Set Up a Company in Cape Verde: A Comprehensive Guide by Astertax

Cape Verde, officially known as the Republic of Cabo Verde, offers several business structures for individuals and entities looking to establish a presence or conduct business in the country. As of my last knowledge update in September 2021, here are some of the main business structures in Cape Verde:

  1. Individual Entrepreneur (Empresa Individual): This is a simple and common business structure where a single individual is the owner and operator of the business. It’s suitable for small businesses and self-employed individuals.
  2. Limited Liability Company (Sociedade por Quotas – LDA): An LDA is a commonly used business structure in Cape Verde. It offers limited liability protection to its shareholders, and it can be formed with a minimum of two shareholders and a maximum of 50. It’s a flexible option for small and medium-sized enterprises (SMEs).
  3. Joint Stock Company (Sociedade Anónima – SA): This business structure is suitable for larger companies and corporations. It allows for the sale of shares to the public and typically requires a minimum of five shareholders. SAs are subject to more stringent regulatory and reporting requirements.
  4. Cooperative (Cooperativa): Cooperatives are formed by individuals or businesses with common interests, and they are collectively owned and operated by their members. They can be established in various sectors, including agriculture, fishing, and services.
  5. Branch Office (Sucursal): Foreign companies can establish branch offices in Cape Verde to conduct business. However, this structure does not have separate legal personality from the parent company, and it must comply with local regulations.
  6. Representative Office (Escritório de Representação): A representative office is typically used by foreign companies for market research, promotion, and liaison purposes. It cannot engage in commercial activities.
  7. Partnership (Sociedade em Nome Coletivo – SNC): This structure involves two or more partners who are personally liable for the company’s debts. It’s not as common as the LDA structure.
  8. Micro, Small, and Medium-sized Enterprises (MSMEs): Cape Verde has specific legal provisions and incentives for MSMEs, including simplified registration and taxation procedures.
  9. Free Trade Zone Company: Cape Verde has established free trade zones (Zonas de Processamento de Exportações – ZPE) where companies can benefit from tax incentives and customs advantages. Businesses established in these zones enjoy special benefits and exemptions.

It’s important to note that business regulations and requirements may change over time, so it’s advisable to consult with local legal and business experts or government authorities for the most up-to-date information on business structures, registration procedures, and regulations in Cape Verde. Additionally, seek legal and financial advice before choosing a specific business structure to ensure it aligns with your business goals and objectives.

Setting up a company in Cape Verde involves several steps and procedures, and the exact requirements can vary depending on the type of company you want to establish and the nature of your business. Here are the general procedures for setting up a company in Cape Verde:

  1. Choose Your Business Structure: Decide on the most suitable legal structure for your business, such as a Limited Liability Company (LDA), Joint Stock Company (SA), or another structure that fits your needs.
  2. Reserve a Company Name: Verify the availability of your chosen company name and reserve it with the Cape Verdean Business Registry (RCI).
  3. Draft Articles of Association: Prepare the articles of association for your company. These documents should outline the company’s purpose, structure, management, and other relevant details. If you’re not familiar with Cape Verdean company law, it’s advisable to seek legal assistance.
  4. Capital Deposit: Deposit the required minimum share capital in a local bank. The amount varies depending on the type of company and its business activities.
  5. Notarization of Documents: Have your articles of association and other relevant documents notarized by a local notary public.
  6. Register the Company: Submit the necessary documents to the Cape Verdean Business Registry (RCI) for company registration. You will need to provide the notarized articles of association, proof of capital deposit, and other required documents.
  7. Tax Identification Number (NIF): Obtain a tax identification number (Número de Identificação Fiscal – NIF) for your company from the Tax Authority (Autoridade Tributária).
  8. Social Security Registration: Register your company with the National Social Security Institute (INPS) to ensure compliance with social security and employee benefits regulations.
  9. Obtain Business Licenses: Depending on your business activities, you may need specific licenses or permits. Check with relevant local authorities to determine which licenses are required for your industry.
  10. Employment Registration: If you plan to hire employees, register them with the Social Security Institute (INPS) and ensure compliance with labor laws.
  11. Register with the Local Municipality: Register your company with the local municipality where your business is located.
  12. Open a Bank Account: Open a business bank account in Cape Verde for financial transactions related to your company.
  13. Comply with Tax Regulations: Understand and comply with Cape Verde’s tax regulations, including Value Added Tax (VAT) and corporate income tax.
  14. Ongoing Compliance: Be aware of and adhere to Cape Verdean corporate governance and reporting requirements, including annual financial statement filings and other regulatory obligations.
  15. Employment Regulations: Familiarize yourself with labor laws, including employment contracts, minimum wage requirements, and other employment-related regulations.

Please note that the specific requirements and procedures may change over time, so it’s crucial to consult with legal and business professionals or contact the Cape Verdean government authorities, such as the Cape Verdean Business Registry (RCI), for the most up-to-date information and guidance on company registration and compliance in Cape Verde. Additionally, consider seeking local legal counsel to navigate the process effectively.

Cape Verde had a tax system that included several types of taxes at the national and local levels. Keep in mind that tax regulations and rates may change over time, so it’s essential to consult with a local tax advisor or the Cape Verdean tax authorities for the most up-to-date information. Here are some of the main taxes in Cape Verde:

  1. Value Added Tax (VAT):
    • VAT is a consumption tax levied on the supply of goods and services in Cape Verde.
    • The standard VAT rate is typically 15%.
    • Reduced rates (5% or 10%) may apply to specific categories of goods and services, such as basic food items, medicines, and some agricultural products.
  2. Corporate Income Tax:
    • Corporations operating in Cape Verde are subject to corporate income tax on their worldwide income.
    • The standard corporate income tax rate is 25%.
    • There may be tax incentives and reduced rates for certain industries or investments in specific regions.
  3. Personal Income Tax:
    • Individuals are subject to personal income tax on their income, including employment income, business income, and capital gains.
    • The personal income tax rates are progressive, with rates ranging from 18% to 35%.
    • Some exemptions and deductions may apply to specific types of income.
  4. Property Transfer Tax:
    • This tax is levied on the transfer of property and real estate.
    • Rates can vary, but they are typically around 3% to 5% of the property’s value.
  5. Stamp Duty:
    • Stamp duty is imposed on various documents, contracts, and legal transactions, including notarial acts and the issuance of securities.
    • Rates may vary depending on the type of document or transaction.
  6. Customs Duties:
    • Import duties apply to goods imported into Cape Verde, and rates vary depending on the type of goods and their origin.
    • Cape Verde is a member of the West African Economic and Monetary Union (WAEMU), which has a common external tariff.
  7. Municipal Taxes:
    • Local municipalities in Cape Verde may impose additional taxes or fees, such as property taxes or business license fees.
  8. Social Security Contributions:
    • Employers and employees are required to contribute to the National Social Security Institute (INPS) to fund social security benefits.
    • Contribution rates may vary depending on income and employment status.
  9. Tourism Tax:
    • Cape Verde may impose a tourism tax on visitors staying at tourist accommodations. The rates and regulations can vary by location.

It’s important to note that Cape Verde may have tax treaties with other countries that can affect the taxation of international transactions and income. Additionally, the government may introduce changes to the tax system and rates to encourage investment and economic development.

For precise and up-to-date information on Cape Verde’s tax system and any recent tax changes, it is highly recommended to consult with a local tax advisor or the Cape Verdean tax authorities.

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