HomeReportsBureau of Economic and Business Affairs2022 Investment Climate Statements…Cabo Verde

# 					2022 Investment Climate Statements: Cabo Verde			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Other Investment Policy Reviews 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties   
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                    -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises (SOEs)                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Additional Resources                      -  Department of State 
                    -  Department of the Treasury 
                    -  Department of Labor 
                -  9. Corruption                    -  Resources to Report Corruption                      -  Contact at government agency responsible for combating corruption: 
                    -  Contact at international organization: 
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs   
                -  13. Foreign Direct Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

The Government of Cabo Verde welcomes international investment, provides prospective investors “one-stop shop” assistance through its investment promotion agency Cabo Verde TradeInvest, and offers incentives and tax breaks for investments in multiple sectors, most notably tourism and information and communication technology. Growth is projected to slowly accelerate in 2022 as tourism inflows from Europe increase and the COVID-19 pandemic recedes, helped by an efficient vaccination rollout throughout the country. However, increases in food and energy costs stemming from the Ukraine crisis could hinder economic recovery. Cabo Verde’s political stability, democratic institutions, and economic freedom lend predictability to its business environment. Free and fair elections, good governance, prudent macroeconomic management, openness to trade, increasing integration into the global economy, and the adoption of effective social development policies all contribute to a favorable climate for investment. Cabo Verde receives high marks on international indicators for transparency and lack of corruption. There are few regulatory barriers to foreign investment in Cabo Verde, and foreign investors receive the same treatment as Cabo Verdean nationals regarding taxes, licenses and registration, and access to foreign exchange. The country’s strategic location and growing connectivity with other West African nations make it a potential gateway for investors interested in a foothold from which to expand to the continent.

As Cabo Verde’s low proportion of arable land, scant rainfall, lack of natural resources, territorial discontinuity, and small population make it a high-cost economy with few economies of scale, the country relies on foreign investment, imports, development aid, and remittances. Despite the challenges, in 2007 the country became one of the first to graduate from least developed country status, and it met most of its Millennium Development Goals by 2015. As the COVID-19 pandemic has demonstrated, the economy’s dependence on tourism, which accounted directly for 25 percent of GDP and more than 40 percent indirectly pre-pandemic, makes it vulnerable to external shocks. In addition, the pandemic caused the government to put plans to privatize state-owned enterprises on hold, though privatization of ports and airports management and water and electricity could move forward later. While the business and investment climates continue to improve, there remain bureaucratic, linguistic (relatively few English or French speakers), and cultural challenges to overcome.

The government’s new Cabo Verde Ambition 2030 plan builds on its Strategic Plan for Sustainable Development and promises to open opportunities in sustainable tourism, renewable energy, blue and digital economies, and the transformation of Cabo Verde into a transportation and logistics platform. Cabo Verde aims to generate 50 percent of its electricity from renewable sources by 2030 and 100 percent by 2040. Diversification of the economy remains a priority, but high public debt levels, which reached a record estimated 158.4 percent of GDP in 2021, limit government funding capacity.

							1. Openness To, and Restrictions Upon, Foreign Investment					

### Policies Towards Foreign Direct Investment

Cabo Verde seeks both domestic and foreign investment to drive economic recovery, diversification, and growth following the COVID-19 crisis. The government’s Ambition 2030 strategy emphasizes development of sustainable tourism, transformation of the country into a transportation and logistics platform, renewable energy, blue and digital economy, and export-oriented industries. The government promotes a market-oriented economic model under which all investors, regardless of nationality, have the same rights and are subject to the same duties and obligations under the law. Improving the business climate to attract investment remains an economic priority, as does reducing the state’s role in the economy, though the COVID-19 pandemic has pushed back plans to privatize state-owned enterprises.

In 2021, approved investment projects reached an all-time high of USD 1.9 billion, confirming continued investor confidence in Cabo Verde despite pandemic uncertainties. Foreign investment continues to be concentrated in tourism and light manufacturing. In 2021, over 98 percent of the approved investment projects were in the tourism sector.

Cabo Verdean law offers tax benefits and grants permanent residence to foreign citizens with an investment exceeding 180 million escudos (USD 2 million). In December 2021, the government approved creation of a permanent residence permit for foreigners who own second homes in Cabo Verde. The new law also allows for exemption from excise duties on assets. The legal framework establishes conditions for investment in the country by Cabo Verdean emigrants, including fiscal incentives.

Investment promotion agency Cabo Verde TradeInvest (CVTI) is a one-stop shop for all investors. Through CVTI, the government maintains dialogue with investors using personalized and virtual meetings, round tables, conferences, and workshops. CVTI offers investors a “One-Stop Shop for Investments” electronic platform and help in formalizing expressions of interest and monitoring the investment process. It also provides investors and exporters information about trade agreements and benefits (including those related to the U.S. African Growth and Opportunity Act (AGOA) and Cabo Verde’s membership in the Economic Community of West African States (ECOWAS)), market information, details on trade fairs and events, and contacts with other state institutions and potential partners. In addition, CVTI can assist with securing authorizations and licensing, tax and customs incentives, work permits for foreign workers, visas for company workers, social security registration for workers, and introductions to service providers, such as banks, lawyers, accountants, and real estate agents.

For investments of less than USD 500,000, government entities Pro-Empresa and the Casa do Cidadao (Commercial Registry Department) provide similar services.

The International Business Center (*Centro**Internacional**de**Negocios* – CIN) provides tax and customs benefits for companies that do international business, with the aim of promoting, supporting, and strengthening the emergence of new industrial, commercial, and service provision activities in Cabo Verde.

### Limits on Foreign Control and Right to Private Ownership and Establishment

The Investment Law applies to both foreign and domestic investors, and it enshrines the principle of freedom of investment regardless of nationality. However, sector-specific legislation requires that foreign operators have at least 51 percent participation from Cabo Verdean partners in the fisheries sector and at least 25 percent in interisland maritime transport. The Investment Law further protects against direct and indirect expropriation. Private property is protected from unilateral requisition and nationalization, except for public interest reasons, in accordance with the law and the principle of non-discrimination, subject to prompt, full, and fair compensation.

An approval process serves as a screening mechanism for inbound foreign investment. The process begins with submission of a formal expression of interest to investment promotion agency Cabo Verde TradeInvest in accordance with the Investment Law. Relevant government entities (depending on the sector and of the nature of the investment) then conduct an integrated review of the investment project and provide an opinion. If the opinion is favorable, Cabo Verde TradeInvest, in coordination with relevant agencies, approves the project and issues an investor certificate no later than 45 days from the submission of interest. Tourism-related projects can obtain tourism utility status in addition to the certificate, and for investments considered of special national interest based on the volume of investment and number of jobs created, the government may offer exceptional fiscal and other incentives.

### Other Investment Policy Reviews

During 2018, the United Nations Conference on Trade and Development (UNCTAD) conducted an Investment Policy Review (IPR) at the request of the Government of Cabo Verde. The report contains strategic analysis on how Cabo Verde can utilize foreign direct investment (FDI) in the tourism sector to advance sustainable development objectives. https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2248

In the last five years, civil society organizations have not conducted reviews of investment policy concerns.

### Business Facilitation

Cabo Verde offers benefits to attract private-sector investment. Although equality of treatment and non-discrimination are granted to all investors, certain investment projects, given their nature or size, may receive special treatment and support from the government.

In an effort to reduce approval time for investment projects, the government has established a maximum period of 15 days for analysis and 30 days for approval of investment and export projects. In addition, Cabo Verde has adopted measures to facilitate and stimulate business activity, including lowering the maximum personal income tax (IRPS) one percentage point to 24 percent, eliminating double taxation, and waiving tax installment payments for taxpayers who had negative results or began their business activity in the previous year. Investments of at least 500 million escudos (USD 4.8 million) qualify for contractual benefits such as reduction of or exemption from customs and stamp duties, property taxes, and some other fiscal duties. Those investments that create a minimum number of jobs or expand into new strategic sectors qualify for a 50 percent investment credit, which can be deducted over 15 years.

The law commits the government to paying its bills within 45 days and interest on late payments to ensure predictability in the payment of the state’s obligations to companies. The 2021 budget prioritizes expenditures on assistance for families and support for companies and jobs in the context of the pandemic. It also includes benefits to attract private sector investments and improve the business environment.

Registering a company is straightforward. The Commercial Registry Department (*Casa do**Cidadao*) is a one-stop shop where a company can be created and registered in less than a day. Information on business registration procedures is available at https://portondinosilhas.gov.cv/ and http://caboverde.eregulations.org/show-list.asp?l=pt&mid=1. Step-by-step information on procedures, time, and cost involved in starting a company can be found at http://www.doingbusiness.org/data/exploreeconomies/cabo-verde/starting-a-business/. The CVTI website also offers information on investing in Cabo Verde, including Cabo Verde’s Investment Law, the Code of Fiscal Benefits, and the Contractual Tax Benefits-Incentives: https://cvtradeinvest.com/.

### Outward Investment

The government does not restrict domestic investors from investing abroad. There is no data available on outward investments.

							2. Bilateral Investment and Taxation Treaties					

Cabo Verde has neither a bilateral investment treaty nor a taxation treaty with the United States.

Cabo Verde has bilateral investment agreements with Angola, China, Cuba, Germany, Italy, Mauritius, the Netherlands, Portugal, and Switzerland. It enjoys a special partnership with the European Union as a Peripheral Region Nation and is a member of ECOWAS. Cabo Verde also has an agreement on mutual protection of investments with Hungary.

Cabo Verde has tax treaties in force with Portugal, Macau, Spain, Guinea-Bissau, Senegal, and Luxembourg.

Cabo Verde is a member of the Organization for Economic Cooperation and Development (OECD) Inclusive Framework on Base Erosion and Profit Shifting and joined the October 2021 Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy.

							3. Legal Regime					

### Transparency of the Regulatory System

Cabo Verde is a regional model of transparency and good governance. The government is committed to improving conditions for foreign investment and encouraging a more transparent and competitive economic environment. Laws to promote exports and free-zone enterprises stress the government’s commitment to encouraging investment in export-oriented industries. The tax regime encourages entrepreneurial activity, and government policies support free trade and open markets.

Environmental issues are a priority in Cabo Verde’s sustainable development strategic planning. Legislation requires promotion of an ecologically balanced environment by private companies. Local companies and foreign investment projects must complete environmental-impact studies for assessment of potential impacts by relevant government authorities.

The government promotes the disclosure from companies on the social and corporate governance aspects of their businesses. Many companies, including those operating in sectors such as telecommunications, banking, pharmaceuticals, and laboratories, disclose the information in reports, normally available online.

There is free online access to all laws through the government’s official register website, https://kiosk.incv.cv/.

Regulations on economic activity can also be viewed on the Cabo Verde TradeInvest website, http://cvtradeinvest.com/.

Cabo Verde’s regulatory agencies do not solicit comments on proposed regulations from the general public, according to the World Bank.

Public finance and debt obligations are in line with international norms and standards on budget credibility, thoroughness, and fiscal transparency. Cabo Verde continues to improve its processes for the planning, execution, and control of its budgets. The Ministry of Finance uses a digital platform to publish public accounts. With this web portal, any institution or citizen can observe the execution of the budget in real time. A Public Finance Council independently assesses the sustainability of the budget and policies. Cabo Verde has an independent Supreme Audit Institution (SAI), which operates in accordance with International Standards of Supreme Audit Institutions and the Mexico Declaration and is responsible for verifying and publishing the government’s annual financial statements.

### International Regulatory Considerations

In February 2022, Cabo Verde submitted the instrument of ratification of the Agreement Establishing the African Continental Free Trade Area (AfCFTA).

Regionally, Cabo Verde is committed to integration into ECOWAS but has announced postponement of implementation of the ECOWAS Common External Tariffs to later in 2022 and does not foresee adoption of an ECOWAS single currency.

Cabo Verde formally acceded to the World Trade Organization (WTO) in 2008. Cabo Verde has not notified the WTO of any measures that are inconsistent with its Agreement on Trade-Related Investment Measures (TRIM)s obligations.

### Legal System and Judicial Independence

Cabo Verde’s legal system is based on the civil law system of Portugal. 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 regional courts. Judges cannot be affiliated with political parties.

The Ministry of Justice appoints local judges. The judiciary generally provides due process rights; however, an overburdened and understaffed judicial system constrains the right to an expeditious trial. Cabo Verde has modern commercial and contractual laws. The judicial system in Cabo Verde is transparent and independent. There is no government interference in the court system, but judicial decisions are often delayed, sometimes for years.

The right to private ownership is guaranteed under the constitution. Property rights are also recognized and guaranteed by several laws. 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.

### Laws and Regulations on Foreign Direct Investment

Cabo Verdean laws concerning FDI include the Investment Law of 2012, which applies to both foreign and domestic investors and preserves the principle of freedom of investment. The Industrial Development Statute regulates incentives and the investment approval process. Law 41/2016 defines the mandate of Cabo Verde TradeInvest (https://cvtradeinvest.com/) as a one-stop shop for external investors.

### Competition and Antitrust Laws

Cabo Verde does not have an agency charged with regulating competition, though the government has explored the creation of one. The law protects competition in all economic activities.

### Expropriation and Compensation

The Investment Law protects against direct and indirect expropriation. Private property is protected against requisition and nationalization, except for public interest reasons (Investment Law, article 6.1). Under the law, in the event of expropriation, the government is to compensate the owner on the basis of prevailing market prices or the actual market value of the property. To date there have been no cases of unlawful expropriation or claims of discriminatory behavior by the government against foreigners.

In case of noncompliance of investment projects, the law states that land can be recovered by the state and made available to new investment projects.

### Dispute Settlement

***ICSID Convention and New York Convention***

In 2011, Cabo Verde became a contracting state to the ICSID convention. In 2018 Cabo Verde became a state party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).

***Investor-State Dispute Settlement***

Disputes between the government and investors concerning the interpretation and application of the law that cannot be resolved amicably or via negotiation are submitted for resolution by judicial authorities in accordance with Cabo Verdean law. Disputes between the government and foreign investors on investments authorized and made in the country are settled by arbitration if no other process has been agreed upon.

***International Commercial Arbitration and Foreign Courts***

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. Courts recognize and enforce foreign arbitral awards. Generally, arbitration is conducted in Cabo Verde and in Portuguese unless the parties agree on another location and language. The decision of the single referee or the arbitration committee is final and not subject to appeal. In 2018, the Tax Arbitration Center was created to resolve disputes regarding tax matters.

### Bankruptcy Regulations

Cabo Verdean law provides for a reorganization procedure and a framework that allows creditors involvement in insolvency proceedings.

							4. Industrial Policies					

### Investment Incentives

Cabo Verde reduced the corporate income tax CIT rate to 22 percent from 25 percent in 2019. The Investment Law establishes incentives for investment by foreigners and Cabo Verdean emigrants. For industrial activity, corporate tax credits are available for up to 50 percent of eligible investments, and unused tax credits can be carried forward up to 10 years. Industrial activities may benefit from exemption from property tax on acquisition of immovable property exclusively used for industrial purposes and on customs duties on machinery and raw material.

Renewable energy projects may benefit from a corporate income tax credit for up to 30 percent of the eligible investment and property tax incentives. There are additional customs tax benefits for renewable energy projects and acquisition of new electric vehicles for collective transport of passengers.

### Foreign Trade Zones/Free Ports/Trade Facilitation

Companies must obtain authorization and define areas of economic activity in industrial, commercial, or financial services to be eligible to take part in special economic zones. Fiscal benefits and incentives will be available on a case-by-case basis for participation in the government’s Maritime Special Economic Zone in Sao Vicente (ZEEM-SV). The International Business Center will assess investments and incentives that apply.

The government also plans to create a tax-free Special Economic Zone for Technology (ZEET) with incentives to attract international companies. In March 2022, parliament approved a Special Economic Zone for the Island of Maio (ZEEIM), and there are plans to expand tax-free zones to the island of Fogo.

### Performance and Data Localization Requirements

Access to work and residence permits for foreign workers, managers, and investors is regulated by the Labor Code and Law 80/VIII/2014. Foreigners are required to apply for a work permit, but the authorization process is not onerous. There is no “forced localization” in any sector in Cabo Verde. Investors are granted work and residence permits independently of the amount they invest.

The regime for foreign hires differs depending on category. The Labor Code regulates residence permits for foreign workers, managers, and investors. There are four categories of permits for foreigners: investors, employees, independent professionals, and highly qualified employees.

							5. Protection of Property Rights					

### Real Property

Access, use, and transfer of land and real estate are recognized under the constitution, Civil Code, and Legislative Decree 2/2007 (Land Law). Everyone, regardless of nationality, may acquire ownership rights or obtain special permits to occupy and use land.

A legal entity records secured interests in property. Ownership documents (*Certidao**de**Registo**Predial*) are obtained through the land registry department, including an official map with the property’s exact location (*Planta de**Localizaçao*). A tax information certificate (*Certidao****Matricial*) is requested from the municipality.

If the property is unregistered, it is possible to register the property with a certificate confirming that the property is not registered in anyone else’s name (*Certidao****Negativa*) and a tax certificate confirming status of property tax payment. Under its second Millennium Challenge Corporation compact, Cabo Verde finalized a land information management system for the country and clarified parcel rights and boundaries for the islands of Sal, Boa Vista, and Maio and rural and high-potential tourism zone parcels on the island of Sao Vicente.

### Intellectual Property Rights

Legislation on intellectual property rights (IPR) aligns with international standards. The legal framework has been revised in accordance with provisions of World Intellectual Property Organization (WIPO) agreements and those of the WTO. The body responsible for standardization in Cabo Verde is the Institute of Quality and Intellectual Property (IGOPC), https://igqpi.cv/.

Officially, the IGOPC protects against IP infringement, but enforcement capacity is limited due to resource constraints including inadequate digitalization (though online registration and search of trademarks were made available recently), judicial system capacity constraints, and lack of awareness of intellectual property rights among businesses and consumers.

Cabo Verde is a party to international copyright treaties. Cabo Verde is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Market Report.

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

							6. Financial Sector					

### Capital Markets and Portfolio Investment

Limited capital market and portfolio investment opportunities exist in Cabo Verde. The Cabo Verdean stock market, *Bolsa de**Valores**de Cabo Verde* (BVC), is fully operational. It has been most active in the issuance of bonds. Foreign investors must open an account with a bank in Cabo Verde before buying stocks or bonds from BVC.

Foreign interests may access credit under the same market conditions as Cabo Verdeans.

The IMF’s April 2021 country report on Cabo Verde noted that “the government did not impose or intensify restrictions on payments and transfers for current international transactions nor introduce multiple currency practices. Similarly, it did not conclude bilateral payment agreements inconsistent with Article VIII nor impose or intensify import restrictions for balance of payments purposes.”

### Money and Banking System

Cabo Verde has a small financial sector supervised and regulated by the Central Bank of Cabo Verde (BCV). According to 2020 data from BCV, 82.8 percent of Cabo Verde’s adult population has a bank account. Internet-based tools and services in the banking sector continue to grow in Cabo Verde, particularly since the COVID-19 pandemic, changing the model of the client-bank relationship. New information and communications technology products allow customers online alternatives to in-person support.

Banking represents more than 80 percent of the assets of the entire Cabo Verdean financial system. Two banks – Banco Comercial do Atlantico (BCA) and Caixa Economica de Cabo Verde (CECV) – together held 57.7 percent of market share in 2020, according to BCV data.

Legislation approved in January 2020 terminated the issuance of restricted licenses for offshore banking operations, calling for generic licenses and operations with resident clients. BCV subsequently announced that banks with a restricted license (offshore) serving non-residents would have to adjust to the new requirements or face revocation of their license and enforced administrative liquidation. Offshore banks operating in Cabo Verde had until December 2021 to complete the transition. One did, two opted for liquidation, and BCV revoked the license of a fourth. Currently there are no offshore banks operating in Cabo Verde.

To establish a bank account, clients must provide proper identification and obtain a taxpayer number from the Commercial Registry Department (*Casa do**Cidadao*), a process that takes approximately 10 minutes. Bank credit is available to foreign investors under the same conditions as for domestic investors. The private sector has access to credit instruments such as loans, letters of credit, and lines of credit.

### Foreign Exchange and Remittances

#### Foreign Exchange

Foreign investors have the right to convert their investment to any other freely convertible currency and transfer all their income. The government gives foreign investors important guarantees, such as privately managed foreign currency accounts, which can be credited from abroad or from other foreign accounts in Cabo Verde. In addition, it allows undisputed repatriation of dividends, profits, and capital from foreign investment operations. To receive these benefits, the investor must qualify for foreign investor status through the government’s investment promotion agency, CVTI.

Regulatory legislation specifies that for a company’s first five years of operation, its dividends may be freely transferred overseas without tax and that for the next 15 years dividends may be expatriated with a flat tax rate of 10 percent. Incentives for outward investment in developing countries are not included in the legislation, but they have been provided on an ad hoc basis.

Cabo Verde’s exchange-rate fluctuation risk is low as the country’s currency, the escudo, is pegged at the rate of 110.27 to the euro. This fixed exchange rate arrangement is under the Credit Facility Contract, granted to Cabo Verde by Portugal and managed by a joint Cabo Verdean and Portuguese body called the Commission on the Agreement for Exchange Cooperation (*Comissao**do**Acordo**de**Cooperaçao**Cambial* – COMACC). In 2018, the government liberalized foreign exchange operations in Cabo Verde, allowing the free movement of money overseas.

#### Remittance Policies

Current law permits a foreign investor to request transfer of loan repayments, revenues and profits, and capital gains overseas from the BCV within 30, 60, and 90 days, respectively.

#### Sovereign Wealth Funds

The government created a Sovereign Private Investment Guarantee Fund in 2019. The fund aims to guarantee the issuance of securities, in particular debt securities, by private commercial companies to fund large private investments. The General Auditor of the Securities Market (AGMVM) oversees the fund and aims to maintain a rating of at least “A” from financial rating agencies. Initial share capital of approximately USD 120 million is guaranteed by the state.

							7. State-Owned Enterprises (SOEs)					

Starting in the mid-1990s, Cabo Verde implemented a series of reforms transforming a centrally planned economy into a market-oriented economy. Since then, the number of major enterprises of which the state is a majority owner has decreased from 40 to six. State-owned enterprises (SOEs) are most active in the transportation sector. They are generally managed by a board of directors nominated by the minister in charge of the respective sector. These boards of directors have between three and five members. SOEs are generally evaluated based on their economic or financial performance. All SOEs are required to produce annual reports and must submit their accounting records to independent auditors. Not all directors are political appointees, but they must maintain the confidence and support of the government.

Cabo Verde is not a party to the Government Procurement Agreement (GPA) within the framework of the WTO. In principle, it tries to adhere to the OECD Guidelines on Corporate Governance.

### Privatization Program

After putting privatization plans on hold due to the COVID-19 pandemic, the government aims to resume plans to privatize the airport and air safety agency ASA, the port management functions of the port authority ENAPOR, the pharmaceutical company EMPROFAC, and the electric and water utility ELETRA, among other SOEs, in the coming years.

Both foreign and domestic investors can participate in the public bidding process, which is transparent and non-discriminatory.

							8. Responsible Business Conduct					

The private sector, government, and regulators are increasingly aware of the importance of environmental and corporate social responsibility in Cabo Verde. The government encourages companies to engage in responsible business conduct. Many companies conduct campaigns to promote social awareness in areas such as health, environmental protection, and cultural preservation. Throughout the COVID-19 pandemic, private companies supported vulnerable populations with essential goods. Women represent 37.5 percent of elected parliamentarians, 33 percent of the government, and more than 30 percent of leadership in businesses.

### Additional Resources

#### Department of State

- Country Reports on Human Rights Practices ;
- Trafficking in Persons Report ;
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ;
- U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ; and;
- Xinjiang Supply Chain Business Advisory 

#### Department of the Treasury

- OFAC Recent Actions

#### Department of Labor

- Findings on the Worst Forms of Child Labor Report ;
- List of Goods Produced by Child Labor or Forced Labor ;
- Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
- Comply Chain

Cabo Verde has a national climate strategy and several related plans in place as well as government-declared protected areas to preserve the country’s natural resources and ecosystems. The National Environmental Action Plan offers strategic guidance to address key environmental challenges such as loss of marine biodiversity and water scarcity. Adaptation of its fragile ecosystem to climate change is a key priority for Cabo Verde, and there are several policies and strategies to increase the country’s adaptive capacity, including the National Environmental Action Plan, Strategic Water and Sanitation Plan, National Basic Sanitation Plan, National Adaptation Program of Action, Strategic Plan (and action plans) for Agriculture Development, and the Growth and Poverty Reduction Strategy. Priorities in these strategic documents include improvement of water security, waste treatment, and land and marine-based food security; enhancement of marine protected areas, defense of marine resources and coastal zones, and use of spatial planning for mitigation and adaptation; and mitigation of climate-related disaster vulnerabilities and climate-related health risks.

Cabo Verde updated its Nationally Determined Contributions to climate action and its implementation roadmap in 2020. The updated contributions include reduction of greenhouse gas emissions by 20 percent below the business-as-usual scenario by 2030 or by 30 percent with international support and realization of a decarbonized net-zero emissions economy by 2050. Beyond private investment to achieve these goals, other areas for private sector engagement include control and reduction of waste production, involvement in waste implementation policies, introduction of innovative financial products (blue bonds, desalination bonds, debt-for-climate swaps, blue funds, loan/credit products for energy saving or energy efficient investments), participation in annual conferences with donors and development banks to explore climate-related investments, and involvement in technology-development transfer and capacity building.

Renewable energy projects may benefit from a corporate income tax credit for up to 30 percent of the eligible investment and property tax incentives. There are additional customs benefits for renewable energy projects and acquisition of new electric vehicles for collective transport of passengers.

The country’s Public Procurement Code includes a preference for goods, services, and practices that promote environmental protection and ecological solutions.

							9. Corruption					

Cabo Verde has signed and ratified the UN Convention against Corruption. In Transparency International’s 2021 Corruption Perception Index (CPI), Cabo Verde scored 58 points, ranked 39 in the world and second in the sub-Saharan Africa region. Under Cabo Verdean law, giving or accepting a bribe is a criminal act punishable by up to eight years in prison. The Penal Code details punishments for crimes committed by an official during the exercise of public duties. The Penal Code and the Electoral Code address corruption in the context of electoral crimes, particularly the offering of advantages to voters by political parties or other actors involved in elections.

Cabo Verde’s Public Procurement Code requires that public officials involved in a public procurement process provide written disclosure of any personal interest resulting from a special connection to a bidder or potential bidder and recuse themselves from participation in the process.

In 2020, the Cabo Verdean government provided for the creation of the Corruption Prevention Council, an administrative body that will lead corruption prevention efforts in the country. In early 2022, the Prime Minister announced that the government would soon form the Council. Other institutions active in combating corruption include the Judicial Police, the Prosecuting Counsel, and the courts.

### Resources to Report Corruption

#### Contact at government agency responsible for combating corruption:

Luis Jose Tavares LandimAttorney General (*Procuradoria****Geral**da**Republica*)CP 268 Praia – Cabo VerdePhone +238 261 1665Luis.Landim@pgr.gov.cv

#### Contact at international organization:

Cristina AndradeSenior National CoordinatorUNODC – United Nations Office on Drugs and CrimeAv OUA, ASAPraia – Cabo VerdePhone + 238 260 9644cristina.andrade@un.org

							10. Political and Security Environment					

Cabo Verde is a model of political stability with a tradition of peaceful transitions of power. There have been no political, social, or religious conflicts resulting in violence in recent years. Civil liberties are generally protected, but access to justice is impaired by an overburdened court system, and crime remains a concern.

							11. Labor Policies and Practices					

Labor is widely available in Cabo Verde. Unskilled labor represents 30 to 40 percent of the total labor force. Technical, managerial, and professional talent with English and French language skills is more difficult to find. Unemployment, particularly youth unemployment, is a significant challenge, aggravated by the toll the COVID-19 pandemic has taken on the tourism sector and small business.

Migrants from China, Guinea-Bissau, Senegal, Nigeria, and Guinea may receive wages below minimum wage and work without contracts, creating vulnerabilities. The government continues efforts to reduce vulnerability to exploitation of migrants from West Africa employed in the construction and hospitality sectors and increase their integration into society. According to a 2020 International Labor Organization (ILO) study, although women represented more than 50 percent of qualified workers, they earned on average 7 percent less than men. According to data from the National Statistics Institute, the underemployment rate for women is of 27.2 percent (globally the underemployment rate is 21.7 percent).

Activity in the informal economy – mostly in urban areas in sectors such as small industry, commerce, informal sales, and other services – accounted for 12 percent of GDP. Women constitute a majority of informal economy workers. As part of its post-pandemic relaunch plan for the private sector, the government is assessing mechanisms to promote transition from the informal to formal economy and raise employer compliance with tax and social security obligations.

Cabo Verde has ratified all of the ILO’s eight fundamental conventions. Minimum wage is currently 13,000 escudos (USD 141) per month. The National Social Security Institute (INPS) manages unemployment benefits. The legal workweek is limited to 44 hours for adults, with 12 consecutive hours per week for rest and premium rates of pay for overtime mandatory. Larger employers generally respect this restriction, but agricultural and domestic laborers often work longer hours.

Labor strikes are generally peaceful. All workers except those in restricted sectors are free to form and join unions without interference from the government. The government respects workers’ right to strike, but the law allows the government to act in emergency situations or when essential services might be affected. Few companies have adopted collective bargaining, but the ILO has worked with local unions and government bodies to provide guidance on conducting dialogue between parties. The Directorate General for Labor (DGT) has a conciliation mechanism to promote dialogue. There have been no instances in which labor laws were waived in order to attract or retain investment.

The World Bank, International Monetary Fund (IMF), and African Development Bank (AfDB) consider the rigidity of labor laws and severance pay requirements to be an obstacle to industrial investment and development.

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

DFC does not currently support any investment projects in Cabo Verde. DFC’s predecessor agency, the Overseas Private Investment Corporation (OPIC), signed an insurance agreement with Cabo Verde in 1985.

							13. Foreign Direct Investment Statistics