CAPE VERDE AS A FINANCIAL HUB

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Cape Verde is an archipelago located off the coast of Western Africa, south of the Canary Islands, covering a combined land area of 4,033 square kilometers, with a population of approximately 400,000 inhabitants, predominantly Catholic.

Discovered in 1460, the Cape Verde Islands were at the time entirely uninhabited. The archipelago was subsequently colonized by the Portuguese. In 1975, the country peacefully gained its full independence from Portugal and maintained Portuguese as the official language.

The capital of Cape Verde – cidade da Praia – is located in the south of the Santiago Island.

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Within the African context, Cape Verde has a highly significant rate of literate people. The younger workforce is abundant, especially senior level professionals graduated from Portuguese and Brazilian universities.

The Republic of Cape Verde is a stable parliamentary democracy, marked by a peaceful transition of power between the two major parties. In the late 80s, the Government embarked on a major privatization programme, aimed at a fully mature market economy. Since then, the country has been able to attract significant foreign investment, in particular from countries such as Portugal, Italy and Spain.

Cape Verde has concluded double taxation agreements and information exchange agreements, inter alia with Portugal, complies with the parameters and guidelines of the OECD model treaty, and is currently negotiating similar agreements with other countries.

The programme responsible for attracting foreign investment to the financial sector was introduced in 1988 with the adoption of the first legislative package, aimed primarily at enabling the development of the international financial services sector, subsequently improved with amendments adopted in 2005.

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The legislation grants some incentives until 2017, envisaging the establishment and operation of international banks and insurance companies, referred to as "International Financial Institutions” (IFIs). However, the regulatory authorities have been very careful in approving candidates so as not to tarnish the reputation of this emerging financial hub.

On par with the strong protection laws on the confidentiality of the identity of clients and operations of IFI’s, new legislation on anti-money laundering was introduced in 2002, and updated in 2009, strictly following criteria applied thereon and in accordance with FATF/GAFI policies and other international organisations.

It is nonetheless worth emphasising that Cape Verde has never been included in any of the so-called "tax-haven blacklists" or "non-cooperative territories" created and managed by OECD, FATF/GAFI, other international organisations or any other country.

Under the provisions of Cape Verdean law and administrative practice, "postal banks" are not permitted. All International Financial Institutions are required to have local equipped facilities, with approved licenses, their own staff structure and resident directors.

The accounting model of the IFIs complies with international accounting standards. In addition to being supervised by the Central Bank, the accounts are subject to two types of audit: an on-going, internal audit performed by statutory auditors and an external audit, carried out by an audit firm of renowned international reputation.

Regarding the accession of Cape Verde to FATCA, the US has postponed the deadline for signing the IGA agreement with Cape Verde. Despite this delay, the Cape Verdean financial institutions have not been negatively impacted from 1 January 2015.

...

Cape Verde is an archipelago located off the coast of Western Africa, south of the Canary Islands, covering a combined land area of 4,033 square kilometers, with a population of approximately 400,000 inhabitants, predominantly Catholic.

Discovered in 1460, the Cape Verde Islands were at the time entirely uninhabited. The archipelago was subsequently colonized by the Portuguese. In 1975, the country peacefully gained its full independence from Portugal and maintained Portuguese as the official language.

The capital of Cape Verde – cidade da Praia – is located in the south of the Santiago Island.

...

Within the African context, Cape Verde has a highly significant rate of literate people. The younger workforce is abundant, especially senior level professionals graduated from Portuguese and Brazilian universities.

The Republic of Cape Verde is a stable parliamentary democracy, marked by a peaceful transition of power between the two major parties. In the late 80s, the Government embarked on a major privatization programme, aimed at a fully mature market economy. Since then, the country has been able to attract significant foreign investment, in particular from countries such as Portugal, Italy and Spain.

Cape Verde has concluded double taxation agreements and information exchange agreements, inter alia with Portugal, complies with the parameters and guidelines of the OECD model treaty, and is currently negotiating similar agreements with other countries.

The programme responsible for attracting foreign investment to the financial sector was introduced in 1988 with the adoption of the first legislative package, aimed primarily at enabling the development of the international financial services sector, subsequently improved with amendments adopted in 2005.

...

The legislation grants some incentives until 2017, envisaging the establishment and operation of international banks and insurance companies, referred to as "International Financial Institutions” (IFIs). However, the regulatory authorities have been very careful in approving candidates so as not to tarnish the reputation of this emerging financial hub.

On par with the strong protection laws on the confidentiality of the identity of clients and operations of IFI’s, new legislation on anti-money laundering was introduced in 2002, and updated in 2009, strictly following criteria applied thereon and in accordance with FATF/GAFI policies and other international organisations.

It is nonetheless worth emphasising that Cape Verde has never been included in any of the so-called "tax-haven blacklists" or "non-cooperative territories" created and managed by OECD, FATF/GAFI, other international organisations or any other country.

Under the provisions of Cape Verdean law and administrative practice, "postal banks" are not permitted. All International Financial Institutions are required to have local equipped facilities, with approved licenses, their own staff structure and resident directors.

The accounting model of the IFIs complies with international accounting standards. In addition to being supervised by the Central Bank, the accounts are subject to two types of audit: an on-going, internal audit performed by statutory auditors and an external audit, carried out by an audit firm of renowned international reputation.

Regarding the accession of Cape Verde to FATCA, the US has postponed the deadline for signing the IGA agreement with Cape Verde. Despite this delay, the Cape Verdean financial institutions have not been negatively impacted from 1 January 2015.

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