Cuba details business reforms opening private firms to foreign investment

The Cuban government on Wednesday set out the scope of measures on the management model for its state and private economic actors, part of a package of 176 reforms approved in June by the National Assembly with the stated aim of liberalizing and decentralizing the island's economy. Officials from the Ministry of Economy and Planning (MEP) and from two newly created institutes — one for state business assets and another for non-state actors — presented the changes as a way to diversify the business landscape and boost output. The head of the MEP's business system, Yovana Vega, said the provisions seek to have state and private actors “operate under similar conditions in the economy.” According to official figures, the island has 23,172 business entities, broken down as follows: | Type of entity | Number | |---|---| | Private MSMEs | 15,200 | | Cooperatives | 4,966 | | State enterprises | 2,803 | | Joint ventures | 131 | | Foreign-capital firms | 72 | Among the changes, authorities will allow the creation of larger private firms, with no size limit, and let a single person own more than one company. The cap of one hundred employees for private entities is being removed, procedures to open a business are being simplified — no longer requiring prior MEP authorization — and the way is being opened for foreign investors to take part directly in private businesses, without the obligation to partner solely with the state. The head of the non-state actors institute, Mercedes López, said that in the coming days the government will announce that more than 62% of activities previously barred to the private sector will be freed up or eased. State enterprises, for their part, will gain autonomy to create subsidiaries, define their corporate purpose and set prices and wages, and will be able to hold their own foreign currency, on terms comparable to the private sector, according to the head of the state assets institute, Roberto Ricardo Marrero. The government itself acknowledges that implementation will be gradual: many measures require additional regulations, and the most far-reaching ones, such as private banking, will take longer. The reforms come amid a prolonged crisis. Cuba's economy contracted by about 15% between 2020 and 2025, a decline authorities attribute to the pandemic, the tightening of US sanctions and failed domestic measures. Since January, they add, Washington has applied a maximum-pressure policy that includes restrictions on oil supply and secondary sanctions on foreign entities. Top Comments Disclaimer & comment rulesNo comments for this story Please log in or register (it’s free!) to comment. Login with Facebook