Cape Verde Improves Landscape for Investment in Tourism

According to news reports, the government of Cape Verde announced the creation of a Tourism and Investment Agency designed to provide better conditions to attract more foreign investment, promote domestic investment, and diversify and qualify the tourism sector, which contributes 20% to Gross Domestic Product (GDP).

Júlio Morais, former Cabo Verde Ambassador to China, who will chair the Tourism Agency, said it would focus efforts and resources on the mobilisation of "adapted and innovative funding mechanisms" for small and medium-sized Cape Verdean companies.

The government has promised to "continue to invest in improving the business climate, transforming it into a competitive factor and to create innovative tools and techniques to promote tourism".

The new Cape Verde Tourism and Investment Agency will coordinate three regional centres: One in the north, which will be located on S. Vicente Island; one on the central island of Sal and another in the southern island of Santiago.

Cape Verde is attracting more and more tourists and its property market has grown considerably in the last decade, with no sign of slowing in 2016. The fact that Cape Verde is experiencing a tourism boom shows a continued demand for holiday rental properties, from private villas right through to beachfront holiday resorts. For as long as people continue to travel to Cape Verde, the property market will continue to grow.

The recent and on-going prosperity of the Cape Verde islands is largely connected to the continual growth in tourism. This has also been combined with a democratically elected and stable government structure and a clear strategy to develop the islands in line with that increasing touristic demand. In recent years, there have been key infrastructure improvements including supporting foreign investment and leisure development, as well as modernising the utilities, telecommunications and transport links.

For the investor, Cape Verde can offer consistency in rental returns and capital growth and this is because there is consistent demand for properties all year around. This is largely thanks to fact that it is a safe country, with a low crime rate, and that it always has exceptional weather. Unlike some countries, Cape Verde doesn't really have a low season (tourists can enjoy temperatures in excess of 25 degrees all year round) which makes it an attractive holiday destination at any time of the year.

Furthermore, investors are attracted to the fact that Cape Verde is well-protected. The government has strict legislation in place that only allows low level and low-density projects to proceed. This not only protects the look and feel of the Islands, but also restricts the number of properties that can be built. A similar principle is applied to the land in Cape Verde. This means that much of it is protected and cannot be sold to developers.

In addition, the size of the islands dictates the level of development that is possible, an advantage over vast countries such as Brazil, Egypt or Turkey. The result is exclusivity. Property ownership is limited, and owners effectively benefit from an excess of supply, resulting in consistent rental returns, and impressive capital growth. Ultimately, that is what real estate investment is all about, and it seems that Cape Verde has the perfect dynamic at the current time.