Legal Update/ Cabo Verde: Special Economic Zone for Technologies

 

Cabo Verde has approved legislation that creates and regulates its new Special Economic Zone for Technologies (ZEET), according to official legal database Legis-PALOP+TL.

ZEET is located in the ‘Digital Islands Technological Park’, also covering the contiguous technological real estate areas of “Castelon Vale”, in Praia, and “Julion Vale”, in Mindelo, and is the center of all digital strategy in Cape Verde.

As of May 13, 2022, technology-based companies that develop activities that have the following requirements are authorized to operate in ZEET:
⦁ Capacity or high potential for wealth creation, added value and jobs, particularly in the youth segment;
⦁ Export potential, particularly in the African sub-region;
⦁ Potential in terms of promoting a culture of innovation, fostering creativity and competitiveness in the technology park ecosystem;
⦁ Ability to generate the flow of knowledge, research and technological development, namely through creative and collaborative processes, in favorable environments for incubation, integration in digital cluster networks and spinoff processes;
⦁ Capacity to develop digital products and services, supported by reliable innovation research and development processes, contributing to the creation of a park of digital assets of national intellectual property;
⦁ Capacity and infrastructure to incubate up to ten start-ups a year, in Investment and Development Programmes, guaranteeing, in particular, conditions to carry out Research and Development Projects, Computing Infrastructures, Secure Connectivity, Instruments for Management, Mentoring and Monitoring; or
⦁ Carry out technological activities at the International Business Center (CIN).

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Companies authorized to operate in ZEET can benefit, in particular, from tax and customs incentives:
⦁ Reduced rate of 2.5% of the Corporate Income Tax (IRPC);
⦁ Income Tax Exemption applicable to natural or legal persons who participate in the share capital of companies licensed and operating in ZEET;
⦁ Exemption from Value Added Tax (VAT), under the terms of the VAT Code and Stamp Duty in operations involving the contracting of financing for purpose of investment;
⦁ Exemption from the single property tax to be granted by the competent municipal authorities;
⦁ Exemption from import duties on materials and equipment, raw and subsidiary materials, materials and finished and semi-finished products intended for incorporation into products manufactured within the scope of industrial projects.

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Companies authorized to operate in ZEET can also benefit from financial and other incentives:
⦁ Support in creating skills and other institutional support for small, medium and micro-enterprises;
⦁ Exemption from fees and other notary charges in the incorporation and registration of companies;
⦁ Reduction of 50% in fees due for notary and registration acts resulting from the purchase and sale of real estate for its premises;
⦁ Existing incentives for qualification and certification attributable to start-ups;
⦁ Special and preferential prices for broadband and 5G;
⦁ Regulatory legal framework (SandBox) that guarantees a responsive and favorable environment for testing disruptive solutions based on new information and communication technologies, namely 5G, BlockChain, Cloud Computing, among others; or
⦁ Special labor regimes different from the labor legislation in force in Cape Verde.

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