Transparency of the Regulatory System
Cabo Verde is a model for much of Africa because of its transparency and good governance. The government is committed to improving the conditions for foreign investment and to encouraging a more transparent and competitive economic environment. In 2017, Cabo Verde ranked 48th on Transparency International’s Corruption perception index, second among African nations, trailing only Botswana.
Laws to promote exports, incentives to export, and free-zone enterprises stress the commitment of the government to encourage investment in export-oriented industries. The tax regime encourages entrepreneurial activity, and government policies support free trade and open markets. Although bureaucratic procedures have been simplified in a number of cases, there is still room for improvement. CI is the one-stop shop for external investors.
The Investment Law - Law n. 13 / VIII / 2012 of 11 July 2012 - establishes the general basis for accelerating and facilitating investment in Cabo Verde, as well as the rights, guarantees, and incentives to be granted to investments. These laws establish the principle of equal treatment for both national and foreign investment and confirm the government’s commitment to the creation of a dynamic business environment. The Industrial Development Statute regulates the granting of incentives and simplifies the investment approval process.
In addition, the code for Fiscal Benefits, Law no. 26 / VIII / 2013, January 21 and the amendments made by Law 102 / VIII / 2016 of January 6 and by the State Budget for 2017 establish the principles and rules applicable to tax benefits, establish the content, and set the corresponding rules for granting and monitoring
The following is the government official register site for the entity responsible for the official publication of all approved laws: https://kiosk.incv.cv/.
Laws on economic activity sectors can also be consulted on the following websites:
In Cabo Verde there is free access to all laws through the Government Official Register Site.
International Regulatory Considerations
Cabo Verde is a member of UNCTAD’s international network of transparent investment procedures [http://caboverde.eregulations.org/]. Foreign and national investors can find detailed information on administrative procedures applicable to investment and income generating operations including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures.
In January 2008, four years after the United Nations Resolution 59/210 recommendation, Cabo Verde graduated from Least Developed Country status to Lower Middle Income Country status. On May 26 of the same year, five months after the World Trade Organization (WTO) approved its application, Cabo Verde’s legislature unanimously ratified the agreement and formally acceded to the WTO. Cabo Verde has not notified the WTO of any measures that are inconsistent with its TRIMS obligations.
Legal System and Judicial Independence
Cabo Verde was a Portuguese colony until 1975; consequently, its legal system is based on the civil law system of Portugal, and it has systematic codification of its general law. The 1992 constitution provides for a judiciary independent from the executive branch. The judicial system is composed of the Supreme Court, the Constitutional court, and the regional courts. There is no interference from the government, and judges cannot be affiliated with political parties.
The Supreme Tribunal (Court) of Justice has a minimum of five members, one appointed by the president, one appointed by the National Assembly, and three appointed by the Supreme Council of Magistrates. The Ministry of Justice and Labor appoints local judges. The judiciary generally provides due process rights; however, the right to an expeditious trial is constrained by a seriously overburdened and understaffed judicial system. Criminal defendants are presumed innocent and have the right to counsel, to a public, non-jury trial, and to appeal. Cabo Verde has modern commercial and contractual laws. Cases brought to court often linger for years.
The right to private ownership and establishment is guaranteed under the constitution. Property rights are recognized and guaranteed by several Cabo Verdean laws, as well as by the constitution. There is a legal entity that records secured interests in property, both chattel and real estate. The legal system also protects and facilitates acquisition and disposition of all property rights.
The judicial system in Cabo Verde is widely seen as transparent and independent. There is no government interference in the court system, but judicial decisions are often delayed by years.
Laws and Regulations on Foreign Direct Investment
Foreign investment is regulated by the Cabo Verde Investment Law (Decree-Law No. 13/VII/2012) and the Law of Industrial Development. These laws establish the principle of equal treatment for national and foreign investment and confirm the government’s commitment to the creation of a dynamic business environment. The Industrial Development Statute regulates the granting of incentives and simplifies the investment approval process. In addition the codes for Fiscal Benefits (Laws: No. 26/VIII/2013, 102/VIII/2016, and State Budget 2017) establish the principles and rules applicable to tax benefits, establish the content, and set the corresponding rules for granting and monitoring. Laws to promote exports, incentives to export, and free-zone enterprises stress the government’s commitment to encourage investment in export-oriented industries.
During the past year, there have been a few changes in regulations encouraging free investment initiatives, creating Special Zones to encourage private investment outside municipal urban areas, creating Special Economic Zones for the implementation and operation of specific economic activities according to their nature, and establishing the regime of the rights and obligations of the investor. There has also been a clarification of the concept of an Investor's Certificate, and the right to transfer funds abroad from any investment or reinvestment made in Cabo Verde has been strengthened.
Competition and Anti-Trust Laws
The regulatory agencies are the bodies in charge of y responsible for competition-related concerns.
The law establishes the regime of protection of competition applicable to all economic activities, carried out on a permanent or occasional, in private, public and cooperative basis.
Decree Law 53/2003 substituted Decree-Law Nº 2/99 of February 1.
Issue date: 24/11/2003
Date of Entry into force: 23/01/2004
Expropriation and Compensation
Cabo Verde laws allow for expropriation if done for public interest. In the event of expropriation, the government will compensate the owner on the basis of prevailing market prices or the actual market value of the property on the day of expropriation. Compensation may be repatriated at the exchange rate in effect on the day of expropriation.
There have been no cases of illegal expropriations, and the government has never shown any pattern of discriminating against foreigners.
ICSID Convention and New York Convention
In 2011, Cabo Verde became a contracting state to the International Centre for the Settlement of Investment Disputes (ICSID convention). Cabo Verde is not a signatory to the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).
Investor-State Dispute Settlement
Representatives from the Brazilian telecommunications company Oi and the government of Cabo Verde are trying to work towards the resolution of a boardroom dispute relating to the country’s telecommunication company, Cabo Verde Telecom (CVT). According to the government of Cabo Verde, the Portuguese company that held 40 percent of the company violated agreements by agreeing to sell its shares held in CVT to Oi without the prior permission of the Cabo Verde authorities.
International Commercial Arbitration and Foreign Courts
Disputes between the government and any investor concerning the interpretation and application of the law, which cannot be resolved amicably or via negotiation, are submitted for resolution by the judicial authorities, in accordance with Cabo Verdean laws. Disputes between the government and foreign investors on investments authorized and made in the country, if no other process has been agreed upon, are settled by arbitration.
The law favors arbitration as a mechanism for settling investment disputes between the government of Cabo Verde and foreign investors, under national and international dispute resolution rules, and the courts recognize and enforce foreign arbitral awards. Generally, arbitration will be carried out in Cabo Verde and in Portuguese, unless the parties agree on another location and language. Arbitration is generally accepted as a dispute resolution mechanism. The decision of the single referee or the arbitration committee is final and there is no appeal.
- The principal national arbitration statute in Cabo Verde is the Arbitration Law No. 76/VI/2005 of 16 August 2005;
- Law No. 89/IV/93 of 13 December 1993 provides that disputes between the State of Cabo Verde and foreign investors shall be resolved through arbitration and conciliation subject to Cabo Verde arbitration law;
- Decree-Law No. 35/2010 of 6 September 2010 provides that disputes related to the validity, interpretation, and non-fulfillment of insurance agreements may be addressed by arbitration;
- Decree No. 8/2005 of 10 October 2005 provides for institutional arbitration.
Cabo Verde made resolving insolvency easier by adopting a law that introduces a reorganization procedure and facilitates continuation of the debtor’s business during insolvency proceedings. The law also allows creditors greater participation in important decisions during insolvency proceedings. The law, published in December 2015, entered into effect in September 2016 and positively affected Cabo Verde’s rating on the Doing Business Report 2018.