Cape Verde 2026: capital gains at 1% and a currency pegged to the euro, in the Atlantic sun

Capital gains on the sale of foreign shares and ETFs fall under IRPS category E and are subject to a final flat charge of just 1%. This is the archipelago's main tax advantage for an investor: where a typical Western investor would face 25% to 35% on the same gains, Cape Verde charges 1%. The final nature of the charge means the tax is due once, with no reintegration into a progressive scale. Source: PwC Worldwide Tax Summaries Cabo Verde 2025-2026.

Foreign-source dividends fall under IRPS category D, at a final rate of 10%. A foreign tax credit is granted, equal to the lower of the withholding levied abroad and the IRPS due: a 15% US withholding thus erases the 10% Cape Verdean charge, but an Irish UCITS ETF, which suffers no withholding, leaves the full 10% to pay. This is a point to model according to the exact structure of your portfolio. Source: PwC 2026.

Yes, and this is a decisive argument. The Cape Verdean escudo is pegged to the euro at a fixed parity (110.265 CVE per euro) under the monetary cooperation agreement with Portugal. Volatility against the euro is nil: for a retiree or investor whose income and capital are in euros, exchange-rate risk disappears, unlike a freely floating currency. Local inflation runs at around 1.2%. Source: Banco de Cabo Verde and the Portugal-Cape Verde monetary cooperation agreement.

Barely. This is the main limitation of the setup: Cape Verde has signed double-taxation treaties only with Portugal, Guinea-Bissau, and Macao. There is no treaty with the United States and no Irish UCITS treaty. The absence of a treaty can complicate the treatment of certain withholding taxes and the resolution of double taxation. A review with an adviser familiar with both systems is essential. Source: Cape Verde treaty network, 2026.

No for the wealth tax: Cape Verde levies none. For inheritance, transmission in the direct line is exempt (0%), a clear advantage over the progressive inheritance taxes found in many Western countries, where the rate can reach 30% to 45% on large estates. This combination strengthens the estate-planning appeal of the archipelago for anyone preparing a transmission. Source: KPMG Inheritance Guide and PwC 2026.

The cost of living is low, with an index around 42. A two-bedroom flat rents for about €450 a month, a restaurant meal for two costs close to €25, and a pint is around €1.5. In Praia, real estate runs at about €1,400 per square meter in the center and €900 on the outskirts. A couple can therefore live comfortably on a budget well below that of a major European city, allowing for the premium on imported goods on an archipelago.

Praia, the capital on the island of Santiago, concentrates administration, services, and urban life. Mindelo, on Sao Vicente, is known for its cultural scene. The islands of Sal and Boa Vista, more touristic and beach-oriented, offer a hot, dry climate much sought after by lovers of beaches and wind. The choice depends on the trade-off between urban services, in Praia, and a beach lifestyle, in Sal or Boa Vista. Source: local data, 2026.

Cape Verde has a reputation as a peaceful and politically stable archipelago, regarded as one of the most solid democracies in West Africa. The 2025 Global Peace Index lists the country but does not publish a numerical score, which is why we remain cautious and qualitative. The concrete risk for an expatriate is petty crime in the tourist areas of Praia or Mindelo, not violent crime. Source: Institute for Economics and Peace, Global Peace Index 2025.

Healthcare is mid-level and concentrated in Praia and Mindelo, where decent private clinics handle routine medicine. But the archipelago is isolated and the technical capacity remains limited for serious cases, which are often referred to Portugal. International health insurance including medical evacuation is therefore strongly recommended, even more than in a mainland destination. Source: international insurers, 2026.

There is no dedicated retirement visa as in Portugal. Residence is obtained mainly through investment, an employment contract, or family reunification. The exact framework and financial thresholds should be confirmed with the Direcao de Estrangeiros e Fronteiras, as they can change. In practice, a visitor enters without a visa for a short stay, then files a residence application on the spot with proof of resources and housing. Source: Cape Verdean authorities, to be confirmed, 2026.

The corporate income tax rate has been 20% since 2025, with a 2% municipal surcharge in Praia and Mindelo, bringing the effective rate to about 20.4% in those cities. This mainly concerns profiles considering housing a business or a holding company there, and far less the individual investor living off capital gains, already taxed at 1%. Source: PwC Worldwide Tax Summaries 2026.

This is the main point of caution. On capital gains, the 1% rate applies and remains very advantageous. But on distributed dividends, an Irish UCITS ETF suffers no withholding at source, so the Cape Verdean tax credit is nil and the 10% of IRPS category D remains fully due. For a portfolio heavily tilted toward dividends through UCITS ETFs, this 10% charge must therefore be modeled before drawing conclusions. Source: PwC 2026 and UCITS ETF structure.