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Luxury Townhouses in 2009

NEWS ALERT: Exclusive Luxury Townhouses are soon to be built with the most stunning ocean views in Sao Vicente. Spacious 3 bedrooms, 3 bathrooms with 2 En-suite and infinity pool. Be sure to complete the Property Form for more details and read more on Sao Vicente. These Townhouses are believed to double in value by 2011 when the International Airport will be open. Alternatively, you can request a property pack by calling our UK Office on 0208 517 8856.

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Cape Verde Economy

The Cape Verdean economy is ripe for takeoff, as it now has the basic pre-requisites: a free and open economy, good governance and maturing democracy, a stable economy and society, and a highly literate society. What the Cape Verdean economy needs is significant investment and the continuation of good democratic governance and ongoing economic reforms.

Cape Verde is really a poor country however the quality of life ranks highest in the United Nations Index of West Africa. The economy is largely subsistence agriculture and employs around 80% of the population. However, efforts are severely hampered by the lack of water. The majority of crops grown is maize and beans. Bananas, sugar cane, sweet potatoes and cassava are also grown, the main exported crops are bananas and coffee. the seas around Cape Verde are rich with many types of fish. However, the fishing here is done in the traditional way and is generally considered to be an art form and not practised on a massive scale. Tourism is set to be the biggest growth sector of the GDP. Sao Vicente is forecasting that by 2010 there will be 232,000 tourists visit the island per year and by 2020 this figure will rise to 535,000. We believe there is a massive potential for anyone wishing to start up in business in Cape Verde as even more people in the future will be attracted into the islands both, tourists, and more residents.

Economic growth in Cape Verde has steadily improved over recent years, reflecting the overnment's clear efforts to turn the economy around. The true extent of this success can be measured by the United Nation's decision in June 2007 to graduate Cape Verde But of the category of Least Developed Countries, only the second time a country has achieved this progress since the initiative was introduced.

This strong growth, combined with sharp increases in capital spending, rising tourism revenue and direct foreign investment, will help to ensure the continuing social and conomic stability that makes Cape Verde an attractive location for property investors.

One of the major stumbling blocks affecting developmen is the island's poor natural One of the major stumbling blocks affecting development is the islands' poor natural infrastructure, has hindered economic activity and led to a significant dependency on imports. But the nation is now harnessing the natural resources which are in limitless supply - the sun, the ocean, the wind and its people - and is capitalising on tourism and the growth of the overseas property market.

In 1991, after 15 years of a state-controlled economy. the government of Cape Verde adopted a development strategy based on market-oriented policies, including an ambitious privatisation programme. It became strongly committed to the implementation of macroeconomic and structural reforms and to the development of institutions and infrastructure which would successfully exploit the opportunities offered by an increasingly competitive global economy.

Despite slow progress in some sectors, Cape Verde's economic reform policies are now definitely paying off. Many new businesses are making the most of the opportunities offered by tourism, private investment projects are being implemented, and the construction industry is booming. These trade and investment opportunities can only increase as tourism, fisheries and export-oriented industries become established in the country.

At the beginning of 2007 members of the International Monetary Fund confirmed the country's economic growth saying: "Growth in 2007 is expected to be dose to seven per cent and, given the large investment projects in the pipeline, the economic outlook is promising. Inflation is expected to decline substantially in 2007 and reach low single-digit levels by the end of the year."

Strong growth combined with sharp increases in capital spending, rising tourism revenue and inflows of foreign direct investment should help ensure continued real GDP growth. GDP per capita was approximately $6,000 in 2006 and unemployment is steadily falling as industries such as construction thrive. The Cape Verde escudo is pegged to the euro at a rate of eYE 110 to €1, backed by increasing foreign exchange reserves.

The Cape Verdean economy has performed consistently well since gaining independence in 1975. Annual GDP growth, since 1975, has averaged 6 percent per year; inflation has remained under 2 percent since 1999.  Per capita income grew from €300 in 1975 to €944 in 2003, a seven-fold increase. To improve economic performance and build a self-sustaining economy, the Government has undertaken several reforms and engaged in many others. Among these reforms are efforts to improve the efficiency of public administration, reduce administrative barriers, reform and deepen the financial markets, and ensure monetary stability and fiscal discipline. The Government is also continuing the process of privatization, promoting pension reform, and is currently engaged in the process of reforming Cape Verde’s trade policies and systems of intellectual property rights to meet the standards for membership in the World Trade Organization (WTO). Communication levels are continuously getting better both nationally and internationally. 

Income Tax and Property Tax

Individuals are liable to pay tax on rental income gained in Cape Verde at a rate of 20%. Property tax is levied annually on the value of immovable property at 0.075%.

Capital Gains Tax

Capital gains tax is levied at a flat rate of 3%. Capital gains on plots for construction are taxable if their sales price or market value increases more than 100% of its original acquisition price. Capital gains on any other property are taxable if their sales price or market value increases more than 30% of its original acquisition price.

Inheritance Law

How high are inheritance taxes in Cape Verde? Any property transmitted by inheritance or by gift is taxed at a flat rate of 3% on the attributed value. Once you have acquired the property, it is advisable that you execute a will to deal with your property in Cape Verde. Although foreign wills are valid, obtaining probate is easier if there is a local will.

Economic Policies

Cape Verde has few natural resources and suffers from poor rainfall and limited fresh water. Only 4 of the 10 main islands (Santiago, Santo Antão, Fogo, and Brava) normally support significant agricultural production. Mineral resources include salt, pozzolana (a volcanic rock used in cement production), and limestone.

General Taxes

The economy of Cape Verde is service-oriented, with commerce, transport, and public services accounting for more than 70% of GDP. Although nearly 70% of the population lives in rural areas, agriculture and fishing contribute only about 10% of GDP. Light manufacturing accounts for most of the remainder. An amount estimated at about 20% of GDP is contributed to the domestic economy through remittances from expatriate Cape Verdeans. All citizens are to contribute to the general taxes of Cape Verde such as light, gas, electric, transport and more.

Since 1991, the government has pursued market-oriented economic policies, including an open welcome to foreign investors and a far-reaching privatization program. It established as top development priorities the promotion of market economy and of the private sector; the development of tourism, light manufacturing industries, and fisheries; and the development of transport, communications, and energy facilities. From 1994 to 2000 there was a total of about €274 million in foreign investments made or planned, of which 58% were in tourism, 17% in industry, 4% in infrastructure, and 21% in fisheries and services.

Fish and shellfish are plentiful, and small quantities are exported. Cape Verde has cold storage and freezing facilities and fish processing plants in Mindelo, Praia, and on Sal.

Cape Verde's strategic location at the crossroads of mid-Atlantic air and sea lanes has been enhanced by significant improvements at Mindelo's harbor (Porto Grande) and at Sal's international airport. Ship repair facilities at Mindelo were opened in 1983, and the harbors at Mindelo and Praia were recently renovated. The major ports are Mindelo and Praia, but all other islands have smaller port facilities. In addition to the international airport on Sal, airports have been built on all of the inhabited islands. All but the airport on Brava enjoy scheduled air service. The archipelago has 3,050 kilometers (1,830 mi.) of roads, of which 1,010 kilometers (606 mi.) are paved.

Financial Economy

GDP (2004): €983 million.
GDP per capita (2004): €1410.
Annual real GDP growth rate (2005): 6.6%.
Inflation (2005): 0.4%.
Natural resources: Salt, pozzolana, limestone.
Agriculture: Products--bananas, corn, beans, sugarcane, coffee, fruits, vegetables, livestock products.
Industry: Types--fish and fish products, clothing, shoes, beverages, salt, construction, building materials, ship repair, furniture, metal products, tourism.
Trade (2004): Exports--€37 million: fuel, clothing, shoes and shoe parts, fish and crustaceans. Imports--€236 million: consumer goods, intermediary goods, capital goods, petroleum. Major trading partners, exports--Portugal 60.2%, U.S. 17.5%, U.K. 11.5%, Denmark 2.1%, Germany 1.7%. Major trading partners, imports--Portugal 40.7%, U.S. 12%, Netherlands 8.1%, Spain 5.1%, Italy 4.1%.
Fiscal year: Calendar year.
Economic aid received: €62 million (2002). Largest donors: Portugal (€7.4 million); Luxembourg; Japan; and the United States ($3.9 million).

See more on Cape Verde Politics.