O Commercial Law[2] in Cape Verde has played a crucial role in economic development and in structuring business relations in the country. With a growing economy and an increasingly dynamic business environment, Cape Verde's commercial legislation has evolved to meet the needs of the market and promote a safe and predictable legal environment for investors and entrepreneurs.
Commercial legislation in Cape Verde is strongly influenced by the system[8] Portuguese law, reflecting the country's colonial history. However, since independence, the archipelago has worked to adapt and modernise its commercial laws, seeking to harmonise them with international and regional standards. One notable example is Cape Verde's accession to the World Trade Organisation (WTO)This has led to significant reforms in the sector.
In recent years, the Cape Verdean government has implemented a series of reforms to improve the business environment, including simplifying procedures for starting a business, protecting investors' rights and facilitating international trade. These initiatives are part of a wider effort to attract foreign direct investment and stimulate sustainable economic growth.
In addition, the increasing digitalisation of business processes and the introduction of new technologies have challenged the existing legal framework, requiring legislative updates to deal with emerging issues such as e-commerce and data protection. The modernisation of Law[9] Trade in Cape Verde is therefore a priority to ensure that the country can compete effectively on the global stage.
This report seeks to explore the nuances of commercial law in Cape Verde, analysing its historical evolution, the impact of recent reforms and future prospects for the development of the sector. Throughout the document, the main legislations, relevant court decisions and trends shaping the commercial environment in the country will be examined.
Index
Commercial law in Cape Verde is a branch of the private law[3] which regulates commercial and business activities in the country. This field of law is essential for guaranteeing legal certainty in commercial relations and promoting economic development. Below we will explore the main aspects that make up the structure of Commercial Law in Cape Verde.
Cape Verde's Commercial Code is the legal basis governing commercial activities in the country. This code was originally based on the Portuguese Commercial Code, but has undergone several changes to adapt to the specificities of the Cape Verdean context. It covers a wide range of topics, including commercial contracts, credit securities, bankruptcy and company recovery.
The Commercial Code is divided into several parts, each dealing with specific aspects of commercial activities. For example, the part on commercial contracts regulates the obligations and rights of the parties involved in commercial transactions. In addition, the code establishes rules for constitution[6] and operation of commercial companies, including rules on the liability of shareholders and the administration[4] companies.
Commercial companies are legal entities created to carry out economic activities for profit. In Cape Verde, the constitution and operation of commercial companies are regulated by the Commercial Companies Code. This code defines different types of companies, such as public limited companies, private limited companies and partnerships.
Each type of society[7] has specific characteristics in terms of shareholder liability, share capital and administrative structure. For example, in public limited companies, the capital is divided into shares, and shareholders have liability limited to the value of the shares they own. In private limited companies, the capital is divided into shares and the shareholders have liability limited to the value of their shares, but may be jointly and severally liable in specific cases.
Commercial contracts are agreements between parties that establish obligations and rights related to commercial activities. In Cape Verde, commercial contracts are governed by both the Commercial Code and the Civil Code. These contracts can include a variety of agreements, such as purchase and sale agreements, agency agreements, distribution agreements, among others.
An important aspect of commercial contracts is freedom of contract, which allows the parties to negotiate the terms of the contract. contract[11] according to their needs and interests. However, this freedom is limited by general principles of law[1]These include good faith and fairness, which aim to protect the parties against unfair commercial practices.
Bills of exchange are documents that represent an obligation to pay and are widely used in commercial transactions to facilitate credit and the circulation of money. In Cape Verde, the main types of securities include cheques, bills of exchange and promissory notes.
Each type of credit security has specific characteristics and rules regarding issue, endorsement, protest and prescription. For example, cheques are demand orders, while bills of exchange and promissory notes can have future maturities. The use of securities is regulated to ensure security and reliability in commercial transactions.
Insolvency and company recovery are critical areas of commercial law, especially in times of economic hardship. In Cape Verde, the legal regime[5] Insolvency is regulated by the Insolvency and Company Recovery Code. This code establishes procedures for declaring insolvency, liquidating assets and recovering companies in financial difficulty.
The main objective of the insolvency regime is to maximise the value of the insolvent company's assets and distribute the proceeds equitably among creditors. In addition, the code provides for recovery mechanisms that allow companies in difficulty to restructure their debts and operations to avoid bankruptcy. These mechanisms include recovery plans and agreements with creditors, which must be approved by the court[12].
Cape Verde, as an island country with an open economy, attaches great importance to international trade and foreign investment. The country has sought to attract foreign investors through tax incentives and favourable investment legislation. Cape Verdean legislation offers guarantees to investors, such as protection against expropriation without fair compensation and the possibility of repatriating profits.
International trade is regulated by a combination of national laws and international treaties to which Cape Verde is a signatory. These include regional and multilateral trade agreements aimed at facilitating trade and reducing tariff and non-tariff barriers.
Commercial dispute resolution is an essential part of commercial law, as it offers mechanisms for resolving disputes between parties in an efficient and fair manner. In Cape Verde, commercial conflicts can be resolved through the courts or through alternative dispute resolution methods such as arbitration and mediation.
Arbitration is a popular method because of its flexibility and confidentiality. The parties can choose the arbitrators and define the rules of procedure, which can lead to a faster and less costly resolution than traditional court proceedings. Mediation, on the other hand, is a voluntary process in which a mediator helps the parties reach a mutually acceptable agreement.
Commercial law in Cape Verde continues to evolve to adapt to economic and technological changes. The digitalisation of commercial processes and the growing importance of e-commerce are areas that are likely to require updates to legislation. In addition, regional integration and participation in international organisations may influence the development of commercial law in the country.
Cape Verde is committed to creating a legal environment that promotes economic growth and competitiveness, while guaranteeing the protection of the rights of the parties involved in commercial transactions.
The regulation of commercial activities in Cape Verde is an essential component of commercial law, ensuring that transactions take place in an orderly and fair manner. Cape Verdean legislation establishes a set of rules aimed at protecting the interests of consumers and companies, promoting a healthy business environment. The Economic Activities Regulatory Authority (ARAE) plays a crucial role in overseeing compliance with these rules, ensuring that commercial practices are fair and transparent. The ARAE is responsible for monitoring markets, preventing unfair commercial practices and guaranteeing consumer protection. (ARAE)
The commercial licensing system in Cape Verde is a necessary process for legalising business activities. This process is regulated by Law[13] Commercial Licensing, which defines the requirements and procedures for obtaining commercial licences. The aim of this regime is to ensure that companies operate in compliance with safety, health and environmental standards. Licences are issued by different government entities, depending on the nature of the business activity, and can include specific licences for sectors such as tourism, food trade and transport. Simplifying licensing procedures has been a priority for the Cape Verdean government, with the aim of facilitating the business environment and attracting foreign investment. (Government of Cape Verde)
A proteção dos consumidores é uma área fundamental dentro da estrutura legal do comércio em Cabo Verde. A legislação de defesa do consumidor estabelece direitos básicos, como o direito à informação, à segurança e à escolha. A ARAE, juntamente com outras entidades, é responsável por implementar e fiscalizar o cumprimento das normas de proteção ao consumidor. As empresas são obrigadas a fornecer informações claras e precisas sobre os produtos e serviços oferecidos, e práticas enganosas ou fraudulentas são severamente penalizadas. Além disso, existem mecanismos para a resolução de disputas entre consumidores e empresas, que incluem a mediação e a arbitragem, proporcionando uma alternativa aos processos judiciais tradicionais. (ARAE)
Cape Verde has implemented a series of incentives to attract foreign investment, recognising its importance for the country's economic development. Cape Verdean legislation offers tax benefits, such as tax exemptions and tariff reductions, to investors who establish businesses in priority sectors such as tourism, renewable energy and technology. In addition, the government guarantees the protection of investments against expropriation without fair compensation and allows for the repatriation of profits. The Cape Verdean Investment and Export Promotion Agency (CI) is the entity responsible for promoting and facilitating foreign investment, offering support and guidance to investors interested in exploring opportunities in the country. (CI)
E-commerce is gaining prominence in Cape Verde, driven by the increasing digitalisation of commercial processes. Cape Verdean legislation is in the process of being adapted to accommodate the specificities of e-commerce, guaranteeing the security of online transactions and the protection of consumer data. The government has invested in digital infrastructure and promoted digital inclusion as part of its strategy to boost e-commerce. In addition, initiatives to train local companies in the use of digital platforms aim to increase competitiveness and expand the reach of Cape Verdean businesses in the global market. (Government of Cape Verde)
While the existing content covered general aspects of commercial law, such as contracts, companies and insolvency, this report focuses on specific elements of the regulatory and legal framework that have not previously been detailed. For example, the section on the regulation of commercial activities and consumer protection offers a more in-depth look at the role of the ARAE, which has not been discussed in previous reports. Similarly, the trade licensing regime and foreign investment incentives are dealt with more specifically, highlighting the policies and entities involved in these processes. E-commerce, an emerging topic, is addressed here for the first time, reflecting current digitalisation trends in the Cape Verdean context.
The legal infrastructure in Cape Verde faces significant challenges, especially when it comes to modernising and adapting to contemporary business needs. Lack of resources and bureaucracy are obstacles that affect the efficiency of the judicial system and the implementation of legal reforms. However, there are opportunities to improve this infrastructure through investments in technology and professional training. The digitalisation of court proceedings, for example, can speed up the resolution of disputes and increase transparency. In addition, partnerships with international organisations can provide the necessary support for structural reforms. (World Bank)
Cape Verde has the potential to benefit from its strategic geographical position and its participation in regional organisations such as the Economic Community of West African States (ECOWAS). Regional integration offers opportunities to expand trade and economic co-operation. However, harmonising trade laws with regional standards is an ongoing challenge. Participation in regional and multilateral trade agreements can facilitate access to new markets and attract foreign investment, but requires continuous adaptation of national laws to ensure compliance with international standards. (ECOWAS)
The concept of sustainability is becoming increasingly relevant in Cape Verdean commercial law. Companies are encouraged to adopt sustainable practices and integrate corporate social responsibility into their operations. This represents an opportunity for companies to differentiate themselves in the market and meet the expectations of consumers and investors. However, the implementation of sustainable practices faces challenges, such as the lack of tax incentives and the need for clearer regulation. The government can play a crucial role by promoting policies that incentivise sustainability and establishing guidelines for corporate social responsibility. (UN)
Technological innovation is an area of great potential for the development of trade in Cape Verde. The adoption of emerging technologies such as artificial intelligence and blockchain can transform the business environment, increasing the efficiency and security of commercial transactions. However, the implementation of these technologies faces challenges, such as the lack of adequate technological infrastructure and the need for specific regulations to guarantee data protection and cyber security. Government support and collaboration with the private sector are essential to overcome these challenges and take advantage of the opportunities offered by technological innovation. (WEF)
Training qualified professionals is crucial to strengthening commercial law in Cape Verde. Legal education and continuous training are key to ensuring that lawyers and other professionals in the sector are prepared to deal with the complexities of modern commerce. However, the limited supply of training programmes and the lack of resources are significant challenges. Investing in education and professional training can create opportunities to improve the quality of legal services and increase the competitiveness of Cape Verde's business environment. Partnerships with educational institutions and international organisations can help overcome these challenges. (UNESCO)
This report highlights the challenges and opportunities in Cape Verdean commercial law, emphasising the need to modernise and adapt to global trends. Through strategic investments and partnerships, Cape Verde can strengthen its legal and economic environment, promoting sustainable development and competitiveness in international trade.
Commercial law in Cape Verde plays a crucial role in regulating business activities and fostering the country's economic development. The legal structure is based on the Commercial Code, which, although inspired by the Portuguese model, has been adapted to meet local specificities. This code covers essential aspects such as commercial contracts, companies, credit securities, insolvency and company recovery. Efficient regulation of these areas is vital to guarantee legal certainty and confidence in commercial transactions, promoting a healthy and attractive business environment for domestic and foreign investors.
Among the most significant findings is the importance of the Economic Activities Regulatory Authority (ARAE) in supervising commercial practices and protecting consumers, ensuring that transactions take place in a fair and transparent manner. In addition, the commercial licensing regime and incentives for foreign investment are key elements in attracting foreign capital, which is essential for Cape Verde's economic growth. Growing digitalisation and e-commerce represent new frontiers that require legislative updates to guarantee the security and protection of consumer data.
The implications of these findings suggest that Cape Verde must continue to invest in the modernisation of its legal infrastructure and professional training in order to face contemporary challenges. Regional integration and participation in multilateral trade agreements offer opportunities to expand trade and attract investment, but require continued harmonisation of national laws with international standards. Promoting sustainable practices and incorporating technological innovations can set the country apart on the global stage, but requires government support and collaboration with the private sector. For more information on the ARAE and its functions, visit ARAE.
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