Verified Facts
Doing business in Cabo Verde is relatively easy, with the country ranking 73rd in the World Bank's Ease of Doing Business Index, making it an attractive destination for foreign investors and entrepreneurs.
Quick Facts
Business Environment
Cabo Verde has a relatively stable and business-friendly environment, with a government that is actively seeking to attract foreign investment and promote economic growth. The country has a strong tradition of democracy and the rule of law, which provides a solid foundation for businesses to operate. However, the bureaucracy can be slow and cumbersome, and corruption is still a challenge, although the government has made efforts to combat it. The country's strategic location off the coast of West Africa, with access to both the European and American markets, makes it an attractive hub for trade and investment.
The government of Cabo Verde has implemented various reforms to improve the business environment, including the creation of a one-stop shop for businesses and the simplification of procedures for starting a business. Additionally, the country has a relatively low level of debt and a stable currency, which reduces the risk of doing business. However, the country's small size and limited market can be a challenge for businesses looking to expand.
Overall, Cabo Verde offers a unique combination of stability, natural resources, and strategic location, making it an attractive destination for businesses and investors. The government's efforts to improve the business environment and attract foreign investment have been successful, with the country experiencing significant economic growth in recent years.
Starting a Business
Starting a business in Cabo Verde requires several steps, which are outlined in the table below:
| Step | Requirement | Time | Cost (USD) |
|---|---|---|---|
| 1 | Obtain a business license | 10 days | 100 |
| 2 | Register with the tax authority | 5 days | 50 |
| 3 | Obtain a social security number | 5 days | 20 |
| 4 | Open a bank account | 10 days | 100 |
| 5 | Register with the chamber of commerce | 5 days | 50 |
| 6 | Obtain any necessary permits | 10-30 days | 100-500 |
| 7 | Register with the labor authority | 5 days | 20 |
Investment Opportunities
Cabo Verde offers a range of investment opportunities across various sectors, including:
| Sector | Opportunity | Growth Potential | Notes |
|---|---|---|---|
| Tourism | Development of new hotels and resorts | High | Government incentives available |
| Fisheries | Investment in fishing vessels and processing facilities | Medium | Significant potential for export |
| Renewable Energy | Development of wind and solar power projects | High | Government support for renewable energy |
| Agriculture | Investment in irrigation systems and farm equipment | Medium | Significant potential for export |
| IT | Development of IT infrastructure and services | High | Growing demand for IT services |
| Manufacturing | Investment in manufacturing facilities | Medium | Significant potential for export |
Foreign Direct Investment
- FDI inflows to Cabo Verde have been increasing in recent years, with a total of $102 million in 2020.
- The main investing countries are Portugal, China, and the Netherlands.
- The government offers various incentives to attract FDI, including tax exemptions and subsidies for investment in priority sectors.
- Restricted sectors for FDI include defense and security, and foreign investment in these sectors requires special permission from the government.
- The government has established a one-stop shop for foreign investors, which provides support and guidance on the investment process.
Legal & Regulatory Framework
- The business laws in Cabo Verde are based on the Portuguese civil code and are relatively straightforward.
- Intellectual property protection is in place, with laws governing patents, trademarks, and copyrights.
- Labor laws are relatively flexible, with a minimum wage and maximum working hours.
- Dispute resolution is available through the courts or arbitration.
- The government has established a regulatory framework for key sectors, including tourism and renewable energy.
- The country is a member of the World Trade Organization (WTO) and has signed several trade agreements, including the Economic Partnership Agreement (EPA) with the European Union.
Challenges & Risks
- The country's small size and limited market can be a challenge for businesses looking to expand.
- The bureaucracy can be slow and cumbersome, which can delay business operations.
- Corruption is still a challenge, although the government has made efforts to combat it.
- The country is vulnerable to climate change, which can impact key sectors such as tourism and agriculture.
- The economy is heavily dependent on foreign aid and remittances, which can make it vulnerable to external shocks.
- The country has a relatively high level of debt, which can limit its ability to invest in key sectors.
Free Zones & Incentives
- The government has established two special economic zones, one in the port city of Mindelo and the other in the capital city of Praia.
- The zones offer tax incentives, including exemptions from corporate tax and value-added tax.
- The government also offers subsidies for investment in priority sectors, including renewable energy and tourism.
- The country has established an investment promotion agency, which provides support and guidance to foreign investors.
It is essential to conduct thorough research and due diligence before investing in Cabo Verde, as the business environment can be challenging. However, with the right support and guidance, the country offers significant opportunities for growth and returns on investment.
[RATING] 4/5
The country's stable economy, strategic location, and business-friendly environment make it an attractive destination for foreign investors. However, the small size of the market and the bureaucracy can be challenges. Overall, Cabo Verde offers a unique combination of opportunities and challenges, and investors who are willing to take the time to understand the market and navigate the bureaucracy can reap significant rewards.