Cabo Verdean law is based on the civil law system. The Constitution of Cabo Verde and relevant legislation provide for a judiciary independent from the executive. The judicial system in Cabo Verde is based on three levels of appreciation by different courts:
As a rule, any case shall be presented at the First Instance Courts and, depending on several requisites (such as the value of the case or the subject matter), the party that loses the case may appeal to the Court of Appeal and, subsequently (as a second level of appeal), to the Supreme Court, which only analyses questions of law.
There are no restrictions on the entry of foreign investments. All investors, regardless of their nationality, have the same rights and are subject to the same duties and obligations under the laws of Cabo Verde. A national partner is not required, and there are no limitations on the distribution of profits or dividends abroad.
The rules governing foreign investment are similar to those applicable to domestic investment. No special registration or notification to any authority regarding foreign investment is required. However, there may be mandatory registration/approvals for specific activities – such as in the banking, finance, aviation, maritime and telecommunications sectors – that are applicable for both foreign and domestic investment.
There are no restrictions on the entry of foreign investments, and the rules governing foreign investment are similar to those applicable to domestic investment.
See 2.2 Procedure and Sanctions in the Event of Non-compliance.
The law recognises the right of an investor to challenge any decision of the administrative authorities in court. The scope of the legal challenge depends on the nature of the decision by the administrative authority.
As a rule, the first instance court has a mandatory deadlines of three years to issue a decision.
The following types of company are the most relevant provided for in the Cabo Verde Companies Code and are frequently chosen by foreign investors aiming to start their own enterprise structure in Cabo Verde. The choice of one of these structures depends on many factors, such as the type of business to be implemented, the simplicity or size of the operations, the amount of capital to be invested, the possibility to transfer ownership freely and disclosure rules about the aforesaid ownership.
The most commonly used forms are public limited companies and limited companies, since they are more operational.
Public Limited Companies (Sociedade Anónima)
This type of company has the following characteristics.
A public limited company (sociedade anónima, or SA) is the form traditionally adopted by larger companies. It is primarily characterised by the fact that it has a more complex organisational structure than, for example, the limited company. The public limited company form also provides greater flexibility when it comes to share capital insofar as no special procedure is required for the transfer of shares.
Limited Companies (Sociedade por Quotas)
This type of company has the following characteristics.
The procedural steps to set up a company are as follows.
The ongoing reporting and disclosure obligations depend on the sector of activity of the company. Companies that operate in financial, banking, insurance and communications are subject to different levels of ongoing reporting and disclosure obligations.
Companies that are not subject to special legal regimes must report the following:
For a sociedade anónima, the management must be structured as a board of directors with a minimum of three members or an executive board of directors. Where the share capital does not exceed EUR90,691, the board of directors can be replaced by a single director.
For sociedades por quotas, management is discharged by one or more managers, who must be individuals, designated by the shareholders.
Directors can face civil and criminal liability.
Directors’ Civil Liability
Members of the board of directors can be held liable towards the company for damages caused by acts or omissions resulting from disrespect of their legal or contractual duties, unless the directors can prove that they did not act wilfully or maliciously.
As an expression of the business judgement rule, liability is waived if directors can prove that they acted in an informed manner, free of any personal interest and using the criterion of corporate rationality. A director who does not exercise the right of opposition conferred by law, when able to do so, will be jointly liable for the acts they could have objected to.
Directors are not liable towards the company if the act or omission is part of a resolution of the general meeting, even if that resolution is voidable. However, directors will not be released from liability on the favourable opinion or consent of the supervisory body.
Directors’ Criminal Liability
Under Cabo Verdean law, only crimes expressly provided for in the law can be punishable. Companies and individuals can be held criminally liable.
Directors can be liable for any action wilfully performed on behalf of the company, whenever such action qualifies as a crime and even if the relevant type of crime requires (to qualify as such) certain elements that can only occur in the company or if an agent acts in its own interest and the director acted in the company’s interest.
Misdemeanour Proceedings
Certain actions of the directors can qualify as misdemeanours and incur fines and accessory penalties applicable to the relevant agent (either a company or generally a director acting on behalf of the company).
The employment relationship is regulated by the Labour Code (Legislative Decree No 5/2007 of 16 October). Several other laws regulate important issues, such as work-related accidents and sickness.
Nevertheless, the parties may agree some special situation conditions for the employment relationship in employment agreements, provided they do not violate the Labour Code. It is also possible to have collective bargaining agreements with more favourable conditions for employees.
Civil servants or public employment relationships are subject to special regulation.
As a rule, no written document is required and the employment relationship can be proved by any means.
Some types of contract must be in writing – ie, fixed-term or part-time and certain top management contracts. The contract not being in writing does not render it invalid, but it can lead to the contract being requalified as a full-time, permanent contract.
The minimum and maximum working times are regulated by the Labour Code. The normal working period may not exceed eight hours per day and 44 hours per week, and a minimum of 12 consecutive hours of rest must be respected.
The Labour Code provides that, by a unilateral decision of the employer, a single schedule of seven hours of daily work may be established during the months of July to September, between 6am and 3pm on the same day. During daylight saving time, the employee shall be allowed an interval of not less than 15 minutes. The employer may also choose to maintain normal working hours by extending rest time between the morning and afternoon periods, but in such case the afternoon period may not pass 19:30 each day. As a rule, the daily working period shall be interrupted by an interval with a maximum duration of one hour so that the employee does not work more than five consecutive hours.
Overtime hours are also regulated by the Labour Code and are considered to be work outside the normal period of work to which the employee is bound and can only be done in the case of increases in work that do not justify the recruitment of other employees, in the case of force majeure, or where there are serious reasons that make it necessary to prevent serious harm.
The employment contract is extinguished by:
Mutual Agreement of the Parties
It is always lawful for the employer and the employee to terminate the employment contract by mutual agreement, which must be executed in writing. The parties are free to enter into an agreement with or without compensation and to fix the date of termination – ie, to establish that the termination will be immediate or in the future. However, if the parties intend to give immediate effect to the termination agreement, the employer shall agree compensation with the employee, taking into consideration the type and duration of the employment contract, remuneration and the possibility of finding a new job. The compensation to be agreed between the parties may be paid in cash or in goods, in a single instalment or in several instalments.
The employee can always claim cancellation of the agreement or any of its clauses, by judicial proceedings, if they consider that there has been an error, malicious act or coercion in its conclusion.
Expiry
The employment contract expires:
The expiry of the contract due to the expiry of the initial or renewal period gives the employee the right to compensation of the following amounts:
In undetermined-duration and fixed-term contracts with a duration of more than five years, the employee is entitled to compensation in the amount of ten days of basic remuneration for each full year after the first five years and one day of compensation for each month of duration of the contract up to one year.
Collective Dismissal
The employer may terminate the employment contracts of two or more employees on the grounds of reduced business or permanent closure of the company, establishment or part of the company structure for economic, conjectural or technological reasons.
The employer intending to make a collective dismissal shall communicate its intention in writing to the unions representing the employees. If the employees are non-unionised, the company shall directly notify the employees. The communication shall include the following information:
The employees covered by the collective dismissal are entitled to compensation, the amount of which depends on the date the employee was hired.
Individual Dismissal for Just Cause
Under certain circumstances, the employer can terminate the contract for just cause. The concept of just cause includes disciplinary dismissal and other forms of dismissal, provided that they are justified according to the law.
For dismissal based on unlawful conduct of the employee, the concept of just cause is the centrepiece of the matter and consists of the impossibility in practice of continuing the employment relationship due to the seriousness of the employee’s misconduct. When dismissed with disciplinary cause, the employee is not entitled to any compensation.
If the dismissal is not justified according to the law or if the employer does not comply with the proper proceeding, the termination of the contract can be considered null and void. The contract remains in force, which can lead to reinstatement or compensation.
Termination by the Employee
The employee may terminate the employment contract at any time without any reason or explanation, but is obliged to give prior notice to the employer, which varies between 15 days and two months depending on the duration of the contract.
The right to form an employee representative body in any company, regardless of its size, is guaranteed by the Cabo Verdean Constitution. The initiative depends completely on the employees, which means that employers are under no obligation to implement this form of representation.
Employees are subject to personal income tax (PIT) under two tax methods:
Employees are taxed according to category A (employment income), based on their residence or non-residence status. For PIT purposes, an employee is deemed resident in Cabo Verde if they:
Declarative Method
Under the declarative method, individuals are taxed according to their annual income statement. This method is mandatorily applicable to taxpayers taxed under category B (business and professional income) with standard organised accounting, and to taxpayers taxed under category C (rental income). This method is also applicable to dependent workers (category A) who opt to file their tax return on income obtained abroad by resident taxpayers, and on income obtained in Cabo Verde by non-resident taxpayers that could not be taxed at flat rates.
Income will be subject to taxation at rates ranging between 16.5% and 27.5%, as follows:
An exemption from taxation applies to net income of up to CVE220,000 annually.
Final Withholding Method
The final withholding method is used to collect taxes when taxpayers are not obliged to submit their annual income statement in the following cases.
Category A – employment and pensions
This income is generally subject to monthly withholding tax (WHT). Employment income is specifically defined in the PIT Code and covers all payments in connection with work (employment contract), such as salary, bonuses, commissions, pensions, allowances (eg, cost-of-living and housing allowances) and benefits in kind (eg, company cars), regardless of where the payment originates. Board members’ remuneration is taxed as employment income.
The following types of income are exempt from PIT:
As a rule, the monthly WHT is levied as final taxation, unless the taxpayer opts to file the tax return, in which case the tax withheld has the nature of an advance payment on account of the final annual income tax liability. The monthly tax withholdings due are calculated by applying the following progressive WHT rates and the corresponding deduction to the taxable income:
Employees and managers or directors of the company are liable to social security contributions of 8.5% on their gross remuneration. Employers are liable to social security contributions of 16% on the same gross remuneration received by employees and managers or directors of the company.
Category B – business and professional income
Business and professional income earned by individual entrepreneurs is taxed under the following regimes:
Business and professional income earned by individual entrepreneurs under standard organised accounting is subject to WHT at the rate of 20% as an advance payment on account of the final annual income tax liability.
Net income is computed under the rules applicable to companies, with the adjustments provided for in the PIT Code and subject to income tax at the PIT rates applicable.
Net income is computed according to the declaration-based method (método declarativo), where tax is levied on the aggregate base of the relevant income categories in the household minus personal deductions and allowances.
Under the PIT Code, a Single Act is considered a taxable operation performed twice during the tax year.
Category C – rental income
Rental income is subject to WHT at the rate of 20% as an advance payment on account of the final annual income tax liability.
To compute the net income, taxpayers may deduct maintenance and repair expenses of up to 30% of gross rental income.
Category D – investment income
In general, investment income is subject to a flat rate of 20%, although some exceptions apply:
• dividends are subject to a flat rate of 10%; and
• interest on bonds is subject to a flat rate of 10%.
A special tax regime contained in the Tax Benefits Code provides for an exemption from taxation on interest on term deposits received by Cabo Verdean emigrants; income derived from bonds or similar products (except debt securities listed in the securities market) obtained until 31 December 2017 benefits from a 5% flat rate; and dividends from shares listed in the stock exchange, placed at the disposal of their holders until 31 December 2017, are exempt from PIT.
Category E – capital gains
Capital gains earned by individual taxpayers are subject to a flat rate of 1% in the case of gains on the disposal of immovable property, intellectual property or shareholdings. A flat rate of 20% applies in the case of gains on gambling, lottery participation, betting, prizes awarded in sweepstakes or contests.
Cabo Verde’s corporate income tax (CIT), called imposto sobre o rendimento das pessoas colectivas, is levied on profits obtained within the Cabo Verdean territory and those obtained outside by resident companies (worldwide principle). Non-resident companies with a permanent establishment (PE) in Cabo Verde are also subject to CIT on Cabo Verdean-source income attributable to the PE.
Taxable profit is computed according to the local accounting rules and adjusted for tax purposes. For the purposes of determining taxable income, CIT payers can be taxed under two methods/regimes, as follows.
Resident companies are subject to a tax rate of 22%, where taxable income corresponds to the profit minus any tax benefits and any losses carried forward, as stated in the tax return. The tax rate of 22% is also applicable for PEs of non-resident companies.
Micro and small-sized companies are subject to a single special tax (SST) of 4% levied on the gross amount of sales obtained in each taxable year, to be paid quarterly. The SST replaces the CIT, fire brigade surtax and value-added tax (VAT), as well as the contribution to social security attributable to the company.
Non-resident companies without a PE are subject to WHT rates applicable for each income category stipulated in the Tax Code, which range between 1% and 20%. The CIT rate is increased by a fire brigade surcharge, called taxa de incêndio, of 2% on the tax due, leading to a final tax rate of 22.44%. This surcharge is levied in the municipalities of Praia (Island of Santiago) and Mindelo (Island of São Vicente).
Permanent Establishment
Non-resident companies deemed to have a PE in Cabo Verde are also subject to tax in Cabo Verde. Under Cabo Verdean tax law, a non-resident company is deemed to have a PE if one of the following applies:
A PE is also recognised in the case of:
A PE of a non-resident is taxed as a resident company.
Foreign Investor Status (Estatuto do Investidor Externo)
Foreign Investor Status was revoked by the New Investment Law effective as of 1 January 2013; it had previously granted some tax benefits at the level of the investor (eg, exemption from WHT on distribution of profits and on interest related to the financing of the investment). Those tax benefits already granted, or for which recognition has been requested prior to the entry into force of the Tax Benefits Code (TBC) and the Investment Code, are maintained. Investment projects submitted for analysis and approval to the competent authorities prior to the entry into force of the Tax Benefits Code continue to be regulated under the legislation in force at the date of their respective submissions.
Contractual Tax Benefits
There are exceptional incentives – regarding customs duties, CIT, PIT, property tax and stamp duty – for investments that fulfil all of the following conditions:
The concession of contractual tax benefits is subject to approval by the Council of Ministers upon agreement.
Differentiated Merit Projects (DMP)
DMP status was established by Law 80/IX/2020, of 26 March, and is granted to investments that cumulatively meet the following requirements, among others:
Investment projects with DMP status are granted the following benefits:
DMP investment projects implemented in municipal areas where the GDP per capita is lower than the national average have the following additional benefits:
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:
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 50% 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 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 Investment is the entity responsible for granting licences to operate within the IBC, upon previous proposal of the Zona Franca Comercial S.A. The following tax benefits are applicable to entities licensed to operate in the IBC on income from industrial or business activities and services (note that these tax benefits are not applicable to entities engaged in tourism, banking and insurance, real estate or construction).
CIT benefits
Reduced CIT rates of 5%, 3.5% or 2.5% are applicable to entities that create, respectively, ten, 20 or 50 jobs. The CIT rate is 2.5% in the case of the creation of four jobs for entities licensed to operate within the International Business Centre. Entities licensed to operate within the IBC are granted to benefit from reduced CIT rates until 2030.
Shareholders’ benefits
Shareholders of entities licensed to operate within the IBC are exempt from taxation on dividends and interest received.
VAT and customs duty benefits
All the exemptions contained in the VAT regulation and customs law apply. An exemption from customs duties applies with respect to certain goods, equipment and materials used within the scope of the activity developed and licensed under the IBC.
Maritime Transport (Tonnage Tax)
Cabo Verdean tax legislation contains a special regime for the assessment of the taxable profit applicable to maritime transport activities (tonnage tax).
Entities licensed in the IBC that carry out activities related to the international maritime transport of persons or goods may opt for a special regime for the assessment of taxable profit, provided that they fulfil the following conditions:
Under the tonnage tax regime, the taxable profit shall be determined by applying the following daily amounts to each eligible ship or vessel:
No tax credits are available.
If there is a change from the tonnage tax regime to the general CIT regime, the tax value of the assets held corresponds to the value resulting from the application of the general rules contained in the CIT Code, as if the taxpayer had not applied the special regime. In addition, tax losses or any tax credits carried forward originated during the taxable periods to which the special regime applied are disregarded.
Internationalisation of Cabo Verdean Companies
A regime that provides for tax and financial incentives for investment projects in order to promote the internationalisation of Cabo Verdean companies is in force.
The following incentives, to be granted under a contract of not more than three years, apply to internationalisation projects undertaken before 31 December 2020 by companies whose head office and place of effective management are in Cabo Verde.
CIT benefits
Investments that are eligible for the regime of tax benefits for internationalisation may benefit from:
In addition, a deduction for the creation of employment ranging between CVE26,000 and CVE35,000 for each new job created may apply.
IUP benefits
An exemption from IUP may be available on the acquisition of immovable property for the establishment or expansion of the activity of the investor.
VAT and customs duty benefits
Exemptions provided for in the VAT Code apply, as well as customs duties incentives as provided for in the general applicable legislation.
Stamp duty and other benefits
An exemption from stamp duty is available on the incorporation of companies or an increase of share capital of existing companies, and on financing transactions.
An exemption from notary and registration fees is available on the incorporation and registration of companies.
Touristic Utility Status (Estatuto de Utilidade Turística)
Cabo Verde may grant Touristic Utility Status to the following types of touristic projects:
Touristic Utility Status generally allows for the following tax incentives and benefits:
Tax Incentives for Renewable Energies
There is a regime for the promotion of independent production and self-production of electricity based on renewable energy sources. Water, wind, solar, biomass, biogas or industrial, agricultural or urban waste, oceans and tides, and geothermal are to be considered sources of renewable energy. Under the regime, renewable energy producers may benefit from the following.
CIT benefits
A CIT credit is available for up to 30% of the eligible investments made in renewable energies projects.
Customs duty benefits
A reduced rate of 5% of customs duties and other customs charges applies on the importation of capital goods, raw materials and supplies, finished and semi-finished products, and other materials that are incorporated or used in the production of goods or services involved in the production of electrical energy from renewable sources.
IUP and stamp duty
Exemptions from IUP and stamp duty are granted on the acquisition of immovable property and other assets related to the investment project or its financing.
Interest rate support for micro production of renewable energies
Interest rate support of 50% is granted on the interest on loans borrowed from financial institutions by families and by duly incorporated micro and small companies for the acquisition of equipment and installation services aimed at the micro production of renewable energy in accordance with the applicable legislation. This support shall apply to final consumers covered by the normal low voltage category.
Shipping Transport Industry Incentives
CIT benefits
A CIT credit is available for up to 30% of the eligible investments made in shipping, air and sea transportation projects.
Customs duty benefits
A reduced rate of 5% from customs duties applies on the importation of shipping material for the maintenance, production and repair of shipping and respective equipment.
IUP and stamp duty
Exemptions from IUP and stamp duty are granted on the acquisition of immovable property and other assets related to the investment project or its financing.
Job Creation Incentives
Entities taxed under the verification method are entitled to deduct the following amounts for each permanent job created:
Taxpayers covered by the organised accounting regime shall be entitled to a tax credit of CVE20,000 for each unemployed person hired for a minimum of 12 months. Taxpayers as well as individuals taxed under the organised accounting regime may benefit from a tax credit amounting to CVE20,000 for each trainee hired for a minimum of six months.
Media, Telecommunications and the Internet
The importation of goods, materials, equipment, vehicles and other equipment exclusively for the purpose of telecommunications and media is exempt from customs duties.
Incentives for the Importation of Vehicles
Exemptions from customs duties, excise duty and VAT are granted on the following:
The above incentives shall not apply to vehicles aged more than six years, nor to the import of heavy passenger vehicles for the collective transport of passengers, duly equipped, comprising more than 30 seats, including driver, intended for exclusive transport of tourists and baggage, when imported by companies holding a licence and a tourist transport permit.
Incentives Under the Young Start-Ups Programme
Incentives for corporate finance
Resident or non-resident entities with a PE in Cabo Verde that make cash capital contributions to companies eligible under the Young Start-Ups Programme, or to companies based in municipal territories where the average GDP per capita in the last three years is below the national average, as well as to micro and small companies, can deduct part of these contributions up to 2% of the tax assessed in the previous tax year, provided that:
The deduction cap shall apply even if the company makes capital contributions in more than one eligible company. This benefit is not cumulative with the tax benefit regarding the conventional remuneration of share capital.
Other incentives
The following incentives are applicable to entities that carry out, directly and as their main activity, an economic activity eligible under the Young Start-Up Programme, approved by Resolution No 34/2017 of 25 April.
Eligible companies whose places of effective management are located outside the municipalities of Praia, São Vicente, Sal and Boa Vista shall benefit from a tax credit of 50% of the CIT assessed (not applicable to ICT and R&D activities). Eligible companies shall benefit from the incentives provided for in Article 13 (exemption from property tax), Article 15 (exemption from customs duties) and Article 332 (training, internships and scholarships) of the Tax Benefits Code, and from the incentives for employers hiring young people.
Eligible companies benefiting shall be subject to the payment of autonomous taxation under the general terms contained in the CIT Code.
Incentives for Electric Mobility
The importation of electric vehicles, including two-wheel vehicles, is exempt from VAT and excise duties. The exemption also applies to the importation of new rechargeable batteries for electric vehicles, including their connectors, shields, connecting cables and meters, intended exclusively for charging.
Parking fees for such electric vehicles are also exempt from VAT.
Fishing Licence Exemption
An exemption is granted from the payment of fees in obtaining fishing licences for boats up to five tons registered in the National Vessel Registration System if the holder has more than one boat.
Tax Benefits Regarding the Recovery of Business and Insolvency Code
There are CIT, PIT, stamp duty and property tax benefits for companies under recovery of business and insolvency procedures.
Foreign Tax Credit
Cabo Verdean tax law allows a foreign tax credit to mitigate the double taxation on foreign income taxed in another jurisdiction. The tax credit is equal to the lesser of (i) the income tax paid abroad or (ii) the CIT fraction calculated before the deduction is given, corresponding to incomes that may be taxed in the country concerned, net from any costs or losses, directly or indirectly incurred, for the purposes of its realisation. Foreign tax credit cannot exceed the tax outlined in the tax treaty, if applicable.
There is no special tax consolidation regime for companies in Cabo Verde.
There is a limitation on the tax deductibility of net financing expenses, which are only deductible up to the higher of the following limits:
There is a transfer pricing regime that establishes that commercial transactions between associated enterprises should be subject to identical terms and conditions to those that would be accepted and agreed between independent entities (the arm’s-length principle).
Taxpayers must keep information and documentation regarding their transfer pricing policies on hand. The following taxpayers must prepare a transfer pricing documentation file:
Cabo Verdean law provides for anti-evasion rules.
In Cabo Verde there is a Competition Authority (AdC), which regulates or controls mergers between companies or entities.
Certain sectors also have specific entities that may regulate certain operations, as follows:
Mergers that meet the criteria set out in the Cabo Verde Competition Act are subject to prior notification to AdC.
See 6.2 Merger Control Procedure.
See 6.2 Merger Control Procedure.
A patent is an exclusive right that can be granted to any type of invention in any field of technology, whether it is a product or a process, or to new processes for obtaining products, substances or compounds that already exist. There are three patentability requirements in the Industrial Property Code (IPC): novelty, inventive step and industrial application.
The patent shall confer the exclusive right to use the invention anywhere in the national territory, and shall also confer on its owner the right to prevent third parties from manufacturing, offering, stocking, trading or using the product that is the subject of the patent without their consent and from importing or holding it for any of these purposes.
The registration of a patent is filed with the Institute of Quality Management and Intellectual Property (IGQPI).
Generally, patent rights will be enforced and invalidated before the First Instance Courts. Whoever illegally violates the industrial property rights of another person, with criminal intent or by mere blame, must pay compensation to the injured party for the damages resulting from the violation. For this purpose, the IP right holder must prove the causality of the infringement for the damages calculation. The injured parties can also resort to criminal courts for criminal cases.
The length of protection is 20 years.
Trade marks are signs used in trade to identify products and services, and can consist of a sign or set of signs capable of being represented graphically – ie, words, including names of people, designs, letters, numbers, sounds, the shape of the product or its packaging. A trade mark may also consist of advertising slogans for goods or services to which they refer, irrespective of copyright protection afforded to them, provided they are of distinctive character.
The registration of the trade mark grants the right holder the ownership and exclusive use of the trade mark for the products and services that it designates.
The registration of a trade mark is filed with the IGQPI.
Generally, trade mark rights will be enforced and invalidated before the First Instance Courts. Whoever illegally violates the industrial property rights of another person, with criminal intent or by mere blame, must pay compensation to the injured party for the damages resulting from the violation. For this purpose, the IP right holder must prove the causality of the infringement for the damages calculation. The injured parties can also resort to criminal courts for criminal cases.
Protection lasts for ten years from the date of the respective concession, and can be indefinitely renewed for equal periods.
A design shall mean the ornament or aesthetic aspect of an article, including the appearance of the whole, or part, of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product itself and its ornamentation. Designs that are contrary to public order, public health or morality may not be registered.
The registration of an industrial design is filed with the IGQPI. The scope of the protection conferred by the registration shall cover all designs that do not give a different overall impression to an informed user. Registration of a design shall confer on its holder the exclusive right to use it and prohibit its use by third parties without their consent, if such acts are carried out for commercial purposes.
Generally, industrial design rights will be enforced and invalidated before the First Instance Courts. Whoever illegally violates the industrial property rights of another person, with criminal intent or by mere blame, must pay compensation to the injured party for the damages resulting from that violation. For this purpose, the IP right holder must prove the causal relationship between the infringement and the injury for the damages calculation. The injured parties can also resort to criminal courts for criminal cases.
Copyright is defined as the exclusive right of authors of literary, artistic and scientific works to enjoy, use and exploit such works or to authorise their enjoyment, use or exploitation by third parties, either in whole or in part. Copyright shall comprise economic rights and personal rights, with the latter being known as moral rights. As a rule, copyright is recognised regardless of registration of the work, its deposit or any other formality.
Copyrighted works are enforced before the First Instance Courts. If the right holder has their right infringed, they can request compensation. Whoever illegally violates the copyright of another person, with criminal intent or by mere blame, must pay compensation to the injured party for the damages resulting from the violation. For this purpose, the copyright holder must prove the causality of the infringement for the damages calculation. The injured parties can also resort to criminal courts for criminal cases.
Non-patrimonial damages may also be compensated if caused by the infringer’s acts.
Generally, protection is for the lifetime of the author plus 50 years following their death, even if it is a posthumous work. The length of protection for copyright in works of photography or applied arts is 25 years after such works are produced.
Software, databases and trade secrets are protected under the regime of industrial and intellectual rights.
In Cabo Verde, the personal data protection legislation currently in force is the Constitution of the Republic of Cabo Verde and Law 133/V/2001, of 22 January.
The Constitution establishes that all citizens shall be guaranteed the right to personal identity, the development of personality and civil capacity, which may only be limited by a judicial decision and in the cases and terms established in the law, and that all citizens shall have the right of access to computerised data that affects them and for the same to be rectified and updated, as well as the right to be informed about the purposes of the data, in the terms of the law.
The Constitution also grants the right of habeas data to ensure knowledge of the information contained in files, computer archives and registers that affect subjects, and to be informed about the purposes of the data and for the same to be rectified or updated.
Law 133/V/2001, of 22 January, establishes the general legal framework for the protection of individuals with regard to the processing of personal data. It applies to the processing of personal data wholly or partly by automated means, and to the processing of personal data other than by automated means contained in manual files or part of manual files. The law shall also apply to the processing of personal data carried out:
Law 133/V/2001, of 22 January, applies in an international context where there are any international treaties in place.
The competent authority is the Comissão Nacional de Protecção de Dados (the National Commission of Data Protection, or CNPD), which is an independent administrative entity that exercises its authority throughout the national territory.
Generally, the CNPD is the national authority endowed with the power to supervise and monitor compliance with the laws and regulations in the area of personal data protection, with strict respect for human rights and the fundamental freedoms and guarantees enshrined in the Constitution and the law.
Some reforms are expected in relation to the Recovery of Business and Insolvency Code.
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jacorreia@raposobernardo.com www.raposobernardo.comCabo Verde – a Diversified Economy
Cabo Verde is an archipelago situated off the coast of West Africa and has witnessed significant economic growth and development in recent years. This article explores the trends and developments shaping the economy of Cabo Verde, highlighting key sectors, policies and opportunities that will drive the future of the country in the coming years.
Tourism
One of the primary drivers of Cabo Verde's economy is its thriving tourism sector, with the country's pristine beaches, rich cultural heritage and stable political environment attracting a growing number of international visitors. Huge investments in infrastructure development, including hotels, resorts and transportation networks, are supporting the industry. As a result, tourism has become a major source of revenue and employment, stimulating economic growth across various sectors. It is therefore natural that tourism continues to lead the process of transformation and development in Cabo Verde.
Energy
Cabo Verde has embraced renewable energy as a strategic focus to address its energy challenges. The archipelago's geographical location offers abundant wind and solar resources, making it an ideal candidate for renewable energy projects. The government has set ambitious goals to achieve a significant share of the country's energy consumption from renewable sources. Investments in wind farms, solar power plants and energy storage infrastructure have bolstered the country's energy independence, reduced reliance on fossil fuels, and attracted international investors.
Blue economy
Special attention should also be paid to the strong commitment that has been made to promoting the blue economy in Cabo Verde. Cabo Verde's geographical location in the Atlantic Ocean provides immense potential for the development of its blue economy. The country aims to leverage its vast marine resources, including fisheries, aquaculture and maritime activities, to drive economic growth and job creation. Sustainable fishing practices, marine research and coastal tourism are among the key areas receiving attention. The government's focus on blue economy initiatives aims to harness the economic potential while preserving the marine ecosystem and promoting sustainability.
Cabo Verde is increasingly exploring the potential of aquaculture to diversify its seafood production and reduce dependence on traditional fishing practices. Support and incentives for the development of sustainable aquaculture projects are being provided, including the establishment of hatcheries and the promotion of responsible farming practices.
Investments in marine research and innovation have become another crucial trend in Cabo Verde's blue economy. The country is actively partnering with international organisations, research institutions and private entities to enhance scientific knowledge and explore untapped resources.
Cabo Verde's coastal areas offer tremendous potential for tourism and maritime activities. Investments in developing coastal tourism infrastructure, including marinas, cruise ship terminals and water sports facilities, are serving to attract tourists interested in water-based activities such as diving, sailing and fishing. Maritime activities such as ship repair, marine transport and offshore services are also gaining attention, contributing to job creation and revenue generation.
Cabo Verde is also exploring the potential of blue biotechnology, which involves utilising marine resources for medical, pharmaceutical and biotechnological applications. The country's unique marine biodiversity holds promise for the discovery of novel bioactive compounds and therapeutic agents.
Digital
Another important development sector on the rise in Cabo Verde is the digital sector, which has been experiencing significant growth and development in recent years. All economic operators and public entities have recognised the potential of digital technologies and implemented various initiatives to promote expansion of the digital sector.
The country has made efforts to improve its digital infrastructure to support the growth of the sector. Investments have been made to expand broadband connectivity and enhance the quality and coverage of internet services across the archipelago. This includes the deployment of submarine cables, the expansion of 4G and 5G networks, and the establishment of data centres to facilitate the storage and processing of digital information.
Cabo Verde has been actively digitising its government services to enhance efficiency, transparency and citizen engagement. The government has implemented various e-government initiatives, such as online portals for business registration, tax payments and public service interactions. This trend aims to streamline administrative processes, reduce bureaucracy and improve service delivery to both citizens and businesses.
Likewise, the country has seen the emergence of a vibrant start-up ecosystem, with a focus on technology-driven innovation, with programmes and initiatives to support entrepreneurship and nurture the growth of tech start-ups. Incubators, accelerators and funding schemes have been established to provide support, mentorship and resources to start-ups in the digital sector. This trend is promoting job creation, fostering innovation and attracting investment in the technology industry.
The growth of e-commerce and digital payments is gaining momentum in Cabo Verde, with the government implementing regulations and frameworks to facilitate online transactions and protect consumers' rights. Local businesses are increasingly adopting e-commerce platforms to expand their reach and tap into both domestic and international markets. Digital payment solutions, such as mobile money and electronic wallets, are also becoming more prevalent, providing convenient and secure payment options for consumers.
The country's tourism sector has embraced digital platforms, social media and online travel agencies to reach a wider audience and engage with potential visitors. This trend includes the use of virtual reality (VR) and augmented reality (AR) technologies to provide immersive experiences and showcase the country's natural beauty and cultural heritage.
There is a clear focus on diversifying the economy through its focus on tourism, renewable energy, blue economy, digital services and infrastructure development. Cabo Verde is well positioned to further strengthen its economy and improve the standard of living for its citizens in the years to come.
Tax Measures
In order to facilitate and attract investments in Cabo Verde, several new tax measures were established in the 2023 State Budget Law, the most important of which are set out below.
Research and development (R&D) tax incentives for companies
Cabo Verdean tax resident companies carrying out commercial, industrial or agricultural activities, and non-resident companies with a permanent establishment in the Cabo Verde territory, are allowed to deduct the value of eligible expenses incurred in R&D from the corporate income tax (CIT) due, up to the respective amount, in a double percentage as follows.
Expenses that cannot be deducted in the tax year they were incurred, due to insufficient tax being due, can be carried forward for ten years.
Eligible taxpayers
The CIT deduction is available to taxpayers that:
Covered R&D expenses
For the purposes of the regime, research expenses are those incurred by the taxpayer in the pursuit of acquiring new scientific or technical knowledge. Development expenses are those incurred by the taxpayer through the exploitation of results from scientific work or other scientific or technical knowledge, aimed at finding or improving raw materials, products, services or manufacturing processes in a substantial manner.
Eligible expenses
Among other expenses, the following are eligible if they are related to R&D activities:
Expenses incurred in projects carried out exclusively by third parties through R&D contracts and the rendering of services are excluded from eligibility.
R&D activities related to the ecological manufacturing of products are allowed an additional 30% deduction.
The regime applies until 2038.
Incentive for the reinvestment of profits
An exemption from CIT applies on profits reinvested by technological-based companies duly authorised to operate in the Special Economic Area for Technologies (Zona Económica Especial para Tecnologias or ZEET). This includes any company carrying out R&D activities, either internally or in association with third parties, aimed at creating new or improved products, services and processes.
The following are eligible as technological-based companies:
Special Economic Zone of the Island of Maio
Law 11/X/2022, of 6 June regulates the Special Economic Zone of the Island of Maio in Cabo Verde (Zona Económica Especial da Ilha do Maio or ZEEIM). It establishes the ZEEIM, containing the legal framework for its implementation, organisation, development and functioning. It also establishes the tax and customs benefits regime applicable.
The ZEEIM includes a designated geographic area in the Island of Maio, comprising the Integrated Development Tourist Zones (Zonas de Desenvolvimento Turístico Integrado or ZDTI) in the south part of Maio village, and in Ribeira Dom João and Pau Seco, as well as all areas in which related production facilities are built.
The following entities are entitled to the ZEEIM regime:
The eligible activities include agricultural activities, manufacturing industry, transport, telecommunications, computer consultancy, management consultancy, legal and accounting, and head office activities. Once approved by a separate diploma, the leasing of intellectual property and similar products may also become eligible activities.
The ZEEIM comprises several tax and customs benefits, which do not apply to activities carried out by licensed legal and natural persons outside the geographic area of the ZEEIM; these shall be subject to the general rules applicable.
Corporation income tax (CIT or IRPC)
Legal persons and branches duly registered in the ZEEIM are entitled to reduced IRPC rates, depending on the number of jobs created (excluding part-time work), as follows:
Personal income tax (PIT or IRPS)
Natural persons eligible under the ZEEIM are entitled to reduced IRPS rates, as follows:
The reduced IRPS rate depends on the payment of an annual single fee of EUR10,000.
Non-resident benefits
Non-resident legal and natural persons are exempt from taxation on income obtained in the ZEEIM, as follows:
The above exemption has the following requirement:
Any other income obtained in the ZEEIM by non-residents is subject to taxation in Cabo Verde under general terms.
Value-added tax (VAT) and excise duties
An exemption from VAT and excise duties applies to legal persons and branches registered in the ZEEIM, as well as to natural persons resident in the ZEEIM that have paid the annual single fee. The exemption applies on the importation of goods and services to be utilised and consumed within the tax-free zone and the tax-free shops in the ZEEIM.
The above exemption applies only to the acquisition of goods to be utilised and consumed within the tax-free zone and the tax-free shops in the ZEEIM for natural persons who are not resident in the ZEEIM and that have not paid the annual single fee.
Property taxes
Legal persons and branches registered in the ZEEIM, as well as natural persons resident therein, are exempt from property taxes on the acquisition and maintenance of the ownership (or other rights) of property located in the ZEEIM.
Stamp duty
Legal persons and branches registered in the ZEEIM, as well as natural persons resident therein, that carry out activities in the ZEEIM are exempt from stamp duty. The exemption does not apply to entities that are regarded as resident in Cabo Verde under general terms.
Customs duties
Legal persons and branches registered in the ZEEIM, as well as natural persons with investment therein, are exempt from any taxes, fees or charges on the importation of any goods that are necessary to carry out the eligible activities, within the context of their respective construction, installation and maintenance.
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