The Cape Verdean government offers local and foreign investors the same incentives[i]. The incentives do not carry performance requirements. Instead, the government favors investments that are either export-oriented or diversify geographically and technologically the country’s industrial base.
Through existing international agreements, exporters have preferential access to the markets of Europe, West Africa and the United States. Incentives to firms that export their entire output (free-zone enterprises) are the most generous, but all foreign firms investing in Cape Verde, regardless of the location of their markets, can benefit from the following incentives:
- Entitlement to a full exemption from tax obligations applicable to all dividends and profits, generated during the first five years of operation, on condition that foreign capital is reinvested;
- Provision of tax exemptions on amortizations and interests accruing from foreign investment related financial transactions;
- Standardization of the tax regime (10% of sole personal income (IUR), after the sixth year of activity, considering the bilateral clauses, stipulated in agreements observed by the Cape Verde and the foreign investor’s country;
- Tax-exemptions on dividends and profit taxations shared by stakeholders during the first five-year period of production activity;
- Tax-exemptions on dividends which are reinvested; and
- Tax-exemptions on amortizations and interests.
Sectors Specific Incentives
- Exemption from corporate taxes, consumer tax and general customs emoluments on the import of goods, equipment and listed materials;
- Exemption of sole personal income (IUR) on incomes generated in each new industrial establishment that has been previously registered within a three-year period;
- Free export of goods;
- Tax deduction of reinvested profits. (Law Decree 108/ 89, of December 30); and
- Industrial Activity Law (Law Decree 13/ 2010, of November 8).
- Exemption from general customs duties over imports of materials used for exclusive construction or installation of tourism facilities;
- Exemption from real estate transfer and property taxes;
- 100% tax exemption for the first five-year period; 50%; exemption for the subsequent ten years;
- Tax deduction on profits reinvested in similar activities;
- Tax deduction for expenses incurred in training the local taskforce;
- Tourism Utility Act (Law Decree 11/ 94 of 14 February 1994);
- Duty-free imports, customs waivers on goods and materials required for export products;
- Free export of goods. (Law Decree 42 / IV / 92, of 6 April 1992)
In order to benefit from these advantages the investor has to qualify for a “foreign investor status” through Cabo Verde Investimentos.