Cape Verde, also known as Cabo Verde, is an archipelago in the Central Atlantic Ocean, off the West coast of Africa. It is made up of ten islands of volcanic origin and covering slightly more than 1500 square miles. There are 543,000 people living on the islands. Cape Verde has a nominal GDP of $3,651 per capita and a PPP (purchasing power parity) of $7,728 per capita. The country primarily exports fuel, hides, shoes, and fish.
As a country of fast development, Cape Verde has been the go-to destination for business people from all over the world. In addition to this, the local government has some interesting incentives to encourage foreign business owners to invest.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Cape Verde
Being a sole proprietor in Cape Verde entails the following:
- Business registered as a sole proprietorship is not incorporated
- The owner has full liability for the company
- The owner takes all the company’s profits
- It requires very little preparation, and it’s pretty easy to discontinue
Registration process of a sole trader in Cape Verde
Starting a sole proprietorship is the easiest way to start a business. Many foreign residents in Cape Verde opt for this, as it is a good way to get a feel for the market before investing, and it is easy to close down your sole proprietorship or transition from it to a limited liability company.
Register a business name
A sole trader can use their given name as the name of their business. In Cape Verde, business names should be registered with the Commercial Registry Department with the Camara de Comercio Industria e Servicos de Sotavento (Chamber of Commerce). This takes up to two days and costs CVE 20,000.
Choose a bank account
Sole proprietorships can use the owner’s account number as the designated account of the business. A new bank account can also be opened and registered with the Chamber of Commerce in Praia.
Obtain a Tax ID Number - NID
In order to get a tax identification number, an applicant will need:
- Two filled out copies of Form 109
- A photocopy of your passport (for foreign nationals) or ID card (for residents)
- A photocopy of the identity of a substitute tax
As soon as a person starts to generate income in Cape Verde, they must apply for the NIF with the General Directorate of Contributions and Taxes (DGCI).
Both foreign and domestic individuals are eligible to get a tax identification number, and getting it for the first time is free. After the first time, it costs CVE 600 for individuals and CVE 2,779 for legal entities.
Obtain proper licenses
Finally, a sole proprietor that decides to deal in a specific industry should register for all the mandatory licenses.
The first one is the municipal license, and it is required for all businesses operating in the capital city of Praia. The good news is that once a business applies for the license, the owner can submit all the necessary documentation in a single place.
The other type is called the license of activity. This license (or licenses) should cover the scope of the business a sole proprietorship is dealing in. If a business is looking to export fish harvested from local sources, it will need to have the right fishing and export licenses.
All licenses can be acquired with the Chamber of Commerce in Praia.
The entire registration process can be completed in a day or two with the help of the Citizens’ House (Casa de Cidadão).