CABO VERDE Law and Practice Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Manuel Esteves de Albuquerque and Júlio Martins Júnior, Raposo Bernardo & Associados
• a reduced customs duty rate of 5% on the impor - tation of materials, goods and equipment men - tioned in Article 15 of the Tax Benefit Code; • customs duty exemption on the importation of raw materials, consumables, finished and semi-finished materials and other products to be incorporated in products manufactured by the company – in the case of industrial investment (ie, projects of companies registered in the Cadastro Industrial), the exemption is also applicable to packaging and wrapping materials used in products manufactured by the company; • CIT tax credit of 30% of the eligible investments effectively made (capped at 50% of the CIT assessed); • stamp tax exemption on the borrowing of funds for the investment; • property tax (IUP) exemption on the acquisition of real estate aimed exclusively at the installation of the investment project; and • other non-tax incentives established in specific legal diplomas. DMP investment projects implemented in municipal areas where the GDP per capita is lower than the national average have the following additional ben - efits: • CIT credit of 40% of the eligible investments effec - tively made (capped at 50% of the CIT assessed); and • IUP exemption on the acquisition of real estate used in the development of the company’s main activity, including any developing needs arising throughout the first five years following the acquisi - tion. Direct Investment Made in Cabo Verde by Emigrants Direct investment made by emigrants shall benefit from the following tax incentives, as established by Law 73/IX/2020, of 2 March: • exemption from taxation (as contained in the CIT Code) of dividends and profits distributed to the emigrant investor arising from authorised foreign investment; and
• exemption from customs duties on the acquisi - tion of materials for construction, extension or refurbishment of a first residential house, including furniture, appliances and other imported goods, under certain conditions. The regime applies to emigrant investors permanently living abroad, and to former emigrant pensioners and retired people receiving pensions and similar income from their country of immigration. Investment in tangible assets or intangibles in Cabo Verde is eligible under the conditions contained in the regime – eg, the incorporation of entities or branches in Cabo Verde, the acquisition of shareholdings, or the granting of loans or other forms of financing of entities in which a shareholding is held. Industrial Activity The following tax and customs benefits are provided for industrial activity. CIT benefits A CIT credit is available for up to 20% of the eligible investments made in an industrial activity. Any unused tax credit may be carried forward for ten years, subject to certain limitations. Eligible investments include the acquisition of new fixed assets, patents and licences regarding technologies. IUP benefits Industrial activities may benefit from an exemption from IUP on the acquisition of immovable property used exclusively for industrial purposes; however, the recognition of such tax exemption should be approved by the municipality. Customs duty benefits Industrial activities benefit from an exemption from customs duties on the importation of construction materials, machines, utensils, semi and fully finished materials, products and raw materials used in the pro - duction of goods. Stamp duty benefits Financing transactions of industrial projects are exempt from stamp duty.
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