How to Register a Business in the US from Cabo Verde

Step 1: Benefits of starting your US business from Cabo Verde

Starting a US business from Cabo Verde offers a unique combination of strategic advantages and opportunities. Firstly, Cabo Verde's geographic location in the central Atlantic Ocean bridges the African, American, and European markets, providing entrepreneurs with a strategic point for international trade and business expansion. The time zone alignment also facilitates communication with both European and American partners, which is critical for maintaining efficient business operations and collaborations.

Moreover, Cabo Verde benefits from a stable political environment and a progressive economic framework that supports entrepreneurship and foreign investment. The government has implemented various incentive programs and policies to attract international businesses, including tax benefits and simplified administrative procedures. Additionally, the availability of a skilled and multilingual workforce in Cabo Verde enhances the potential for providing high-quality services and products to the US market. This favorable business climate, combined with the ability to leverage local resources and expertise, makes Cabo Verde an ideal location for launching and growing a US business.

Step 2: How to start your US business from Cabo Verde

Starting a US business from Cabo Verde involves several steps that require careful planning and attention to both countries' legal frameworks. First, it is essential to have a well-defined business plan that outlines your business goals, target market, financial projections, and operational strategies. This plan will not only guide your business activities but is also crucial when approaching financial institutions or investors.

Next, you need to choose the appropriate business structure (such as an LLC, corporation, or partnership) and register with the relevant US state authorities. This can usually be done online through the state's website. Additionally, you will need to apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is essential for tax purposes and is required to open a US business bank account. It's advisable to consult with a legal expert or business consultant who is familiar with both US and Cabo Verdean regulations to ensure compliance and to streamline the process.

Furthermore, you may need to address issues related to visas and work permits if your business activities require you to spend time in the US. Engaging with a US-based legal advisor who specializes in immigration can facilitate this process. Finally, it is crucial to set up a reliable communication and financial transaction system between Cabo Verde and the US to manage your business operations efficiently.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Cabo Verde

Understanding Compliance Requirements for Running a US Business in Cabo Verde

Operating a US business in Cabo Verde necessitates a thorough understanding of both local and international compliance requirements. These compliance aspects ensure your business adheres to legal, ethical, and operational standards. Below, we highlight key considerations to help you navigate the compliance landscape.

1. Legal Structure and Registration

Choosing the appropriate legal structure for your business is a critical first step. The most common structures for foreign businesses in Cabo Verde are:

• Branch Office: A direct extension of the US company, subject to both US and Cabo Verde laws.
• Subsidiary: A legally independent entity in Cabo Verde, providing greater flexibility and local compliance.

You must register your business with the Cabo Verde Commercial Registry and obtain a Tax Identification Number (TIN).

2. Taxation

Understanding local tax obligations is essential for compliance. Key considerations include:

• Corporate Income Tax: Generally levied on the global income of Cabo Verdean entities and permanent establishments of foreign companies.
• Value-Added Tax (VAT): Applied on goods and services sold within Cabo Verde, with specific rates for different sectors.
• Withholding Tax: Applied to payments made to foreign entities, including dividends, interest, and royalties.
• Tax Treaties: Check if a Double Taxation Agreement exists between the US and Cabo Verde to avoid double taxation.

3. Employment Regulations

Complying with local labor laws is crucial when hiring in Cabo Verde. Key considerations include:

• Work Permits and Visas: Required for foreign employees.
• Wage and Hour Laws: Adhere to minimum wage standards and working hour regulations.
• Social Security Contributions: Mandatory for both employers and employees.
• Employment Contracts: Must be compliant with local labor laws and clearly define terms of employment.

4. Data Protection and Privacy

Cabo Verde has regulations governing data protection and privacy that businesses must adhere to:

• Data Handling Legislation: Ensures the protection and privacy of personal data.
• Compliance with GDPR: Particularly relevant if your business deals with customers in the European Union.

5. Environmental Regulations

Your business may need to comply with environmental laws depending on its sector:

• Waste Management: Regulations for proper disposal and management of waste.
• Environmental Impact Assessments (EIA): Required for certain projects to evaluate potential environmental impacts.

6. Local Business Practices and Culture

Understanding local business culture and practices can facilitate smoother operations:

• Business Etiquette: Familiarize yourself with local customs and business etiquette.
• Language: Portuguese is the official language, so consider language training for effective communication.

Successfully navigating the compliance landscape in Cabo Verde involves understanding and adhering to local regulations while ensuring your US business aligns with international standards. Proper due diligence and ongoing compliance monitoring are vital to maintain legal and operational integrity.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Cabo Verde

Understanding Tax Obligations for Running a US Business in Cabo Verde

Starting a business in Cabo Verde as a US entrepreneur can be both exciting and challenging. One of the key aspects to consider is understanding the tax obligations. This article outlines important considerations to keep in mind.

1. Business Structure

The tax obligations you face can vary depending on the type of business you establish in Cabo Verde. Common business structures include:

• Sole Proprietorship
• Partnership
• Corporation
• Branch Office

Each structure has its own set of tax requirements and implications.

2. Corporate Taxation

Businesses operating in Cabo Verde are subject to corporate income tax. Key points to consider are:

• The standard corporate tax rate in Cabo Verde is generally around 25%
• The tax year typically runs from January 1 to December 31
• Tax returns must be filed annually

3. Value Added Tax (VAT)

Cabo Verde imposes a Value Added Tax (VAT) on the sale of goods and services. Important details include:

• The standard VAT rate is currently 15%
• Some goods and services are exempt or zero-rated
• VAT returns are usually filed quarterly or monthly

4. Withholding Taxes

When making certain payments, you may need to withhold taxes. Consider the following:

• Dividends, interest, and royalties paid to non-residents may be subject to withholding tax
• Rates can vary based on double tax treaties between Cabo Verde and other countries

5. Double Taxation Treaty

To avoid being taxed both in the US and Cabo Verde, it is essential to understand any applicable double taxation agreements. These treaties can help reduce the tax burden by:

• Providing tax relief on certain types of income
• Allowing credits or exemptions for taxes paid in one country

6. Employment Taxes

If you hire employees in Cabo Verde, be aware of the associated tax obligations. Key points include:

• Payroll taxes such as Social Security and income tax withholding
• Compliance with local labor laws and regulations

Understanding these tax considerations will help you manage your business effectively in Cabo Verde. Always consult with a local tax advisor to ensure compliance and optimize your tax strategy.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country