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| Buyer Guides > Cape Verde |
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Buyer Guide | FAQ | Taxes
 Buyer Guide
Searches
Your lawyer will carry out land searches at the local Municipal Authority and Land Registry Offices. These reveal whether there are charges registered against the property or any restrictions on the title. The existence of a valid habitation permit is a precondition for a valid conveyance of built property to take place in Cape Verde.
Documentation
The lawyer will obtain the following documents for you:
- the Certidao do Registo Predial (the land registry certificate)
- Planta de Localizacao (the official map showing the property's exact location)
- "Certidao Matricial" (the tax information certificate).
- If the property is not registered, it is necessary to obtain a Certidao pela negativa (a certificate confirming that the property in not registered in anyone's name). A Certidao matricial para o efeito (which is a tax certificate confirming this). With these two documents, it will be possible to register the property.
He or she will also ask the vendor to produce evidence of payment for any bills such as electricity and other services and check that they have been paid.
Power of Attorney
You will probably need to give your lawyer Power of Attorney so he can represent you when the promissory contract and deed are signed and also to request the necessary tax cards on your behalf. This will have to be done in Portuguese but you should request a copy in your own language. This will have to be signed before a Notary and legalised by the Cape Verde Honorary Consul in Liverpool.
Your lawyer will obtain a tax card on the purchaser’s behalf.
 The Promissory Contract of Purchase and Sale
Signing the Promissory Contract of Purchase and Sale - Contrato Promessa de Compra e Venda is the next step.
At this stage the purchaser is normally expected to pay the deposit, which is negotiable (10% or lately 30% is common practice).
In Cape Verde, the parties are contractually bound once this Promissory Contract of Purchase and Sale is signed. This sets out the terms of the transaction (property details, price, method of payment, completion date, warranties, penalties, etc.). This contract should be signed before a notary public in Cape Verde. Until this contract is exchanged, the vendor is not committed and can change his mind.
Transfer tax or IUP tax is due at this point.
Deed of Conveyance – “Escritura”.
The final Deed of Conveyance called the "Escritura" has to be signed before a notary public in Cape Verde. This is the document that gives the purchaser complete title to the Property. The signing of the deed must be scheduled with a minimum of 30 days' notice.
Registering the Property
The purchase will have to be registered at the local Land Registry and also the local municipal authority. In Cape Verde, subsequent to the signing of the deed, the notary will prepare and send a report to the local municipal authority regarding the transaction.
The municipal authority will then update their records and register the new ownership of the property. Notary, registration fees and stamp duty are usually around 2.5% of the property’s value. These are payable on signing the Deed of Conveyance.
Services
A contract will need to be signed with the providers of services e.g. water, gas and electric. Your lawyer can arrange this if necessary. It is also advisable to arrange for final meter readings to take place prior to completion.
FAQ
Can foreign nationals own property in Cape Verde?
Yes, foreign nationals are free to purchase property in Cape Verde. The Islands positively welcome foreign investment as a means to create a sustainable growing economy through job creation and resulting capital revenues.
Cape Verde welcomes private foreign investment as a way to create a sustainable growing economy through job creation and capital investment and thereafter through the collection of tax revenues.
 Why should I choose Cape Verde?
Because today Cape Verde is one of the top investment hotspots of the world, it is currently undergoing huge development in its tourist infrastructure.
Property prices are currently very low and are sure to appreciate as Cape Verde begins to establish itself as a top international holiday destination with direct flights from the UK set to start in 2006.
The 'Lei de Investimento Externo' ('External Investment Law'), introduced in 1993 includes a 5-year initial tax holiday to foreigners purchasing property in Cape Verde, and a subsequent tax reduction of 50% on corporate tax (currently 30%) for the following 10 years. These incentives can be extended indefinitely, so long as adequate re-investment is made.
If you invest in tourism, an exemption is also granted on import duties for materials necessary for construction and installation of projects. All net revenues are guaranteed full transference out of Cape Verde and foreign currency bank accounts are widely available.
What is the economic and political situation?
Currently on the brink of an economic boom, Cape Verde is investing heavily in tourism, creating a perfect environment for profitable returns on investment within this emerging market. A healthy tourist industry is regarded as the main driving force for economic development and investment potential.
According to the United Nations Development Programme, in 2003 and 2004, Cape Verde was a middle-income country, with the fourth highest Human Development Index (which takes into account various factors, such as GDP per capita, life expectancy, adult literacy, education etc.) of all African nations behind only the Seychelles, Mauritius and Tunisia.
The National Development Plan (NDP) in areas such as transportation (air, maritime, inter-island and road) as well as communication, banking, health, electricity, water, sanitation provision and professional training are being developed and these further increase investor confidence in Cape Verde and boost economic growth.
Cape Verde continues to be one of Africa's most stable democratic governments.
Cape Verde supports macroeconomic and reform policies recommended by the IMF and the World Bank. Policies are in place to control public spending, reduce domestic debt, privatize companies and improve social services. All political parties are determined to attract foreign private investment, particularly to the development of the tourism sector.
 How do we travel to Cape Verde?
The easiest way to get to Cape Verde is via Lisbon airport in Portugal and then directly to Sal or Santiago. There are many airlines now offering daily flights to Lisbon not only via the major airports but also through many of the smaller “local” airports.
Travel to the other islands can then be via daily flights or ferry.
November 2006 will see direct flights from UK airports initially starting from Birmingham. In addition, there will be an 'Open Skies' policy allowing other airlines to fly to Cape Verde and forcing lower air fares through competition.
With the opening of the new international airport in the Capital Praia, on the largest island of Santiago, Cape Verde is experiencing the dawn of a bright future in tourism for the Islands.
What is the direct flying time from UK to Cape Verde?
Cape Verde is approximately 5 ½ hours flight from the UK and investors will be taking full advantage of the new direct flights due to be available from the UK in November 2006.
Is a visa required to enter Cape Verde?
Most visitors to Cape Verde require a visa. The process is very simple and you will require:
- valid passport
- 2 x photographs
- copy of the reservation of a return flight
- copy of the reservation of accommodation
Visas are valid for 180 days after the date of issue and can be granted for a maximum stay of 90 days. Applicants are able to apply for either a single or multiple entry visa. Although fees do fluctuate slightly from time to time, the cost of a single entry visa is approximately 40€, while those requiring a multiple entry visa will be charged approximately 75€.
Application forms can be obtained through Cape Verdean Embassies or Consulates and, once completed and returned, a visa will normally be issued within 24 hours. Travellers from countries in which there is no Cape Verdean Embassy can obtain visas via a reputable Visa Agency or may apply for a visa upon arrival at Sal Airport
You will not require a visa if you are:
- nationals of ECOWAS countries (Economic Countries of West African States), Angola and South Africa.
- former nationals of Cape Verde, their spouses and children.
- those continuing their journey to a third destination and who, upon arrival in Cape Verde, will not be leaving the airport.
Taxes
When you sell property in Cape Verde there are no property taxes to pay. However property purchase is subject to the following taxes:
Cape Verde - Transfer Tax
This is charged at a flat rate of 3% of the property value and is paid prior to the signing of the deed of purchase and sale.
Cape Verde - Holding Property / Annual Rates
This tax is charged at a flat rate of 3% on 25% of the value of the property and is paid annually every April (or in two installments in April and September).
Cape Verde - Capital Gains Tax
- Capital gains on plots for construction are taxable if their sale value exceeds a 100% increase of the value at which they were initially purchased.
- Capital gains on any other property sale are taxable if their sale value exceeds a 30% increase on the value at which they were initially purchased. The capital gain is taxed at a flat rate of 3% and is payable within 30 days of the deeds, together with the submission of a "Declaracao de Mais Valias" (Capital Gains Statement)
Cape Verde - Inheritance/Gift Tax
Any inherited or gift property is taxed at a flat rate of 3% on the attributed value of the property. For more detailed tax information, please contact us and speak with a specialist Cape Verde advisor. |
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