CABO VERDE LAW AND PRACTICE Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Manuel Esteves de Albuquerque and Mafalda Contumélias Batista, Raposo Bernardo & Associado s
DMP investment projects implemented in municipal areas where the GDP per capita is lower than the national average have the follow - ing additional benefits: • CIT credit of 40% of the eligible investments effectively made (capped at 50% of the CIT assessed); and • IUP exemption on the acquisition of real estate used in the development of the com - pany’s main activity, including any developing needs arising throughout the first five years following the acquisition. Direct Investment Made in Cabo Verde by Emigrants Direct investment made by emigrants shall ben - efit from the following tax incentives, as estab - lished 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 author - ised foreign investment; and • exemption from customs duties on the acqui - sition 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 per - manently living abroad, and to former emigrant pensioners and retired people receiving pen - sions and similar income from their country of immigration. Investment in tangible assets or intangibles in Cabo Verde is eligible under the conditions con - tained in the regime – eg, the incorporation of entities or branches in Cabo Verde, the acquisi - tion 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 pro - vided for industrial activity. CIT benefits A CIT credit is available for up to 50% of the eli - gible 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 technolo - gies. IUP benefits Industrial activities may benefit from an exemp - tion from IUP on the acquisition of immovable property used exclusively for industrial purpos - es; however, the recognition of such tax exemp - tion should be approved by the municipality. Customs duty benefits Industrial activities benefit from an exemption from customs duties on the importation of con - struction materials, machines, utensils, semi and fully finished materials, products and raw materi - als used in the production of goods. Stamp duty benefits Financing transactions of industrial projects are exempt from stamp duty. International Business Centre (IBC) of Cabo Verde The Cabo Verdean Agency for Foreign Invest - ment is the entity responsible for granting licenc - es to operate within the IBC, upon previous pro - posal of the Zona Franca Comercial S.A. The following tax benefits are applicable to entities licensed to operate in the IBC on income from
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