Cape Verde

Welcome to
Cape Verde
Property Pack
2008
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Welcome
to Cape Verde Property Pack
2008
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Contents
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
Geography
Climate
Government and Politics
Economy
Tourism
Travel
Foreign Investor Incentives
Miscellaneous Information
11
Santiago
Sal
São Vicente
Boavista
Maio
11
12
13
14
14
3.0 Legal purchase process
15
4.0 Financing a purchase
17
18
18
4.1 Typical Mortgage Loan Facility
42 Account opening procedures for non-residents
5.0 Contact details
19
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2.0 Main Islands with opportunities
2.1
2.2
2.3
2.4
2.5
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1.0 Why invest in Cape Verde?
‘The former
Portuguese colony
– once a parched
slave trading post
– is now tempting
property investors
from all over the
world with caiprinias
and Creole cuisine.’
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1.0 Why invest in Cape Verde?
The Atlantic archipelago of Cape Verde is an idyllic holiday destination that is poised
to soar in popularity over the next decade. Development of the islands is in its infancy,
prices remain exceptionally affordable and the potential for future growth is significant
for both residential and commercial investors.
With miles of glorious beaches, stunning scenery, year-round sunshine, colourful
colonial towns and a laid-back way of life, the ten tiny but beautiful islands of
Cape Verde offer all the attractions of more distant tropical destinations without the
drawback of a long and expensive journey. Close proximity to Europe and a growing
number of direct flights cut journey time from Lisbon to three and a half hours and
less than five and a half hours to the UK. And with the latter being only one hour
behind GMT, jet lag is not a concern.
Cape Verde is an archipelago made up of
10 islands located approximately 1400km
south of the Canary Islands and 500km from
Senegal on Africa’s West Coast.
The Government’s positive approach to foreign investment is behind the steady
creation of a stable environment for long-term growth, with financial incentives and
ongoing improvement of the infrastructure of the islands demonstrating the republic’s
determination to become a major player in the global tourist industry.
DISCLAIMER
This presentation is for background information only. Whilst every effort has been made to provide a true
and accurate representation of the facts in this report, we wish to inform readers that they should make
their own investigations and form their own opinion on the information contained within. We will not
accept any responsibility for decisions or actions taken by individuals or groups based either directly or
indirectly on the information given in this document.
Cape Verde Property Pack
Strong capital growth in real estate of 17% over the past year is set to continue with
levels of 20-30% predicted for 2008/9. Potential rental yield is currently between 5%
and 12%, with the latter achieved primarily on commercial property. Expectations of
a 70% increase in some property values over the next two years are not unrealistic.
Cape Verde Property Pack
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Unlike comparable destinations such as the Canaries, Spain or the Caribbean, Cape
Verde is neither over-run with tourists, facing a downturn in its property market, liable
to the devastation of hurricanes or subject to crime. All these positives, combined with
a socially and politically stable democratic society, mean Cape Verde really does
represent a unique investment opportunity.
The figures speak for themselves: a rise in property prices of between 17% and 23%
annually over the last four years demonstrates the fact that the tourism industry is
now firmly established. As a stable multi-party democracy that enjoys healthy growth
of GDP, negligible inflation, very low crime and an absence of conflict on the world
stage, Cape Verde is undeniably set to become a major player in the overseas property
investment market.
1.1
Cape Verde is a volcanic archipelago of 10 islands located approximately 1400km south
of the Canary Islands and 500km from Senegal on Africa’s west coast. Along with the
Azores, the Canaries and Madeira, Cape Verde is part of the Macaronesia region of the
North Atlantic. The country is named after Cap Vert, meaning Green Cape, in Senegal
the western most point of continental Africa.
Each island has its own physical characteristics, with the three easterly islands of Sal,
Boavista and Maio offering miles of pure white sandy beaches and an almost entirely
flat landscape with very little vegetation.
The seven westerly islands of Santiago, São Vicente, Santo Antão, Fogo, Brava,
São Nicolau and uninhabited Santa Luzia are completely different with breathtaking
mountains and lush valleys of rich vegetation, but still with beautiful beaches.
1.2
Climate
The constant temperate climate of Cape Verde is one of the country’s major selling
points, making it an ideal holiday destination all year round. The islands each have
slightly differing climates according to their terrain and location but they can all be
classified as dry-tropical with low humidity.
Cape Verde is ahead of close neighbour the Canaries in terms of both sunshine hours and
temperatures: daily sunshine in Cape Verde averages at six hours in the winter and 11 in
the summer whilst temperatures average 24°C in winter and 29°C in summer. Sea
temperatures are also warmer in Cape Verde as the archipelago is not affected by the
‘Canaries Current’ which creates much colder ocean temperatures around the Canaries.
Despite the reliability of the weather there are still two seasons, a dry season between
November and July and a moderate humid season (compared to mainland Africa) with
some rain between August and October. Average annual rainfall is approximately 68mm,
with around half falling in September. Average rainfall in the Canaries is 300mm per
year but is spread more evenly between September and May, with around six days’
rain per month.
Cape Verde Property Pack
‘Since
independence
there has been no
significant incident
of civil unrest
in Cape Verde,
and changes in
government
have occurred
peacefully.’
Cape Verde’s ocean surface water temperatures range between 22°C and 27°C,
which creates an ideal environment for marine life to thrive. Wind speeds average
around 13 knots, dropping to nine knots in the summer, brought in by the north
east trade winds and help to provide a refreshing breeze on the coast.
When buying a property in a tropical location, consideration of extreme weather
conditions is paramount and this is another area where Cape Verde holds the
advantage over comparable destinations. Unlike destinations such as Florida or the
Caribbean, the likelihood of a hurricane striking the islands is very remote. Hurricanes
start small in the Gulf of Guinea, south of Nigeria near the equator, and sweep
westwards across the Atlantic, well away to the south of Cape Verde and on to the
Caribbean where they wreak havoc. The fact that Cape Verde doesn’t suffer from
the devastation of hurricanes is a major positive factor.
Geography
1.3
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Government and Politics
Uninhabited when the Portuguese discovered the islands in 1456, Cape Verde’s history
began in 1495 when it joined Portugal’s colonial empire. Over the centuries, African
blood brought in under slavery mixed with that of the Portuguese, and to a lesser
extent with English and French, to create the Cape Verdean people of today.
Until the slave trade was abolished in 1876, Cape Verde prospered thanks to its ideal
position as a staging post on the great trade routes between Africa, Europe and the
New World. But with the end of slavery came the end of Cape Verde’s boom time
and the economy went into decline. In the 20th century, Cape Verde still served as
a shipping port but on a much smaller scale.
In 1951, Cape Verde’s status changed from a Portuguese colony to an overseas
province and in 1956 the islands came closer to gaining self-government when they
joined an independence movement led by Guinea-Bissau, another Portuguese colony.
In 1961 Cape Verdeans became full Portuguese citizens and in 1974, following the
coup in Portugal, the colonial empire was dismantled resulting in the declaration
of Cape Verde’s independence on 5 July 1975.
As the Republic of Cape Verde, the islands evolved into a multi-party democracy and
now enjoy a stable social and political environment and consistent growth in economic
development. Elections are considered fair, there is free press and the rule of law is
respected by the state.
After independence was granted government control passed to the Partido Africano
de Independencia de Cape Verde (PAICV) under a single-party state. This was the
status quo for the next 16 years until 1991 when the newly-formed political party,
the Movimento Para a Democracia (MPD), won the first multi-party democratic
national election. A further democratic election in 1996 returned the MPD to power
but in 2001 a much-transformed PAICV was elected back into power. The party can
be credited with having achieved record economic success during that term and was
consequently re-elected to another five years on 22 January 2006.
Cape Verde Property Pack
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Cape Verde is a socially and politically stable country, with all political parties,
whether in government or opposition, supporting the macroeconomic and reform
policies recommended by the IMF and the World Bank. This means policies are
consistently followed to control public spending, reduce domestic debt, privatise
companies and improve social services.
All political parties are very keen to attract foreign private investment, particularly
into the development of the property, tourism, light manufacturing, shipping and
fishing sectors. The government’s main foreign policy objectives are to maintain
close relations with the Western donors that serve as its main development partners,
accounting for more than one third of government revenue. It is also keen to strengthen
its relationship with the European Union and is currently seeking associate status with
the EU, backed by the formal support of Portugal.
The three other volcanic islands groups, the Canary Islands, the Azores and Madeira
- which, with Cape Verde, form the North Atlantic sub-region of Macaronesia - are
already part of the EU.
In Cape Verde, the army has never taken an active role in politics. The geographical
isolation of the islands means that conflicts in the West African region have had
negligible impact. The justice system and local institutions are relatively strong by
the standards of most African countries and corruption, whilst not unknown, is not
a concern. In the military league of the United Nations’ countries most likely to go
to war, Cape Verde ranks at 154 out of 156, reflected by a military expenditure of
just 0.7% GDP.
According to the United Nations Development Programme of 2003, Cape Verde is
a middle-income country, with the fourth highest Human Development Index of all
African nations behind only the Seychelles, Mauritius and Tunisia and is the highest
in Western Africa. Factors taken into account include GDP per capita, life expectancy,
adult literacy, education etc. The Economist Intelligence Unit Country Profile for Cape
Verde of 2003 reports, “Since independence there has been no significant incident of
civil unrest in Cape Verde, and changes of government have occurred peacefully”.
1.4
Cape Verde Property Pack
Economy
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One of the major stumbling blocks affecting development is the islands’ poor natural
resource base. A lack of water, combined with other deficiencies in the country’s
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 close 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 CVE 110 to €1, backed by increasing foreign
exchange reserves.
1.5
Tourism
Economic growth in Cape Verde has steadily improved over recent years, reflecting the
Government’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
out of the category of Least Developed Countries, only the second time a country has
achieved this progress since the initiative was introduced.
Thanks to the Government’s positive and constructive approach, Cape Verde’s tourism
industry has grown significantly in recent years, and is unquestionably set to continue
to flourish. The islands now regularly appear in top ten lists of the most popular new
destinations for UK tourists and increasing exposure from media coverage is helping
to drive growth.
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
economic stability that makes Cape Verde an attractive location for property investors.
The number of foreign tourists visiting Cape Verde was approximately 150,000 in 2000,
a figure which has steadily increased every year to around 280,500 in 2006. Based on
these figures, there is considerable room for further growth as airlines are currently
working at an average of 75% capacity. Most recent official statistics indicate a 22%
annual increase in the number of tourists visiting the islands and the Government
predicts that the country will attract one million visitors by 2015.
Cape Verde Property Pack
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In the past the majority of tourists visiting the islands have been from Italy but since
the launch of direct flights from Gatwick, Manchester and, in November 2007, from
Stansted, the number of visitors from the UK has rocketed.
Ryanair and Aer Lingus regularly connect Belfast, Dublin and Cork with Sal via
Gatwick, Manchester, Lisbon and Oporto. Direct flights are scheduled to operate
in the near future.
Of the estimated 280,582 people who visited Cape Verde in 2006, 59.6% stayed in Sal,
19.8% in Santiago, 7.7% in São Vicente, 7.5% in Boavista and 3% in Maio. But despite
the growth in tourist numbers the islands continue to operate at less than full capacity.
Flights from Europe and Africa
TACV and TAP Air Portugal fly direct every day between Sal and Lisbon and Santiago
and Dakar. Operating once or twice a week are routes to Sal and Santiago from Paris,
Amsterdam, Munich, Fortaleza, Banjul and Bissau. The airline plans to increase the
frequency and number of routes to include London, Rome, Dusseldorf, Frankfurt.
In 2006 Sal’s overall hotel occupancy rate was 55%, illustrating real ability to absorb
further growth. An encouraging sign of the appeal of high quality facilities on Sal is
demonstrated by an average occupancy rate of 90% at the five-star Rui Hotel since
opening in October 2005.
Between 1999 and 2006 the number of beds available for tourists increased by 35%,
from 3,874 to 10,360, 59% of them on the island of Sal.
A significant contribution to the growth of tourism has been made by the global surfing
community. Cape Verde’s beaches present ideal conditions for surfing, windsurfing
and kiteboarding and the islands are now a fixture on the calendars of the sports’
worldwide events.
The waters surrounding the islands are particularly attractive to divers, offering several
shipwrecks dating back to the 16 century and plentiful marine life. The islands also
make an excellent holiday destination for those looking for game fishing, bird watching
and mountain hiking.
1.6
Travel
There are currently three major international airports in Cape Verde, Amilcar Cabral
International Airport on the island of Sal, and Praia International Airport on the
island of Santiago and the recently opened Boavista International airport. A fourth
international airport in under construction on São Vicente, with completion due
for 2008.
Flights from the UK & Ireland
Flight time from the UK has been cut dramatically since the launch of direct routes
in November 2006. It’s now possible to reach Sal in less than five and a half hours
and being just one hour behind GMT, jet lag is not a concern.
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Flights from the United States
To cater for the expat community of Cape Verdeans in Boston, TACV flies direct
twice a week from Boston to Praia, Santiago.
TAP Air Portugal operates a route between Praia and New York via Dakar.
Charter airlines
TACV has an “open skies” policy in force, permitting other airlines to fly to Cape Verde
which helps to create price competition and reduce fares. Thomson flies to Sal on
Mondays from Gatwick and Italian carriers Volare and Azzura presently connect Milan
and Rome with Sal. German airline Tuifly opened up routes to Sal from Munich,
Dusseldorf and Frankfurt in autumn 2007 and there are also direct flights from
Scandinavia and the Czech Republic. When the new international airport in São Vicente
becomes operational in 2008 more airlines are expected to announce new routes to
meet consumer demand.
Island hopping
The recent launch of a private catamaran ferry service provides a fast and fun way of
getting around the islands. This will open up the smaller, less accessible islands such
as Fogo and Santo Antão to tourists and provide more scope for development and
opportunities for economic growth of the country.
TACV also makes it easy to hop between islands with a schedule of regular domestic
flights. Between Praia, Mindelo and Sal there are flights at least once a day.
Cruise ships
A boom in the number of cruise ships stopping at Cape Verde ports is predicted by
the Leeward Islands Chamber of Commerce. In 2006 between 20 and 30 cruise ships
dropped anchor in the islands’ waters and this is expected to double in 2007/8.
UK airline Astraeus flies direct to Sal from Gatwick and Manchester every Thursday
with prices starting at around £360 return before taxes. When the airport on São
Vicente is completed in 2008 Astraeus’ new routes will greatly increase flexibility for
UK visitors by taking in all three islands.
A clear sign of the growing popularity of the islands with the UK tourist market was the
October 2007 launch of a new service out of Stansted by Cape Verdean airline TACV.
Routes operate to Praia on Mondays and Sal on Thursdays.
Cape Verde Property Pack
Cape Verde Property Pack
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1.7
Foreign Investor Incentives
The Government has a thoughtful and constructive approach to tourism and foreign
investment and provides a range of incentives and a transparency that many other
established overseas markets would envy. Inflation is negligible, unemployment is
steadily decreasing and crime levels are extremely low.
As part of the Government’s policy to attract foreign private investment, the Foreign
Investment Law has been established to provide the following incentives for those
qualifying as foreign investors.
Guarantees and protections
The State of Cape Verde guarantees the non-discrimination of the external investor,
assuring equal treatment as well as security and protection of its assets and rights
within foreign investment, which cannot be nationalised or appropriated by the state
unless there is legal proof of public need.
Transfer of dividends and profits
It is guaranteed that the foreign investor may transfer out of the country in foreign
currency any amounts to which it is legally entitled as a result of duly registered
operations of foreign investment.
Benefits and exemptions: Cape Verde Law grants the foreign investor the exemption
of taxation of dividends and profits in the following circumstances:
• for a period of five years starting on the date of registry of the investment
• in cases where dividends and profits have been reinvested, according to the law,
in the same or in another business in Cape Verde.
After the period of exemption, where the profits are not reinvested, a tax of 10% will
be applied.
1.8
Miscellaneous Information
CurrencyThe local currency is the Cape Verdean Escudo which is pegged to the Euro.
Both escudos and euros are accepted with a conversion rate of around
110 escudos to one euro, making financial transactions simple and
straightforward. The country is currently seeking associate status with the
EU to further underpin its appeal as an attractive destination for investors
and tourists alike.
LanguageThe official language of Cape Verde is Portuguese with Creole also spoken
throughout the Islands. English, French, Italian, German and Spanish are also
generally understood.
Time Zone Cape Verde is one hour behind Greenwich Mean Time.
ReligionThe population is predominantly Roman Catholic with a small percentage
of Protestants.
PopulationCape Verde has 423,613 inhabitants (July 2007), 240,000 of which live on the
island of Santiago. Average age is 20.2 years and life expectancy is 71 years.
Around 70% of the population is literate.
Cape Verde Property Pack
10
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HealthCape Verde has exemplary sanitary standards on all the islands, with no
contagious or endemic diseases. These standards place it among the safest of
all African countries with many of the diseases that are a menace to mainland
Africa not present on Cape Verde. There are limited incidences of malaria, polio,
diphtheria and measles. The Agostinho Neto Hospital in Praia is one of the best
in West Africa providing specialists and equipment in most fields.
CrimePetty theft and burglary are common and although there has been a rise in
violent crime, it is very low by global standards. Cape Verdean authorities
report very low crime levels throughout the country.
2.0 Main Islands with opportunities
2.1
Santiago
Santiago is the biggest of the Cape Verde archipelago and of all the islands, has the
strongest African culture which sets the pace of life for its people. As the first of the
Cape Verde islands to be inhabited, it is considered to be the birthplace of the nation.
It is home to the country’s capital city Praia and half the country’s population,
currently around 240,000, half of which live in Praia. The city is modern, vibrant
and stylish with a high standard of infrastructure and amenities.
It is here that Portuguese settlers built Ribeira Grande, the first European village
on African soil, now known as Cidade Velha. This port played a pivotal role in the
development of the New World as a staging post for ships carrying slaves and
precious cargo between Europe and America.
Praia International Airport is one of the main gateways to Cape Verde and provides
a direct link with Boston, Massachusetts, which is home to the globe’s largest expat
community of Cape Verdeans. It also links directly with Stansted in the UK and
several European cities.
Santiago is a beautiful island with quaint villages, colourful market places and a
lively nightlife in Praia. The coastline is rocky, with beautiful white sandy beaches at
Sao Francisco, Tarrafal and Baixo. However, these beaches are not particularly large and
consequently, unless man-made beaches are constructed, could become over-crowded
in the future. There are two mountain ranges on the island, with lush valleys in the
centre and several permanent sources of water.
With temperatures ranging from warm to hot all year, any time is the best time to
visit Santiago to enjoy a beach holiday, walking or climbing in the mountains, diving
amongst the 16th century shipwrecks or birdwatching.
One of Cape Verde’s major developments is currently under construction on Santiago,
close to Praia. Ponta Bicuda is a five-star resort on a 170-acre peninsula with 2.2 miles
of coastline and will feature several swimming pools, restaurants, nightclubs, fitness
centre, lakes and mooring, all in a sustainable environment. Prices start at €86,400
and completion is due for 2011.
11
Cape Verde Property Pack
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2.2
Sal
2.3
São Vicente
As home to Cape Verde’s second international airport and as the first island to offer
direct flights from the UK, Sal has found itself at the forefront of the emerging tourist
industry. It is the focus of much of the development now underway in Cape Verde and
offers a wide range of property to suit all budgets and tastes.
São Vicente is the second most populous island of Cape Verde with 70,000 residents
concentrated mainly in the vibrant town of Mindelo, a former British refueling port.
The island measures 24km long and 16km wide and is generally arid and volcanic
but offers visitors both beautiful beaches and lush mountains scenery.
Just 30km long and 12km wide, Sal is home to 14,800 people with most living in the
capital, Espargos. Sal takes its name from the now inactive salt mines which offer
tourists the fabulous spa experience of floating in the shallow, intensely salty waters.
São Vicente is tipped to be the one to watch for investors as the new international
airport allows the many attractions of this island to become accessible to all. The
airport is due to open in early 2008 and will join the direct route operated by Astraeus
from Gatwick and Manchester as well as other European cities.
Sal’s major attraction is its miles of beautiful white sandy beaches. The land is virtually
flat and very arid with just the inactive volcano disrupting the view. Apart from around
the coast there is virtually no vegetation and the island depends on a sophisticated
system of hydroponics to produce fruit and vegetables.
The main resort of Sal is the small town of Santa Maria which now has a growing number
of new hotel developments, restaurants, night clubs and retail outlets. However, the
relaxed character of the town prevails and the pace of life remains laid back.
The five-start Rui resort, just outside Santa Maria, has seen 90% occupancy since
opening in October 2005, proving the strong demand for high quality accommodation
on the island.
The construction of two professional standard golf courses is underway as well as
three marinas and a casino. Developers are already exploiting the opportunities here
by opening up new beaches with the aim of increasing the capacity of Cape Verde
as a destination for nautical tourist activity.
Sal Island enjoys an average of 350 days of sunshine each year. Its excellent beaches
make it perfect for water sports, surfing, windsurfing, kite-surfing, fishing and diving
and a number of professionals have already forged links with Cape Verde by investing in
property on the island. Turtles frequent some of the eastern beaches and bird-watchers
will find interesting waders in the saltpans close to Pedra da Lume.
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São Vicente is without doubt the most vibrant and cultural of all the islands and
is rightly proud of its reputation as the place to go for great music. The bars and
restaurants of Mindelo attract talented musicians from all the islands and abroad
wanting to take their place on this admired world music stage. The highlight of
São Vicente’s calendar takes place in February when the streets of Mindelo are
thrown open to thousands of music fans from all over the world who come to
enjoy the Carnival, Cape Verde’s answer to Rio’s world famous party.
The scenery of São Vicente is stunning with Mindelo Bay considered to be amongst
the top ten most beautiful bays in the world. Mindelo town, with its architecture
old and new, is a maze of picturesque streets and fine examples of preserved
colonial architecture.
Mindelo Regency Tower is a landmark development with stunning views of the surrounding
islands and the distant African coast. Situated 300 metres from the glorious Copacabana
beach with the mountains behind, the complex will comprise 92 one, two and three
bedroom apartments and penthouses over 14 floors, all enjoying sea views. Prices start
at €86,000 and completion is expected for summer 2009.
One of the most lucrative options available so far to investors in Cape Verde is the
Vila do Atlantico resort in Santa Maria, which is being built on a plot just 100 metres
from the best beach on the island. The build is scheduled to commence in December
2007 and complete around December 2009, with prices ranging from just €80,000
to €230,000. Commercial units with bathrooms and outdoor areas will also be included
in the development and can be purchased from €90,000. Other major developments
are Djadsal Moradias, Cotton Bay, Paradise Beach, the Morabeza Residence and the new
Santa Maria Cinema development. Exclusive off-plan sales for all of these are currently
available through Nôscasa.
Cape Verde Property Pack
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Cape Verde Property Pack
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2.4
Boavista
Boavista – Portuguese for “good view” - is located 50km south of Sal and is the
closest island to the African mainland. It is the third largest of the islands but is
the least densely populated with less than 3,500 residents.
Boavista, like Sal, is blessed with miles of pure white sand beaches which form the
basis of its appeal to tourists and has already begun to benefit from its proximity
and similarities to its more well-known neighbour.
The main town of Sal Rei is the ferry port and home to the island’s airport, currently
in the process of being upgraded to international status and poised to bring Boavista
into the main arena for development upon completion in early 2008.
The existence of a valid habitation permit is a precondition for a valid conveyance
of built property to take place in Cape Verde and the existence of such a permit
presumes that a valid building licence was issued previously.
Maio
Maio is the least developed of the flat easterly islands with a population of 5,400.
Its terrain is very similar to Sal and Boavista with miles of white sand beaches being
its main attraction, but despite the hot, dry climate Maio boasts the biggest forest
park on the islands.
The island is a haven for nature and projects are underway to protect the fauna, flora
and clean water, a factor which must be taken into consideration by developers and
tourists alike.
There is an airport near Vila de Maio which currently accommodates domestic flights
from Santiago or visitors can reach the island by boat. Development here is just beginning
and there are now a handful of restaurants serving excellent food.
Salinas Beach Resort is a new development located in the main town of Porto Ingles
near to the harbour. The development comprises three apartment complexes, each
with their own pool, semi-detached two and three bedroom villas plus detached four
bedroom villas. The penthouse apartments and the frontline villas will have stunning
sea views. The resort will also have a 4 star hotel with swimming pool, bar, beach club,
garden, gymnasium, sauna and commercial area.
Prices start at €128,000 and completion is due for July 2009. Because development
has just begun, there are numerous plots of land available, offering exceptional value
to investors at this early stage.
14
Our consultants can explain to you the full legal process for purchasing a property
in Cape Verde and will ensure that you are aware of all your obligations and have
completed the necessary paperwork. Once you have found the property you would
like to buy, put forward an offer and agreed a price with the seller, a deposit may be
required. If the property is a new build, a reservation deposit of between £1,000 and
£3,000 will need to be paid to hold the property.
This is a summary of the legal process:
2.5
Cape Verde Property Pack
3.0 Legal purchase process
Boavistsa is a marine turtle conservation area and is significant in world music by
being the home of morna, the traditional Cape Verde ballad. The island also offers
excellent conditions for all water sports, mountain hiking and diving for treasure
amongst the centuries-old shipwrecks.
Creola Beach is currently under construction on the prime location of Boavista’s
tranquil Cabral Beach. The 278 studios, one, two and three bedroom apartments all
have large terraces with direct sea views and will be finished to a very high standard
by established interior designers. Creola Beach comes with rental guarantee for
24 months and is due for completion in 2009. Prices start at €102,200.
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1. Carry out Land Charges Searches at the local Municipal Authority and Land Registry
Offices. These will reveal whether there are charges registered upon the property or
any restrictions on the title.
The documents which should be obtained are the Land Registry Certificate
(Certidao do Registo Predial), Official Location Map (Planta de Localizacao)
and the Tax Information Certificate (Certidao Matricial).
If the property is not registered it is necessary to obtain a certificate confirming
that the property is not registered in anyone’s name (Certidao Pela Negativa) and
a tax certificate confirming this (Certidao Matricial Para o Efeito). With these two
documents it will be possible to register the property.
2. Check the payment of tax regarding the property, and bills for electricity and other services by asking the vendor to produce evidence of payment of such invoices.
3. Your solicitor might also need to obtain a power of attorney from you to represent
you in the Promissory Contract and Deed and to request the necessary Tax Cards
on your behalf. They are likely to draft the power of attorney in Portuguese and
attach a translation in English.
This document will have to be signed before a Notary and duly legalised by the Cape Verde Honorary Consul (for UK buyers this office is located in Liverpool).
4. Obtain a tax card on the purchaser’s behalf.
5.Sign the Promissory Contract of Purchase and Sale (Contrato Promessa de Compra e Venda). At this stage the purchaser will normally be expected to pay
a deposit, which is negotiable (10-30% is common practice).
In Cape Verde, the parties are contractually bound on signature of this Promissory
Contract of Purchase and Sale, which sets out the terms of the transaction - property
details, price, method of payment, completion date, warranties, penalties etc.
This contract should be signed before a Notary Public in Cape Verde. Until such
contract is exchanged the vendor is not committed and can change his mind.
Payment of the Property Tax (IUP) respecting the transfer is required.
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Cape Verde Property Pack
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6.Sign the final Deed of Conveyance (Escritura) before a Notary Public in Cape
Verde. This is the document that gives the purchaser proper title to the property.
The Deed must be scheduled with a minimum of 30 days’ notice.
7.Register the purchase at the local Land Registry and local Municipal Authority
so that title is enforceable against third parties. In Cape Verde, subsequent to
the signature of the Deed, the Notary will prepare and send a report to the local
Municipal Authority regarding the transaction. The Municipality will then update
its records accordingly and register the new ownership of the property.
Notarial and registration fees and stamp duty will be approximately 2.5% of
the property’s attributed value. They are payable on signature of the Deed of
Conveyance.
8.A contract needs to be signed with the providers of services such as water, gas
and electricity. We do not normally arrange this for our clients, but can assist
on request. Clients are advised to arrange for final meter readings to take placed
prior to completion.
9. The Taxes regarding Property can be listed as the following:
• Transfer Tax - flat rate of 3% on the attributed value to be paid before the Deed
of purchase and sale.
• Holding Property/Annual Rates - flat rate of 3% on 25% of the attributed
value to be paid annually in April or in two instalments in April and September
of each year.
• Capital Gains Tax - (i) Capital Gains regarding plots for construction are taxable
if their sale value exceeds a 100% increase of the value at which they were
initially purchased and; (ii) Capital Gains regarding any other property are taxable
if their sale value exceeds a 30% increase of the value at which they were initially
purchased. In both (i) and (ii), the Capital Gain is taxed at a flat rate of 3% and
should be paid within 30 days of the Deed, together with the submission of a
Capital Gains Statement (Declaracao de Mais Valias).
• Inheritance/Gift Tax - Any property transmitted by inheritance or by gift is taxed
at a flat rate of 3% on the attributed value.
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4.0 Financing a purchase
Finding the right finance deal for your property investment in Cape Verde is central to
the success of your venture. Every country has its own laws and procedures that must
be observed in order to ensure the legality and security of your purchase so, with this
in mind, we have established Nôscasa Mortgages in partnership with established UK
independent mortgage broker and independent financial adviser.
We offer two levels of service, both charged at a fixed fee, so you know exactly what
you can expect from us and how much it will cost.
The full consultation service covers every aspect of buying a property in Cape Verde,
including sourcing and arranging the most advantageous mortgage deal, detailed costings
for all financial liabilities, capital gains and income tax implications, liaison with solicitors
and advice on any other financial matter that might affect the purchase.
The banks of Cape Verde are all developing their ability to provide mortgages to foreign
investors and welcome enquiries. For purchasers wishing to apply directly to Cape Verde
banks for finance the following documents will be required:
Private individuals:
• Letter of request
• Plot of Land Registration Certificate or Building description
edited by the conservatory
•Architectural project approved by the city council
• Calculation of stabilities
Companies:
•Commercial registration certificate
•Social pact
•Copy of the publicised official bulletin
•Last two years balance or opening balance (for a new company)
•Study of investment project viability
•Personal details and list of partners’ goods
10.Once you have acquired the property, it is advisable that you execute a Cape
Verdean will to deal with your property in Cape Verde. Although an English will
is valid, obtaining probate in Cape Verde is easier if there is a Cape Verdean will
in force.
Cape Verde Property Pack
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Cape Verde Property Pack
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4.1
Typical Mortgage Loan Facility
A mortgage loan facility to purchase residential property by foreign customers not
resident in Cape Verde.
Type Medium/long term loan facility to finance foreign customers not resident in
Cape Verde with a view to purchase residential properties
Borrowers
Borrowers will have to be customers of the chosen local bank.
Purpose Mortgage loan facility to buy residential property.
Amount
Up to 70% of property value (resulting from bank evaluation).
Tenure
Up to 10 years; though longer tenures may be offered on a case by case basis.
Repayment
onthly, in Euros, the exchange rate being fixed at 1 EUR = 110.265 ECV
M
during the tenure of the facility.
Interest RateThis varies according to the lender, but is typically EURIBOR + 3.5%
depending on credit worthiness of customer and the amount of loan.
Application fee1% of the facility amount or other fee to be negotiated.
Insurance
4.2
First-ranking mortgage and fire insurance of the property in favour of BCA.
Account opening procedures for non-residents
The following documentation is required:
•Copy of Passport
•Completion of BCA’s account opening form including information on residence,
income, parents names, contacts, profession, etc.
•Minimum deposit of 50.000, ECV in the demand deposit account, made directly
or by means of bank transfer.
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5.0 Contact Details
Sal
Nôscasa LDA
Rua 1 de Junho
Na Vila de Santa Maria
Ilha do Sal
Cape Verde
Tel: +238 242 8108
Fax: +238 241 2458
Web:www.Nôscasacv.com
São Vicente
Mindelo
Tel: +238 232 5465
Boavista
Sal Rei
Tel: +238 251 1717
Santiago
Praia
Tel: +238 261 6725
UK Office
1 Northumberland Avenue
Trafalgar Square
London WC2N 5BW
United Kingdom
Tel: +44 (0) 20 7872 5690
Fax: +44 (0) 20 7872 5611
Cape Verde Property Pack
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Cape Verde Property Pack
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head office:
Nôscasa LDA
Rua 1 de Junho
Na Vila de Santa Maria
Ilha do Sal
Cape Verde
t: +238 242 8108
f: +238 241 2458
w: www.noscasacv.com