flag Cape Verde Cape Verde: Investing

FDI in Figures

FDI flows to Cape Verde have declined significantly due to the Covid-19 pandemic, given the predominantly EU origin and focus on the tourism sector. According to UNCTAD’s World Investment Report 2021, FDI inflows decreased by 31% to USD 73 million in 2020. Delays in investment projects were observed not only in tourism, but also in transportation and ICT. The total stock of FDI was estimated at USD 2.5 billion in 2020. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). Overall, tourism is the sector that attracts the most FDI and the main investors are Western European countries (UK, Portugal, Italy and Spain). Investments from China have are on the rise, focusing on the tourism and infrastructure sectors, as well as the construction of a special economic zone (Coface). As the authorities aim to prioritise sustainability and economic diversification, the green energy sector is expected to attract new investments in the future.

Cape Verde ranks 137th out of 190 in the World Bank's 2020 Doing Business report, a six-spot decrease compared to the previous year. The country enjoys remarkable political and economic stability, as well as robust institutions. Moreover, growth in some sectors, such as public works, tourism and fishing has created new opportunities. However, as an archipelago state, Cape Verde is highly fragile and vulnerable to climate change, thus requiring additional resources to build resilience. The Government has continued to implement its privatisation programme, even though few investors have shown interest. Additionally, the State has decided to reduce taxes and administrative procedures, while also improving electrical infrastructure. Even though there is room for improvement, the regulatory environment and incentives are attracting tourism investors and major new projects. Under the Investment Law and the Law of Industrial Development, national and foreign investors are treated equally. In February 2020, Cape Verde was removed from `blacklist` of tax havens in the European Union.

 

Country Comparison For the Protection of Investors

  Cape Verde Sub-Saharan Africa United States Germany
Index of Transaction Transparency* 1.0 5.5 7.0 5.0
Index of Manager’s Responsibility** 5.0 3.5 9.0 5.0
Index of Shareholders’ Power*** 6.0 5.5 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 201820192020
FDI Inward Flow (million USD) 11010773
FDI Stock (million USD) 2,113.92,171.22,462.7
Number of Greenfield Investments* 1.03.00.0
Value of Greenfield Investments (million USD) 1012110

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

Return to top

Tax Rates

Value added Tax (VAT) - Imposto sobre o valor acrescentado (IVA)
15% (standard rate).
Exempt transactions include certain hospital and medical care services, the provision of children's or young people's education, school or university education, the supply of services and goods by non-profit-making organisations, the supply of copyright and art objects by the original creators or their heirs, garbage removal services, burial and cremation supplies, banking, financial, insurance, and reinsurance transactions, immovable property transactions, some basic foodstuff and pharmaceutical products, goods used in agriculture, stockbreeding, forestry, and fisheries, etc.

Zero-rated items include: import of goods whose supply qualifies for exemption; services in connection with the import of goods where the value of such services is included in the taxable amount; import of gold by the central bank; import into ports by sea fishing undertakings of their catches, unprocessed or after undergoing preservation for marketing but before being supplied; import of goods under diplomatic and consular arrangements that qualify for exemption from customs duties; import of goods for the fuelling and provisioning of sea-going vessels and aircraft; supply, modification, repair, maintenance, chartering, and hiring of aircraft used by airlines operating both on domestic and international routes, and the supply, hiring, repair, and maintenance of equipment incorporated or used therein; the supply of goods for the fuelling and provisioning of such aircraft; services meeting the direct needs of such aircraft or their cargoes; etc.

Company Tax
22%
Withholding Taxes
Dividends: 0%, Interests: 20%, Royalties: 20%.
Social Security Contributions Paid By Employers
16%
Other Domestic Resources
Finance Ministry
Overview of Cabo Verde's tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Single Income Tax (IUR) Progressive rate from 16.5% to 27.5%
An exemption from taxation applies to net income of up to CVE 220,000/year
CVE 0 - 960,000 16.5%
CVE 960,001 - 1,800,000 23.1%
CVE 1,800,000 and above 27.5%
 
 

Country Comparison For Corporate Taxation

  Cape Verde Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 30.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 180.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 37.5 47.3 36.6 48.8

Source: Doing Business - Latest available data.

Return to top

Investment Opportunities

Tenders, Projects and Public Procurement
Tenders Info, Tenders in Cape Verde
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Cape Verde.
Useful Resources
Economic Developments and Prospects in Cape Verde - African Economic Outlook
 

Business Setup Procedures

Setting Up a Company Cape Verde Sub-Saharan Africa
Procedures (number) 9.00 7.51
Time (days) 9.00 21.30

Source: Doing Business.

 
 
 

Return to top

Any Comment About This Content? Report It to Us.

 

Learn more about Investing in Cape Verde on Globaltrade.net, the Directory for International Trade Service Providers.

© Export Entreprises SA, All Rights Reserved.
Latest Update: May 2022