@NovskiMorning Sir, with regard to Cuba and more specifically...

@Novski

Morning Sir, with regard to Cuba and more specifically foreign investment things are changing and have been changing or evolving since 2015.. Although President Trump did wind back some of the Obama initiatives, President Biden is beginning to ease some of those restrictions.

Whilst the Cuban gov have themselves opened up new trade policies under the foreign investment act only recently (Aug 22) and I encourage any who have doubts to have a browse.. You may be surprised to see the Gov is pro investment on a quid pro quo basis in order to benefit Cuba and the Cuban people..

First move r advantage in this instance (As has been shown with Melbana) is a good thing and largely incentivized by a National partner willing to work with companies for the benefit of all. H8tey



Cuba - Foreign Investment Act | Investment Laws Navigator | UNCTAD Investment Policy Hub

WHAT TO CONSIDER IF YOU INVEST IN CUBA

Strong Points

Cuba strong points in terms of attracting FDI are :

- High potential in tourism and mining sectors (nickel, cobalt) and in agriculture (sugar, tobacco);
- Opening to the private and cooperative private sector of agriculture, commerce, catering and construction (more than 200 trades);
- Qualified and inexpensive labor;
- Quality medical and educational sectors;
- Relatively good social indicators;
- Low crime and active fight against corruption.

Weak Points

The Cuban economy's weak points in terms of attracting FDI are:

- External vulnerabilities (climate, commodity prices, Venezuelan aid);
- Low productivity of the public sector and agriculture;
- Low investment and poor infrastructure;
- Very heavy administrative procedures and very recent commercial regulations;
- State's control over wholesale trade, credit, foreign trade and foreign investment;
- Reduced access to external funding;
- Distance between the conversion rate and the economic reality, which maintains the dualism of the economy, the black market, the economy of rationing and the informal sector;
- Lack of statistical transparency.

Government Measures to Motivate or Restrict FDI

The thaw in diplomatic relations between the U.S. and Cuba was expected to favour a more liberal economy on the communist island, but President Trump reversed the step forward made by Obama, leaving Cuba in a an unsafe economic position, since it cannot rely on the help of the struggling Venezuela anymore.

Therefore, Cuba is trying hard to attract foreign investment and has put in place since 2011 an ambitious reform programme. Free industrial trade zones have been established in order to attract foreign investors (for example: Havana in Bond, the Wajav zone and the port zone of Mariel). They are exempt of income tax on profits, labour tax, customs duties and any additional duties on merchandise introduced in the free zone. The tax exemption is valid for 12 years. The following five years, the company is taxed only at 50% of the regular rate. For commercial activities and services, the exemption period is extended to five years. The Mariel port area also offers a special salary scheme.

Cuba's Ministry of Foreign Trade and Investment released in 2018 its newly expanded annual FDI opportunities portfolio which details 456 economic development projects worth over $9.5 billion open to foreign investment.

Nevertheless, Cuba has a centralised communist economy, which obliges each company willing to do business on its territory to consider the State as a necessary business partner. Also, Cuba runs a complex currency and domestic exchange rate regime.There are currently two currencies in use: The Cuban Peso (peso cubano or moneda nacional, CUP) used for a majority of domestic transactions and the Cuban Convertible Peso (peso convertible, CUC). The latter (CUC) is pegged to the US dollar and used by tourists and for domestic transactions. For the domestic consumer market, the exchange rate between both currencies is of 1 CUC for 24 CUP. However, several parallel exchange rates coexist for other segments of the economy. The exchange rates differ, most industries having a different rate. For example, Cuban state-owned firms use 1:1 exchange rate for their bookkeeping and the remuneration of Cuban employees by foreign firms in Mariel is calculated in the basis of a 1:10 exchange rate.

Bilateral investment conventions signed by Cuba

The list of countries with whom Cuba has signed a bilateral convention regarding FDI can be found here.