Law No. 80/IX/2020, of 26 March 2020, which created and regulates the status of Differentiated Merit Projects (“DMP”), entered into force yesterday. The status of DMP is granted to investment projects that meet all of the following requirements:

a. The investment amount should be equal to or more than CVE 1,500,000,000$00 (corresponding to € 13,603,591.35);
b. The y should contribute, in net terms, to the improvement of the balance of payments;
c. They should use technology and production and marketing processes that minimize environmental impacts or promote environmental sustainability;
d. At least five qualified positions (those that require specialized technical training, either professional or of higher education) should be created;
e. Factors should be introduced that are capable of contributing to the improvement of the quality of goods on offer; and
f. They should meet the relevant requirements to be granted the tax benefits (related to the taxable person) foreseen in the Tax Benefits Code (“TBC”), namely:

• Being taxed under the organized accounting regime, according to Cape Verde’s standardized accounting system;
• Exclusive use of the online electronic system to comply with tax obligations;
• Not being taxed by indirect methods of taxation;
• Tax and social security situation in order.

The following tax benefits are granted to investment projects with DMP status (cumulatively with

those foreseen in the TBC):

a) Tax and custom incentives, under the terms of TBC, notably:

• Exemption from Property Tax on the acquisition of real estate used exclusively for the implementation of the investment projects;
• Exemption from Stamp Duty on the contracting of financing for the investments;
• Exemption from Custom Duties on the importation of goods related to the main purpose of the investment project;

b) State funding of up to 50% of the costs incurred from training and qualification of human resources during the first year of activity

DMP status is also granted to investment projects in an amount equal to or more than CVE 500,000,000$00 (corresponding to € 4,535,530.45) when developed in municipalities which have an average GDP per capita in the last three years of less than the national average, and which meet the other criteria mentioned above. In these cases, in addition to the aforementioned tax and customs benefits, the investment project may also be granted additional benefits.
 
Any foreign investor of a project that is granted DMP status can apply for Cape Verdean nationality, under the applicable legal terms.
 
Any project granted DMP status must commence within 12 months, counting from the granting of said status, under penalty of expiration of the benefits allowed.

For further information, please contact:
[email protected]