Double Taxation Treaties in Cabo Verde: A Strategic Framework for Investment

As Cabo Verde positions itself as a competitive "Mid-Atlantic Platform" for services, finance, and tourism, expanding its network of Double Taxation Treaties (DTTs) has become a key part of its economic strategy. These agreements prevent investors from paying taxes on the same income in two different countries, making cross-border trade and investment easier while also creating tools to fight tax evasion.

Current Network of Agreements

Cabo Verde has signed double taxation agreements with various countries, reflecting its historical connections and regional integration goals. As of the most recent reporting period, the country has DTTs with the following places:

• Europe: Portugal, Spain, and Luxembourg.
• Africa: Angola, Equatorial Guinea, Guinea-Bissau, Mauritius, and Senegal.
• Asia: Macau.

Beyond bilateral treaties, Cabo Verde has also signed a multilateral agreement to eliminate double taxation with member countries of the Economic Community of West African States (ECOWAS). This regional treaty is crucial for the country's integration into the West African economic bloc, simplifying tax obligations for businesses operating across the region.

Pipeline and Future Expansions

The government is actively negotiating with new partners to expand its tax cooperation network. Negotiations have been completed with Morocco, Singapore, and the United Arab Emirates. Additionally, there are ongoing efforts regarding double taxation conventions and fighting tax fraud with Italy, Turkey, Hungary, Germany, and the Czech Republic.

A major strategic goal for the 2025–2026 planning period and beyond is to expand DTTs to cover the 25 main countries where Cabo Verdean emigrants live. This initiative aims to protect diaspora investments and facilitate money flows from emigrants back into the national economy, extending investment protection to all major countries where Cabo Verdeans have settled.

Benefits for Investors

For international investors, DTTs offer significant advantages compared to standard domestic tax rules. Under the Corporate Income Tax Code (CITC), capital income earned in Cabo Verde by non-residents with a permanent establishment is generally taxed at a withholding rate of 20%. Certain types of capital income, such as dividends, interest on public debt securities, and bonds, face a reduced withholding rate of 10%.

However, having a DTT can reduce these rates even further. Agreements with countries like Portugal, Spain, and Macau give citizens and companies from these countries more favorable tax rates than those without treaty protection. This tax advantage is designed to encourage Foreign Direct Investment (FDI) and support Cabo Verdean companies expanding internationally.

Transparency and International Standards

Cabo Verde's approach to DTTs is closely tied to its commitment to transparency and fighting illegal financial flows. The country is a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The government sees institutional cooperation—both within the country and internationally—as a powerful tool to combat tax evasion and ensure financial transparency. This involves signing and ratifying various bilateral and multilateral treaties that allow tax information sharing, ensuring the country meets international best practices and offers a credible environment for global investors. The ongoing strategy includes participating in regional and international groups dealing with digital economy taxation and maintaining a network of agreements that meet minimum international standards.