Investors Guide to Cape Verde

Independent since 1975, the Cape Verde islands were previously a Portuguese colony. To be found in the North Atlantic, 450 miles off the Senegal coast, they are Africa's most westerly point.

Cape Verde comprises 10 principal volcanic islands and five smaller, largely uninhabited, islands, the whole divided in two groups - the Ilhas do Balavento is the windward group, and the Ilhas do Sotavento the leeward group.

Once a staging post and source of salt for sailing ships, the islands now rely for their living on agriculture, shipping and other services, and more and more on attracting visitors. Most food has to be imported and there are annual budget deficits.

Recent economic reforms are designed to develop the private sector and attract foreign investment, although the islands are expected to remain dependent upon aid. Cape Verde has been exploring the possibility of European Union membership, and its currency, the Cape Verdean Escudo, is tied to the euro.

The islands have warm, dry summers and are prone to drought and seasonal winds which can bring dust storms. Seas around the islands can be 'treacherous'.

Each island has its own characteristic although the landscape is predominantly rugged and mountainous with numerous beaches.

The capital is Praia, situated on the largest island, Santiago. Cape Verde has international airports on the islands of Sal, the main tourist destination to the north east of the group of islands, and Santiago in the south. There are also smaller airports on several other islands. Many international flights from Europe are via Lisbon.

Cape Verde's major shipping port is Mindelo on the island of Sao Vicente.

The population is just 424,000. The official language is Portuguese, while laws, architecture and customs also reflect the islands' Portuguese heritage. There are also strong African lifestyle influences.

Foreign nationals require visas to enter the islands. Those buying property will require a habitation permit.

The British Embassy in Dakar, Senegal is responsible for the UK's relations with Cape Verde.

There is no Cape Verdean Embassy in London - the Cape Verdean Ambassador to the UK is resident in Brussels.

The Foreign Office judges the threat from terrorism in the island to be 'low'. Crime rates are also low although petty theft is common and 'there have been incidents of muggings involving British nationals'. The political situation is 'stable'.

Recent property development has created investment interest in this emerging market - although with a weak but improving domestic economy and more Cape Verdean's living outside the islands than living on them, its development will be largely reliant on overseas investors.

Property ownership is subject to land registration. Transfer begins with a legally binding promissory contract signed in front of a notary public. At this point a deposit of between 10 per cent and 30 per cent is expected to be paid by the purchaser. Ownership is transferred when a final deed of transfer is signed, again in front of a notary, and payment made of the outstanding balance. The purchase will then be registered at the local land registry and with the local authority on receipt of a report from the notary.

Notary, registration fees and stamp duty are around 2.5 per cent of the property's price. There is also a transfer tax of 3 per cent and an annual property tax equivalent to 0.75 per cent of value.