/td>In accordance with the Tax Benefits Code<\/td>Up to 15 years<\/strong> (maximum)<\/td><\/tr>
Cumulative effect<\/strong><\/td>Can be combined with other CBF benefits<\/td>Not cumulative<\/strong> along with other benefits from the CBF<\/td><\/tr>
Approval<\/strong><\/td>Granting of PMD status<\/td>Approval by the Council of Ministers<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

<\/a><\/p>\n\n\n\n

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Strategic tip:<\/strong> The PMD is ideal for medium- to large-scale projects that wish to retain flexibility in the accumulation of benefits. The Establishment Agreement is more suitable for large-scale, infrastructure-related projects that require a negotiated and bespoke tax regime.<\/p>\n<\/blockquote>\n\n\n\n

Strategic sectors eligible for the PMD scheme<\/h2>\n\n\n\n
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The PMD scheme is particularly attractive to the following sectors:<\/p>\n\n\n\n

Sector<\/th>Potential benefits<\/th><\/tr><\/thead>
Tourism and hospitality<\/strong><\/td>30% tax credit; exemption from IUP tax on holiday properties<\/td><\/tr>
Renewable energies<\/strong><\/td>Exemption from import duties, VAT and ICE on imports of photovoltaic panels and inverters (Executive Order 2026)<\/td><\/tr>
Technology and ICT<\/strong><\/td>Tax credit of 30%; R&D deductions from 40% to 50%<\/td><\/tr>
Creative industries<\/strong><\/td>Tax credit 30%; exemption from customs duties on equipment<\/td><\/tr>
Health and the environment<\/strong><\/td>30% tax credit; training subsidy<\/td><\/tr>
Air and sea transport<\/strong><\/td>30% tax credit; stamp duty exemption on loans<\/td><\/tr>
Agribusiness and exports<\/strong><\/td>Incentives for production and modernisation; tax relief for job creation<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Source: Tax Incentives in the 2026 State Budget aimed at the Cape Verdean diaspora<\/a><\/a><\/p>\n\n\n\n

The PMD application process<\/h2>\n\n\n\n

Step 1: Project development and due diligence<\/h3>\n\n\n\n