IFLR is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Cape Verde Corporate makeover

Sponsored by

Mindelo, Cape Verde, cityscape

Nelson Raposo Bernardo, Joana Andrade Correia and Júlio Martins Júnior of Raposo Bernardo review Cape Verde’s recently revamped and modernised corporate finance framework, which provides a swathe of new financial supports and aims to supercharge MSMEs.

Cape Verde's government has recently put in place important institutional, legal and contractual instruments and mechanisms for investors with the aim of helping to promote and encourage the corporate finance sector.

At the institutional level, the government has created Pró Empresa (Decree Law No. 22/2017 of May 17), a public institution that aims to promote, facilitate and monitor investments into micro, small and medium-sized enterprises (MSME) across the country.

Pró Empresa's remit is to sponsor research into the private investment conditions that affect MSMEs and use the research in consultation with competent entities to propose beneficial measures for the sector. Its goal is to publicise and promote the opportunities and advantages private investment can bring to the production of goods and services and to facilitate, guide and support MSME investors by providing them with all the information they need relating to private investment in Cape Verde. The authority offers a one-stop-shop for client services and serves, more broadly, to coordinate client services by working in close cooperation with venture capital entities and credit guarantee institutions. Its overarching goal is to support and promote investment programmes for MSMEs.

In addition to Pró Empresa, companies can benefit from the Pró Capital mechanism (Decree Law No. 28/2017 of June 30), which facilitates investments into the share capital of any public and viable company which is in a difficult financial situation. The mechanism's goal is to promote the recovery of such companies as well as facilitate participation in the share capital of start-ups. Participation in the share capital of companies under this mechanism is capped at 10 years.

At the institutional level, the government has created the Sociedade de Garantia Parcial de Crédito (Pró Garante) (Decree Law No. 32/2018 of June 15). Pró Garante is a public financial institution subject to the supervision of the Central Bank of Cabo Verde whose goal is to facilitate access to financing for MSMEs by offering credit guarantees, which will promote growth in each business sector and boost the sustainable development of the national economy.

Pró Garante has a range of tools at its disposal. It can grant guarantees to eligible credit institutions, regulated and supervised by Central Bank of Cabo Verde, to facilitate credit lines to companies. It can offer portfolio guarantees of special credit lines to ensure compliance with the obligations assumed by companies with entities that provide the special credit lines. Pró Garante can also offer counter-guarantees to the operations of other eligible financial institutions that are dedicated to providing credit guarantees to companies, as well as administer, on behalf of third parties, guaranteed funding aimed at improving access to corporate finance. A final key tool is that it can support the expansion and dissemination of other financial instruments that can further improve access to finance for companies.

These institutions and mechanisms have been created recently to promote business, facilitate risk capital and guarantee financing operations with credit institutions.

Another important legislative novelty introduced in Cape Verde that may have a strong impact on corporate finance developments is the new legal regime that governs crowdfunding or collaborative financing (Law No. 34/IX/2018 of 6 July). This is a very recent corporate finance alternative in Cape Verde and has already attracted investors' attention.

The framework provides a versatile corporate finance mechanism, which consists of:

  • collaborative financing through a donation, whereby the financed entity receives a donation with or without the delivery of a non-pecuniary counterpart;

  • collaborative financing with reward, whereby the financed entity is obliged to provide the financed product or service, against to the financing obtained

  • collaborative capital financing, whereby the financed entity remunerates the obtained financing through participation in the respective share capital, distribution of dividends or profit-sharing; and

  • collaborative finance, whereby the financed entity pays the financing obtained through the payment of interest fixed at the time of the fund raising.

Crowdfunding has proven to be especially useful in the financing of start-ups and SMEs, specifically those that are developing activities and projects in innovative areas. It is an instrument that also presents advantages that are not strictly financial, for instance it has a strong marketing effect by promoting businesses on its platform and by interacting on social networks.

Looking ahead

The implementation of these regulatory frameworks is expected to boost corporate finance activity over the short to medium term, especially in the period where markets begin to emerge from Covid-19. It should be noted that the Government of Cape Verde has also implemented other kinds of measures to inject more liquidity into the Cape Verdean economy (Decree Law No. 38/2020 of 31 March). These measures include the creation of credit lines to support corporate treasury, a bank financing moratorium, tax reductions and exemptions and a tax moratorium. Most companies have resorted to the bank financing moratorium. During the moratorium period, beneficiary entities may request to have capital repayments wholly or partially suspended.

If a company requests a moratorium this request cannot be treated, in any way, as a breach of any of the contractual obligations agreed with the banks, nor can it activate early maturity clauses or the suspension of interest due during the moratorium period – which will be capitalised in the loan amount with reference to the time when they are due at the current contract interest rate – or terminate any guarantees.

To inject liquidity into the economy, the government also opened up the possibility for companies to obtain bank financing with partial guarantee from the Cape Verdean state.

These sets of instruments will certainly provide companies with interesting investment opportunities and with the advantage that there are no restrictions in terms of the sector of activity, so they are available to companies operating in tourism, industry, services, agribusiness, energy, and every other sector. As a result of these developments, companies operating in Cape Verde have at their disposal important modern corporate finance instruments, namely venture capital, partial guarantee from the state or state-owned companies and crowdfunding in its most diverse modalities.

Traditional sources of corporate finance, including equity capital raising techniques, are provided for in the Cape Verde Companies Code, in addition to the financing possibilities mentioned above. In the first step of an equity financing, the partners of a company can subscribe to additional share capital in the primary market. In this instance, the shareholders will benefit from the distribution of dividends and the balance settlement. The shareholders can then also be called on to finance the company through a hybrid model, specifically by means ancillary payments and supplementary payments, which constitute financing through debt instruments.

To that extent, we conclude that Cape Verde has made available a wide range of corporate finance instruments to companies, which can be complementary and represent an important stimulus to entrepreneurship, innovation, and research and business development.

Companies have been attentive to these opportunities and the legal framework recently introduced in the area of corporate finance has contributed not only to a change mentalities, but modernised business practices, allowing Cape Verdean companies to have access for the first time to financial resources that have not previously been available.

Nelson Raposo Bernardo

Managing partner

Raposo Bernardo

Lisbon, Portugal

Tel: + 351 21 3121330



Nelson Raposo Bernardo is the managing partner and head of the banking and projects practices. Nelson has more than 25 years of international experience in high-profile and complex operations and has been involved in multiple transactions in Portugal and abroad. He focuses on M&A, banking and finance, capital markets, project finance and private equity, as well corporate restructuring and corporate finance.

Some of his recent transactions include advising BNP Paribas on an aircraft portfolio financing; Helios Investment Partners in the acquisition of Fertilizers and Inputs Holding, held by Louis Dreyfus; Mitsubishi Corporation Bank on international credit operations; Japan Bank for International Cooperation in operations regarding export loan agreements; Rabobank for financing operations of Ferry Boats; General Electric for a power wind farm project; and Barclays Bank and Caixa Bank in a banking syndicate with another 15 banks for the refinancing of an international construction group.

Joana Andrade Correia


Raposo Bernardo

Lisbon, Portugal

Tel: +351 21 3121330



Joana Andrade Correia has co-headed Raposo Bernardo's corporate and M&A department for 18 years. She has led multiple domestic and international operations, including corporate restructurings and M&A transactions for key players in different sectors such as banking and finance, aviation, tourism and energy, among others.

Recent work includes advising Iceland air Airlines on the privatisation of the National Airline of Cape Verde; Iberostar Hotels and Resorts Group in its business incorporation in Portugal and opening of two hotels; Deutsche Bank in the negotiation and preparation of a bank financing agreement relating to the acquisition of commercial aircrafts; China Africa Development Bank on financing of investments in infrastructure and construction projects; Afreximbank on the financing of the construction of a Hilton hotel; and Elix Capital on transactions involving airlines and aircraft leasing companies, acquisitions and leveraged financings.

Júlio Martins Júnior

Managing associate

Raposo Bernardo

Lisbon, Portugal

Tel: + 351 21 3121330



Júlio Martins Júnior is member of both the Cape Verdean and the Portuguese bar associations.

Júlio has 15 years of experience in corporate law and finance related operations, namely in relation to sales and acquisitions of shares and assets, financing operations, licensing and regulation and M&A.

Júlio has led and been involved in major international investment projects. His recent transactions include advising over 30 banks operating in the country on financing contracts for large infrastructure and equipment; acting as counsel to the largest private bank in Cape Verde; advising Iceland Air Group on the privatization of the national aviation company TACV, still the largest privatisation in the country;assisting on the financing process of the project to construct the second submarine cable connecting South Africa, Cape Verde and Portugal operated by CV Telecom; and advising China Construction Bank on a loan agreement for an international credit transaction.

He has been part of the teams drafting some of the most recent legislation packages for Cape Verde.