Financial Preparation

• Determine your total investment budget (property + transaction costs + reserves)
• Establish a currency exchange strategy (EUR is widely accepted)
• Research historical EUR/USD or EUR/CAD exchange rates to identify favorable timing
• Set up international wire transfer capabilities with your home bank
• Consider opening a Euro account for ongoing property expenses
• Evaluate tax implications in both Cape Verde and your home country
• Arrange financing if needed (options are limited for foreigners)

Market Research

• Identify target islands based on investment goals (rental income vs. lifestyle)
• Research specific regions within each island (beach proximity, amenities, accessibility)
• Join online forums for Cape Verde property investors
• Subscribe to property market reports from local agencies
• Analyze tourism statistics and visitor demographics by island
• Research infrastructure projects and planned developments
• Plan a preliminary visit to experience the islands firsthand

Professional Network Development

• Connect with lawyers specializing in Cape Verdean property for foreigners
• Identify reputable real estate agents with experience in international sales
• Research property management companies for rental properties
• Establish contact with currency exchange specialists
• Find bilingual professionals who can assist with language barriers
• Connect with expat communities on your target islands
• Research construction professionals if considering development or renovation

Expert Tip: Cape Verde’s high season runs from November to April, coinciding with the European winter. This is when rental demand peaks, but also when property viewings are most competitive. Consider visiting during shoulder seasons (May or October) when the weather is still excellent, but you’ll have more access to properties and real estate professionals. Avoid the September-October rainy season on the mountainous islands, though the flatter islands like Sal and Boa Vista remain relatively dry year-round.

Recent Development: Cape Verde has introduced a simplified business registration process called “Empresa no Dia” (Company in a Day) that allows for faster company formation for foreign investors. This service is available in Praia and Mindelo and has reduced the company formation timeline from weeks to 1-2 days for straightforward cases. This makes the company option more accessible for property investors who might benefit from corporate ownership.

Banking Setup

• Local Bank Account Options:
  • Banco Comercial do Atlântico (BCA): Largest bank with widest branch network
  • Banco Interatlântico: Part of Portuguese Caixa Geral group, good for international connections
  • Banco Cabo-Verdiano de Negócios (BCN): Focused on business and investment clients
  • Ecobank: Pan-African bank with international connectivity
• Typical Requirements:
  • Passport and secondary identification
  • Proof of address in home country
  • Cape Verdean tax number (NIF)
  • Initial deposit (typically €250-500)
  • In-person visit to the branch
• Alternative Approach: Many foreign investors complete property transactions without a local bank account by using their lawyer’s client account for the purchase. For ongoing expenses, a combination of Euro-based accounts in Europe (Portugal is convenient) and international transfer services can be used.

Financing Options

Financing options in Cape Verde are limited for foreign buyers:

1. Local Bank Mortgages:
   • Availability: Very limited for non-residents, more accessible with local income
   • Deposit Requirements: 30-50% for foreigners
   • Interest Rates: Higher than European/North American rates, typically 8-12%
   • Term: Typically 10-20 years maximum
   • Documentation: Extensive, including proof of income, bank statements, tax returns
2. Developer Financing:
   • Increasingly common on new developments
   • Typically structured as stage payments during construction
   • May offer 2-5 year payment plans on completed properties
   • Interest rates vary widely (0-10% depending on developer)
   • Often secured against the property until fully paid
3. Home Country Financing:
   • Refinancing existing properties in North America
   • Home equity lines of credit (HELOCs)
   • Investment portfolio loans
   • Typically offers better rates than local financing
   • No Cape Verdean collateral required

Most foreign investors use cash purchases or finance through home country sources rather than local financing. Developer payment plans are becoming increasingly popular, particularly for pre-construction properties in new resort developments.

Currency Management

The Cape Verdean Escudo (CVE) is pegged to the Euro at a fixed rate of 110.265 CVE = 1 EUR, eliminating exchange rate risk between these currencies. However, USD/CAD to EUR conversion requires careful management:

• Exchange Rate Considerations:
  • Monitor EUR/USD and EUR/CAD trends to identify favorable exchange windows
  • Consider working with a currency specialist offering rate alerts
  • Strong USD/CAD means more purchasing power in Cape Verde
• Currency Services:
  • Specialized services like Wise, OFX, or XE typically offer better rates than banks
  • Forward contracts can lock in exchange rates for future payments
  • Regular payment services for property management and utilities
• Local Currency Usage:
  • Major property transactions conducted in Euros
  • Local expenses can be paid in CVE or EUR in most tourist areas
  • ATMs widely available in tourist zones for smaller withdrawals
  • Credit cards accepted at major establishments but cash needed for smaller vendors

The Euro peg provides currency stability within Cape Verde, but North American investors still need to manage USD/EUR or CAD/EUR exchange risk. The fixed Euro peg makes Cape Verde more stable from a currency perspective than many other African investment destinations with floating exchange rates.

Property Search Resources

• Online Property Portals:
  • Cape Verde Property – Specialized portal for foreign buyers
  • Rightmove Overseas – UK portal with Cape Verde section
  • Property Cape Verde – Focus on resort properties
  • Cape Verde.com – Tourism portal with property section
• Real Estate Agencies:
  • International agencies: Century 21, RE/MAX (in major tourist areas)
  • Specialized agencies: Nôs Casa, Cape Verde Investments, Cabo Verde Exclusive
  • Developer sales offices in tourism areas (direct purchasing)
  • Note: Agency representation norms differ from North America; most represent sellers
• Resort Developers:
  • TUI (Riu, Sensimar, and Blue resorts)
  • The Resort Group (Melia, Hilton branded resorts)
  • Llana Beach Hotels
  • White Sands Hotel & Spa
  • Dunas Beach Resort
• Local Connections:
  • Expat networks and social media groups
  • On-island visits to areas of interest
  • Local lawyers who may know of unlisted properties
  • Property management companies with sales divisions

Property Viewing Trip Planning

For North American buyers, an efficient property viewing trip is essential:

1. Pre-Trip Research:
   • Identify target islands and property types
   • Contact agencies and developers in advance
   • Schedule viewings before arrival
   • Research flight connections (typically via Lisbon or London)
   • Allow adequate time to visit multiple islands if desired
2. Trip Logistics:
   • Plan 7-10 days minimum for comprehensive viewing
   • Inter-island travel may require flights or ferry connections
   • Car rental recommended on larger islands (Santiago, Santo Antão)
   • Schedule meetings with lawyers and banking representatives
   • Leave time for neighborhood exploration and lifestyle assessment
3. During Viewings:
   • Take detailed photos and notes
   • Verify infrastructure (water, electricity, internet)
   • Assess property during different times of day
   • Check proximity to amenities and beaches
   • Meet with potential property managers
   • Speak with existing owners if possible
4. For Off-Plan Properties:
   • Visit developer’s completed projects
   • Speak with existing owners about delivery timelines
   • Verify building permits and approvals
   • Review developer’s financial stability
   • Understand stage payment schedules

Property Evaluation Criteria

Assess potential investments using these key criteria:

• Location Factors:
  • Distance to beach (primary driver of rental value)
  • Proximity to tourist amenities (restaurants, shops, activities)
  • Transport links (airport access, local transportation)
  • Views (ocean views command premium prices)
  • Noise levels (especially near entertainment zones)
  • Future development plans for the area
• Building Quality:
  • Construction standards (European vs. local building practices)
  • Materials used (importance of salt-resistant materials)
  • Age and condition of property
  • Water systems (many areas have water supply challenges)
  • Electric backup systems (power reliability varies by island)
  • For apartments: management company reputation
• Rental Potential:
  • Occupancy rates in the area/development
  • Peak season pricing vs. year-round average
  • Rental management options available
  • Competing inventory in the immediate area
  • Unique selling points for marketing
  • Rental restrictions in development agreements
• Financial Considerations:
  • Price per square meter compared to area average
  • Maintenance fees and community charges
  • Utility costs and availability
  • Property management fees (15-25% of rental income typical)
  • Potential for capital appreciation based on local developments
  • Exit strategy considerations

Expert Tip: When evaluating properties in Cape Verde, water and electricity infrastructure are critical considerations. Many developments include backup systems like water storage tanks and generators, but their capacity and reliability vary significantly. Properties with reliable water and power command premium rental rates and higher occupancy, as these amenities directly impact guest satisfaction. Ask specific questions about water pressure, outage frequency, and backup system capacity during property viewings.

Legal Due Diligence

• ✓
  Certidão de Registo Predial: Verify property title document from Land Registry
• ✓
  Certidão Matricial: Tax registry certificate confirming fiscal registration
• ✓
  Seller Identity Verification: Confirm the seller is the registered owner
• ✓
  Encumbrances Check: Verify no outstanding debts, mortgages, or claims
• ✓
  Building License: Verify building approval and compliance with permits
• ✓
  Habitation License: Confirm the property is legally habitable
• ✓
  Community Rules: Review resort/development regulations if applicable
• ✓
  Utility Connections: Verify legal water and electricity connections

Physical Due Diligence

• ✓
  Property Inspection: Thorough examination by qualified building inspector
• ✓
  Structural Assessment: Check for salt damage, foundation issues, roof condition
• ✓
  Water Systems: Test pressure, quality, storage capacity, salt content
• ✓
  Electrical Systems: Verify capacity, backup systems, condition of wiring
• ✓
  Common Areas: Assess maintenance, cleanliness, amenities (for developments)
• ✓
  Internet Connectivity: Test speed and reliability for rental appeal
• ✓
  Environmental Factors: Assess wind exposure, dust levels, flood risk

Financial Due Diligence

• ✓
  Comparative Market Analysis: Verify price alignment with recent comparable sales
• ✓
  Rental Market Research: Verify realistic rental projections for the area
• ✓
  Tax Verification: Confirm all property taxes are current and paid
• ✓
  Community Fee History: Review payment records and reserve funds
• ✓
  Utility Costs: Obtain average costs for electricity, water, maintenance
• ✓
  Developer Financial Health: For off-plan purchases, assess company stability
• ✓
  Exit Strategy Assessment: Research market liquidity and typical selling times

Expert Tip: Due diligence is particularly important for off-plan properties in Cape Verde, where construction delays have been common in the past. Request specific contractual guarantees for completion dates with penalty clauses, verify that all permits are in place before making significant payments, and confirm that deposits will be held in escrow accounts. Speaking with owners from the developer’s previous projects can provide valuable insights into their track record for delivery timelines and quality.

Offer and Negotiation

1. Make an Offer: Typically done verbally through the real estate agent
2. Negotiation: Price negotiation and terms discussion
3. Offer Acceptance: Verbal agreement (not legally binding at this stage)
4. Reservation Agreement: Often used with a small deposit (€1,000-3,000) to remove property from market while due diligence proceeds

The reservation fee is typically refundable if due diligence uncovers significant issues, but non-refundable if the buyer simply changes their mind. The terms of the reservation should be clearly documented to protect both parties during this initial phase.

Legal Process

1. Engage a Lawyer: Appoint legal representation to handle the transaction
2. Due Diligence:
   • Title verification
   • Ownership confirmation
   • Encumbrances check
   • Building license verification
3. Preliminary Contract (Contrato Promessa Compra e Venda):
   • Legally binding agreement outlining terms
   • Payment of deposit (typically 10-30%)
   • Sets completion date and conditions
4. Cape Verdean Tax Number (NIF):
   • Apply at local finance office with passport
   • Required for property registration
5. Deed Preparation:
   • Lawyer or notary prepares Escritura Pública (public deed)
   • All parties review before signing
6. Deed Signing:
   • Takes place at notary’s office
   • Payment of balance of purchase price
   • Both parties (or representatives with power of attorney) must be present
7. Registration:
   • Property registered in new owner’s name at Land Registry
   • Tax office registration updated
8. Post-Completion:
   • Utility transfers (electricity, water)
   • Property management arrangements
   • Insurance setup

The timeframe from offer acceptance to completion typically ranges from 6-12 weeks for a straightforward transaction. Off-plan purchases typically have longer timeframes with stage payments tied to construction milestones.

Transaction Costs

Budget for these typical transaction expenses:

• Property Transfer Tax (IUP): 1.5% of purchase price
• Stamp Duty: 1% of purchase price
• Notary Fees: Approximately 0.5-1% of purchase price
• Land Registry Fees: Approximately 0.5-1% of purchase price
• Legal Fees: 1-2% of purchase price (minimum €1,500-2,000)
• Real Estate Agency Fees: Usually paid by seller (3-5% of purchase price)
• Translation Services: If required (€200-500)
• Foreign Exchange Costs: Varies by provider (0.5-3% spread)

Total transaction costs for foreign buyers typically range from 4-6% of the purchase price. These costs should be factored into your overall investment calculations. For off-plan purchases, initial transaction costs may be lower, but additional fees may apply at later stages of the development process.

Expert Tip: For North American buyers who cannot be present for the deed signing, a Power of Attorney (Procuração) can be arranged allowing your lawyer or a trusted representative to sign documents on your behalf. This should be set up early in the process as it requires proper legal drafting, notarization in your home country, and possibly apostille certification for use in Cape Verde. Some notaries may also accommodate remote deed signing via video conference, though this is a newer practice and not universally accepted.

Administrative Tasks

• ✓
  Utility Transfers: Electricity (Electra) and water accounts in your name
• ✓
  Property Insurance: Arrange building and contents coverage
• ✓
  Management Company Registration: For resort or apartment complex properties
• ✓
  Internet/Telecommunications: Set up accounts with CVTelecom or other providers
• ✓
  Banking: Arrange local account or international transfer method for ongoing expenses
• ✓
  Fiscal Representation: Appoint representative if not residing in Cape Verde
• ✓
  Residency Application: If planning to use property for residency purposes

Regulatory Compliance

Rental properties in Cape Verde must comply with several regulations:

• Alojamento Local (Local Accommodation) License:
  • Required for all short-term rental properties
  • Application process through local municipality
  • Property must meet safety and habitability standards
  • Renewable every 5 years
• Safety Requirements:
  • Fire safety equipment (extinguishers, smoke detectors)
  • Emergency evacuation plans posted
  • First aid kit on premises
  • Electrical safety certification
• Fiscal Obligations:
  • Registration with tax authorities for rental income
  • Collection and remittance of tourism tax (currently €2 per person per night)
  • Annual income tax declarations
  • Invoice issuance for all rental income
• Guest Registration:
  • Registration of foreign guests with immigration authorities (SEF)
  • Maintenance of guest records for minimum 1 year
  • Collection of guest identification information

Most owners utilize professional property management companies to handle these compliance requirements, particularly for remote owners who are not regularly present in Cape Verde. The penalties for non-compliance can be significant, including fines and potential suspension of rental operations.

Record Keeping

Maintain comprehensive records for tax and legal purposes:

• Property Documents:
  • Deed (Escritura Pública)
  • Land registry certificate (Certidão de Registo Predial)
  • Property tax certificate (Certidão Matricial)
  • Building licenses and permits
  • Insurance policies
• Financial Records:
  • Purchase payments and receipts
  • Renovation expenses with invoices
  • Utility payments
  • Property management fees
  • Rental income and guest records
  • Tourism tax collections and payments
• Tax Documentation:
  • Annual tax returns (Cape Verde and home country)
  • Tax payment receipts
  • Property-related deductions
  • Foreign income declarations
• Operational Records:
  • Property management agreements
  • Rental agreements
  • Maintenance records
  • Correspondence regarding property
  • Guest registration documents

Cape Verdean tax authorities require records to be kept for at least 5 years. Digital record-keeping systems with secure backups are strongly recommended, particularly for overseas investors managing properties remotely.

Expert Tip: Consider setting up a digital system for monitoring your Cape Verde property remotely. Many property management companies now offer online portals for owners, but independent options like smart thermostats, security cameras, and water leak detectors that report to your phone can provide additional peace of mind. These systems allow you to monitor both property conditions and the performance of your management company from overseas, and they have proven particularly valuable during hurricane season and periods of extreme weather.

Cape Verde Tax Obligations

• Property Transfer Tax (IUP – Imposto Único sobre o Património):
  • 1.5% of purchase price, paid at time of purchase
  • Typically paid by the buyer
  • Due before deed can be registered
• Annual Property Tax (IUP):
  • 1.5% of the tax value of the property
  • Many residential properties are exempt (verification required)
  • Commercial properties always subject to this tax
  • Due annually by December 31
• Rental Income Tax (IRPS/IRPC):
  • Progressive rates from 15-35% for individuals (IRPS)
  • Flat 25% for corporate owners (IRPC)
  • Tax-deductible expenses include management fees, maintenance, utilities
  • Annual declaration required by March 31 each year
• Tourism Tax:
  • €2 per guest per night (up to 10 nights maximum)
  • Collected from guests and remitted to tax authorities
  • Monthly or quarterly filings depending on volume
• Capital Gains Tax:
  • Part of income tax system (IRPS or IRPC)
  • Individuals: 15-35% on gains (some exemptions available)
  • Companies: 25% flat rate
  • Reported in annual tax return
• Stamp Duty:
  • 1% of purchase price, paid at acquisition
  • Various other transactions may also attract stamp duty

Home Country Tax Obligations

Cape Verde does not currently have comprehensive tax treaties with either the United States or Canada, though it has treaties with Portugal and some other European nations. The absence of specific treaties may create potential for double taxation in some situations, making it essential to work with tax professionals familiar with international taxation in both jurisdictions.

Tax Planning Strategies

• Entity Structure: Evaluate whether personal ownership, Cape Verdean company, or other structures optimize tax position
• Expense Documentation: Maintain meticulous records of all allowable expenses to maximize deductions
• Residency Status: Consider tax implications of Cape Verdean residency vs. non-residency status
• Tourism Investment Incentives: Explore special tax regimes for qualifying tourism investments
• Capital Improvements: Document all capital expenditures which may reduce future capital gains tax
• VAT Recovery: Ensure VAT refunds are claimed where permitted on major purchases
• Timing of Transactions: Consider tax year timing for property sales to optimize tax position
• Currency Management: Plan currency conversions to minimize exchange costs and timing differences

Cape Verde’s tax system continues to evolve as the country develops its tourism and investment sectors. Regular consultations with Cape Verdean and home country tax professionals are essential to ensure continued compliance and optimal structuring.

Expert Tip: Appoint a qualified fiscal representative in Cape Verde to handle your tax compliance. This is particularly important for remote owners who aren’t regularly present in the country. A fiscal representative can file your tax declarations, respond to inquiries from tax authorities, and ensure deadlines are met. Most accounting firms and some law firms in Cape Verde offer this service for a modest annual fee (typically €300-600/year), which is often tax-deductible against rental income.

Selecting a Property Manager

Evaluate potential property managers using these criteria:

• Experience with Foreign Investors:
  • Track record working with North American clients
  • Multilingual staff (English essential)
  • Transparent reporting systems
• Local Presence:
  • Physical office on your island
  • Adequate staff coverage for emergencies
  • Established relationships with service providers
• Marketing Capabilities:
  • Access to international booking platforms
  • Professional photography and listings
  • Multilingual booking support
• Client Communication:
  • Online owner portal for reports and bookings
  • Regular financial reporting
  • Responsive to inquiries across time zones
• Maintenance Network:
  • Reliable contractors for repairs
  • Preventive maintenance programs
  • Emergency response procedures
• Regulatory Compliance:
  • Licensing and permit management
  • Tax collection and remittance
  • Guest registration with authorities
• Financial Management:
  • Transparent fee structure
  • Timely owner payments
  • Detailed expense accounting

Management Agreement Essentials

Ensure your property management contract includes these key elements:

• Scope of Services: Detailed description of exactly what is included and excluded
• Fee Structure: Clear explanation of all management fees, commissions, and additional charges
• Contract Term and Notice Period: Duration of agreement and how to terminate
• Reporting Schedule: Frequency and format of financial and property condition reports
• Maintenance Authority: Spending limits for repairs without prior approval
• Booking Policies: How reservation calendar is managed, especially for owner usage
• Rental Rates: Who sets pricing and minimum required rates
• Payment Terms: Timing of owner payments and currency options
• Insurance Requirements: Coverage expectations and liability boundaries
• Damage Deposits: How guest damage is managed and compensated
• Regulatory Compliance: Responsibility for licenses, permits, and tax collection
• Property Access: How owner visits are managed and prioritized

Request references from current clients, particularly other international owners, before signing with a property management company. This provides valuable insights into how they handle properties for remote owners.

Expert Tip: For properties outside organized resorts, consider a hybrid management approach where marketing and guest services are handled by a professional company, but local maintenance and supervision are contracted separately. This model allows you to benefit from professional booking management while potentially reducing overall costs. A reliable local “property angel” who can regularly check on your property and respond quickly to issues is invaluable, especially during Cape Verde’s rainy season when water leaks and humidity problems can develop rapidly if not addressed.

Exit Options

Sale Process

When selling your Cape Verde property:

1. Pre-Sale Preparation:
   • Property presentation and staging
   • Address maintenance issues
   • Gather all relevant documentation
   • Ensure all taxes and fees are current
   • Professional photography for marketing
2. Agent Selection:
   • Look for agencies with international buyer networks
   • Verify marketing strategy for international reach
   • Typical commission: 3-6% (negotiable)
   • Consider exclusive vs. open listing approach
3. Legal Preparation:
   • Update title documentation
   • Resolve any outstanding issues
   • Prepare preliminary sales contract template
   • Obtain current tax certificates
4. Marketing Period:
   • Online listings on international and local portals
   • Agency networks and direct marketing
   • Social media and digital promotion
   • Viewing arrangements for remote sellers
5. Transaction Process:
   • Negotiation and offer acceptance
   • Reservation agreement with deposit
   • Preliminary contract (CPCV) with larger deposit
   • Deed execution at notary office
   • Final payment and property transfer
6. Post-Sale Requirements:
   • Capital gains tax declaration
   • Currency repatriation planning
   • Utility account closures
   • Tax clearance certificates

The Cape Verde selling process typically takes 3-6 months from listing to completion, though this can vary based on market conditions, property type, and pricing strategy. Resort properties often sell more quickly than standalone properties due to established marketing channels.

Market Exit Timing Considerations

Several factors should influence your exit timing decision:

• Tourism Cycle: Cape Verde tourism has seasonal and multi-year cycles; selling during peak tourism periods generally leads to stronger buyer interest
• Currency Exchange Rates: Monitor EUR/USD or EUR/CAD trends; a strong euro significantly enhances returns when converting back to home currency
• Development Milestones: Completion of nearby infrastructure or amenities can significantly enhance property values
• Airline Route Expansion: New flight routes or increased frequency can boost property values by improving accessibility
• Political and Regulatory Climate: Major elections or regulatory changes may impact optimal timing
• Island-Specific Growth: Different islands experience development phases at different times
• Seasonal Factors: Winter months (November-April) see highest visitor traffic and potential buyer interest
• Tax Year Considerations: Timing sales relative to tax years in both Cape Verde and home country can optimize tax position

The Cape Verde property market is still developing compared to mature European markets, with fewer transaction data points and greater volatility. Long-term investors often find that holding quality properties through market cycles and focusing on rental income while waiting for strategic exit opportunities yields the best overall returns.

Expert Tip: When planning your exit strategy, consider the potential for seller financing, particularly for European buyers who may face financing constraints. Offering to finance a portion of the purchase price can expand your buyer pool significantly, potentially command a premium price, and generate attractive interest income during the repayment period. This approach requires careful legal structuring to protect your interests, including proper security over the property, but can be particularly effective for selling properties in less liquid segments of the Cape Verde market.