Cuba

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DOING BUSINESS

 


Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Industrial free trade zones have been created in order to attract foreign investors, given that the geographical position of the island is a real asset.
These free trade zones involve tax exemption on profits and workforce taxes, exemption of customs duties and additional duties for goods coming into the free trade zone and the possibility of setting up banking and financial services.
There are 4 free trade zones within the island: Havana in Bond (East Havana), Ciudad Habana (not far from the Havana port), Wajay's zone (near the airport) and Mariel's harbour zone.
A company set up in a zone benefits from tax exemptions for 12 years and is then taxed on a 50 % basis over the next 5 years. For commercial and services activities, the exemption tax lasts 5 years and is then on a 50% basis over the next three years.
Attention is drawn to the fact that the setting up in a free trade zone requires an authorization from The National Office of Free Trade Zones.

 

Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Public Limited Company 2 minimum No minimum amount Liability is limited to the amount contributed. N/A.

Registration and licensing procedures
Articles of incorporation must be authenticated by a notary and consist of the economic association contract, status and investment authorization.
Sending in of status and registration must be made with the Trade Register. Mixed economy companies as well as foreign capital companies must be registered with the Register of Companies of the Chamber of Commerce of the Republic of Cuba, within 30 days as from the delivery of the license. The international economic association contract (joint-venture) must be registered with the Register of the appropriate Chamber of Commerce, within 30 days too.

Foreign exchange control
According to the current regulation on exchanges in Cuba, two currencies co-exist in the country: the peso is the national currency and is not convertible; and the currency which can be converted into dollars, free conversion is carried out and this market is open to foreigners living in Cuba. Exceptionally and on decision of the Executive committee, foreign investors can make collections and payments in national currency.
As for the right to transfer profits and capital, it can be made in freely convertible currency.
The currency exchange rate is the ruling rate of the transfer.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal in Cuba.  


Foreign Direct Investment inflows in Cuba

FDI inflows 2003 2004 2005 World rank (*)
2005
FDI inflows (USD million) 9 4 1 ..
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

 

Last modified in 2006 - ongoing update
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