Fiscal Incentives and Tax incentives for Investors

The Investor's Gateway: Unlocking Fiscal Incentives in Cabo Verde

Cabo Verde is working to establish itself as a secure "Mid-Atlantic Platform" for trade, services, and tourism. To support this goal, the government has created a strong system of tax incentives to attract foreign investment into key sectors. From very low corporate tax rates for tech companies to major exemptions for tourism developers, the islands offer competitive advantages backed by political stability and legal protection.

Here's what foreign investors need to know about tax incentives available in 2024–2025.

The General Framework: Rights and Guarantees

Before looking at specific sectors, investors should understand that the Investment Law treats foreign and domestic investors equally. Foreign investors can convert currency and send all profits, dividends, and royalties abroad, as long as the investment is registered with the Central Bank of Cabo Verde (BCV) through Cabo Verde TradeInvest—the national agency that serves as a single contact point for investors.

Tourism: The Engine of Growth

Tourism drives the economy, contributing about 25% of GDP. To expand beyond traditional beach tourism, the government offers generous incentives for projects that qualify for Tourist Utility Status (Estatuto de Utilidade Turística).

Corporate Tax Exemption: Qualifying tourism projects get a complete exemption from Corporate Income Tax (IRPC) for the first 5 years of operation.
Customs Duty & VAT Exemptions: Investors don't pay import duties or VAT on materials and equipment needed for building and setting up tourism projects. This especially helps with materials not available locally.
Establishment Conventions (Mega-Projects): Large investments over 3 billion CVE (about €27 million) that create at least 20 qualified jobs can negotiate directly with the government. These agreements can secure tax benefits (exemptions on income, property, and stamp taxes) for up to 15 years, providing long-term tax certainty.

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The Digital Economy: The "Cyber Island" Strategy

Cabo Verde wants to become a digital hub for West Africa, using its submarine cable connections (like EllaLink) and the new TechPark CV. To attract tech companies, the government created the Special Economic Zone for Technologies (ZEET).

Ultra-Low Corporate Tax: Technology companies approved to operate in the ZEET pay just 2.5% corporate tax.
Dividend Tax Exemption: Shareholders of ZEET companies don't pay income tax on dividends and profits they receive.
Import Exemptions: Tech companies avoid paying VAT and customs duties when importing hardware, equipment, and raw materials essential to their business.
Digital Nomads: The "Remote Working Program" lets digital nomads stay for six months (renewable). Participants don't pay local income tax on money they earn from foreign sources.

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Renewable Energy: Powering the Transition

With a target of 50% renewable energy by 2030, Cabo Verde strongly encourages green energy investment to reduce dependence on imported fossil fuels.

Investment Tax Credits: Companies investing in renewable energy production or equipment assembly can deduct up to 30% of their eligible investment from their Corporate Income Tax bill.
Customs Exemptions: Complete exemption from import duties on capital goods, machinery, and equipment for renewable energy production (solar panels, wind turbines, batteries).
Reduced VAT: The VAT rate for electricity and water delivered to consumers is reduced to 8% (from the standard 15%).

The International Business Centre (CIN)

The International Business Centre (CIN) targets industrial, commercial, and service companies focused on exports or serving international clients. It offers tax rates based on job creation, valid until 2030.

Jobs Created Corporate Tax Rate (IRPC)
5+ Jobs 5.0%
20+ Jobs 3.5%
50+ Jobs 2.5%

Service Providers: Companies in the International Service Centre creating at least 2 jobs qualify for the 2.5% rate.
Materials Exemption: CIN companies don't pay customs duties on materials and equipment imported for setup and operations.

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Special Economic Zone for Maritime Economy (ZEEM-SV)

Located on São Vicente, the ZEEM-SV focuses on the blue economy (fisheries, ship repair, logistics). It aims to transform the island into a maritime logistics hub, supporting fish industry development and ship fueling services. Investments here benefit from the broader incentives available for industrial and export activities, including tax credits and duty-free imports of raw materials.

NOTE

Investors should contact Cabo Verde TradeInvest to understand the specific requirements for qualifying for these programs.

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