With the recent boom in relations between US and Cuban governments, along with the official opening of embassies in both countries, there has been an unprecedented interest to invest in Cuba. The removal of the island from the list of states sponsoring terrorism has also represented a significant boost to potential investors.
On April 16, 2014 was published Law 118, “Foreign Investment Law”, in the Official Gazette, establishing the legal framework to formalize a project for foreign investment in Cuba as well as all the details associated with it. Chapter VI of the law states that a foreigner can invest in real estate in Cuba to obtain ownership as well as other rights whenever these properties are intended for housing, buildings for tourist purposes, homes or offices of foreign legal entities or to establish real estate development to use in tourism.
Many businessmen see advantages in investing in Cuba because of its geographical location, availability and education of qualified human resources, its important natural resources and significant bilateral cooperation agreements with several countries. There are many opportunities in Cuba at this moment.
As part of this law a foreign investor who wants to do business with Cuba has the guaranty to sell or transfer his company, or his share, to the state or a third party if he wishes to. It also allows investors to open accounts in any bank in the National Banking System for collection and payment as needed. Investors can also open foreign currency accounts in other countries´ banks whenever they have authorization from the Central Bank of Cuba. Moreover, law allows importing goods which are necessary for the investment.
Those interested in opening a business in Cuba as foreign investment should be aware that requests can be made in every sector of society with the exception of health, education and armed forces, not including their enterprise systems, which refers to companies that provide maintenance and assurance to these sectors. Such requests must be approved by the Council of State, the Council of Ministers and the specific ministry depending on the sector, type and the characteristics of the investment application.
For investments in Mariel´s Special Zone of Development, the Cuban government establishes a special tax regime providing several benefits to foreign investors.
It is important to clarify there are two currencies circulating in Cuba, CUC, which is a freely convertible currency into other foreign currencies with an exchange rate of 1 CUC equals 0.87 USD and the other circulating currency is CUP, commonly known as “Cuban peso” or “national currency” which is not convertible into other foreign currencies, but can be changed into CUC at 1 CUC equals 24 CUP rate. Monetary unification to eliminate dual currencies is a priority for the government, CUP will be the currency used after the so-called “zero-day”, time from which the CUC won´t be in use anymore. Undoubtedly this is one of the issues to be solved for providing greater benefits to foreign investors.