UNCTAD UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT The Investment Policy Review of Cabo Verde is the latest in a series of investment policy reviews INVESTMENT POLICY REVIEW undertaken by UNCTAD at the request of countries interested in improving their investment framework and climate. The economies included in this series are: Egypt (1999) Kenya (2005) The former Yugoslav Uzbekistan (1999) Colombia (2006) Republic of Macedonia (2011) Uganda (2000) Rwanda (2006) Mozambique (2012) Djibouti (2013) Peru (2000) Zambia (2007) Mongolia (2013) Mauritius (2001) Morocco (2008) Bangladesh (2013) Ecuador (2001) Viet Nam (2008) Ethiopia (2002) Republic of Moldova (2013) Dominican Republic (2009) United Republic of Republic of the Congo (2015) I Nigeria (2009) Tanzania (2002) The Sudan (2015) CABO VERDE Mauritania (2009) Botswana (2003) Bosnia and Herzegovina (2015) Ghana (2003) Burkina Faso (2009) Kyrgyzstan (2015) Lesotho (2003) Belarus (2009) Madagascar (2015) Nepal (2003) Burundi (2010) Tajikistan (2016) Sri Lanka (2004) Sierra Leone (2010) The Gambia (2017) Algeria (2004) El Salvador (2010) South-East Europe (2017) Benin (2005) Guatemala (2011) Lebanon (2018) CABO VERDE Visit the website on IPRs http://unctad.org/ipr UNITED NATIONS Layout and Printing at United Nations, Geneva – 1821601 (E) – August 2018 – 486 – UNCTAD/DIAE/PCB/2018/2 CABO VERDE New York and Geneva, 2018 © 2018, United Nations The work is available through open access by complying with the Creative Commons licence created for intergovernmental organizations, at http://creativecommons.org/licenses/by/3.0/igo/. The designations employed and the presentation of material in this work do not imply the expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Photocopies and reproductions of excerpts are allowed with proper credits. The publication has not been formally edited. United Nations publication issued by the United Nations Conference on Trade and Development. UNCTAD/DIAE/PCB/2018/2 UNITED NATIONS PUBLICATION ISSN: 2414-5084 eISSN: 2414-5475 NOTE Under its overall mandate on trade and development, the United Nations Conference on Trade and Development (UNCTAD) serves as the focal point within the United Nations Secretariat for all matters related to foreign direct investment (FDI). Its work is carried out through intergovernmental deliberations, research and analysis, technical assistance activities, seminars, workshops and conferences. The following symbols have been used in the tables: • Two dots (..) indicate that data are not available or not separately reported. Rows in tables have been omitted in those cases where no data are available for any of the elements in the row. • A hyphen (-) indicates that the item is equal to zero or its value is negligible. • A blank in a table indicates that the item is not applicable. • A slash (/) EHWZHHQGDWHVUHSUHVHQWLQJ\HDUVtIRUH[DPSOHLQGLFDWHVDƂQDQFLDO\HDU • Use of an en dash (–) EHWZHHQGDWHVUHSUHVHQWLQJ\HDUVtIRUH[DPSOHtVLJQLƂHVWKH full period involved, including the beginning and end years. • Reference to “dollars” ($) means United States dollars, unless otherwise indicated. • Annual rates of growth or change, unless otherwise stated, refer to annual compound rates. • Details and percentages in tables do not necessarily add to totals because of rounding. Cabo Verde - Note iii ACKNOWLEDGEMENTS This report was prepared by the Investment Policy Reviews Section under the supervision of Chantal Dupasquier, Chief of the Section, Division on Investment and Enterprise (DIAE). Overall guidance was provided by Joerg Weber, Head of the Investment Policies Branch, and James Zhan, Director, DIAE. The report was drafted by Ariel Ivanier, Massimo Meloni, Kai Partale and Irina Stanyukova. Substantive inputs were provided by Hamed El Kady, Fulvia Farinelli, Laina Maia and Irene Rey Landeira. $WYDULRXVVWDJHVRISUHSDUDWLRQWKHUHSRUWEHQHƂWHGIURPFRPPHQWVGLVFXVVLRQVDQGRULQSXWVIURP(UPLDV Biadgleng, Joseph Clements, Maha El Masri, Joachim Karl, Teresa Moreira, Fiorina Mugione, Jason Munyan, Claudia Roethlisberger, Christoph Spennemann, Elisabeth Tuerk and Paul Wessendorp. FDI data were provided by the Central Bank of Cabo Verde and the Trends and Data Section, DIAE. Overall statistical assistance was also provided by Jovan Licina. Graphic, production and printing support was under the responsibility of the Document Management Service of UNCTAD and the Production and Support Service of the United Nations 2IƂFHLQ*HQHYD7KHUHSRUWZDVIXQGHGE\WKH*RYHUQPHQWRI&DER9HUGHDQGE\WKH*RYHUQPHQWRI6ZHGHQ Cabo Verde - Acknowledgements iv PREFACE UNCTAD Investment Policy Reviews (IPRs) are intended to help countries improve their investment policies with the objective of meeting the Sustainable Development Goals and to familiarize governments and the international private sector with an individual country’s investment environment. The reviews are considered by the UNCTAD Commission on Investment, Enterprise and Development. The analysis is based on the UNCTAD Investment Policy Framework for Sustainable Development (IPFSD) and its core principles and guidelines (UNCTAD, 2015a). The recommendations of the IPR are then implemented with the technical assistance of development partners, including UNCTAD. The support to beneficiary countries is delivered through a series of activities that can span several years. &RQVLVWHQWZLWKWKH6'*V,35VHQFRXUDJHRIƂFLDOGHYHORSPHQWDVVLVWDQFHDQGLQYHVWPHQWLQFRXQWULHVZKHUH needs are greatest. The IPR recommendations are in line with countries’ national development plans and focus on key development sectors, including agriculture, mining, manufacturing, tourism and infrastructure. By helping countries in this manner, the IPR programme contributes to: SDG 1 target b: “to create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions”. 6'* WDUJHW WR qDFKLHYH KLJKHU OHYHOV RI HFRQRPLF SURGXFWLYLW\ WKURXJK GLYHUVLƂFDWLRQ technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors”. 6'*WDUJHWEqWRHQFRXUDJHRIƂFLDOGHYHORSPHQWDVVLVWDQFHDQGƂQDQFLDOƃRZVLQFOXGLQJ foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes”. 6'*WDUJHWqWRPRELOL]HDGGLWLRQDOƂQDQFLDOUHVRXUFHVIRUGHYHORSLQJFRXQWULHVIURPPXOWLSOH sources”. The IPR of Cabo Verde was initiated at the request of the Government. It analyses the legal and regulatory framework for investment, and contains a strategic analysis on how to better utilize FDI in the tourism sector as DOHYHUDJHIRUVXVWDLQDEOHGHYHORSPHQW7KH,35LVEDVHGRQWZRIDFWƂQGLQJPLVVLRQVXQGHUWDNHQLQ-XO\DQG December 2017 and information current at that time, as well as additional information made available to UNCTAD until May 2018. The mission received the full cooperation of the relevant ministries, departments and agencies, LQSDUWLFXODU&DER9HUGH7UDGH,QYHVW7KHPLVVLRQDOVREHQHƂWHGIURPWKHYLHZVRIWKHSULYDWHVHFWRUERWKIRUHLJQ and domestic, as well as bilateral donors and development agencies. The Government and the United Nations Development Programme (UNDP) in Cabo Verde provided substantive contributions as well as logistical support to the IPR process. A preliminary version of this report was discussed at national validation workshops in Praia RQ$SULO6DQWD0DULDRQ$SULODQG0LQGHORRQ$SULO7KHƂQDOUHSRUWUHƃHFWVFRPPHQWVIURP stakeholders, including ministries and agencies of the Government of Cabo Verde. Geneva, June 2018 Cabo Verde - Preface v CONTENTS NOTE ........................................................................................................................................................................iii ACKNOWLEDGEMENTS ............................................................................................................................................iv PREFACE ...................................................................................................................................................................v ABBREVIATIONS .......................................................................................................................................................ix KEY MESSAGES .....................................................................................................................................................xiii CONTEXT ...................................................................................................................................................................1 CHAPTER 1. THE INVESTMENT FRAMEWORK. 9 $ )',VSHFLƂFSROLF\IUDPHZRUN. 10 1. Entry and establishment ...........................................................10 2. Treatment and protection ..........................................................11 3. International investment agreements ..................................................13 B. Company establishment ...............................................................17 C. Environment .......................................................................20 D. Labour and skills development ..........................................................23 1. General labour regulations .........................................................23