Cuba Approves New Foreign Investment Law, Aims To Bring In $2 Billion A Year

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The Cuban parliament on Saturday unanimously passed a new law to open up the country to more foreign investments, promising less government control and greater flexibility for overseas investors.

According to Reuters, the new law, which will take effect within 90 days, will cut taxes on profits by half to about 15 percent, as well as eliminating a labour tax and granting new investors an 8-year exemption on the profits tax.


The Cuban parliament on Saturday unanimously passed a new law to open up the country to more foreign investments, promising less government control and greater flexibility for overseas investors.

According to Reuters, the new law, which will take effect within 90 days, will cut taxes on profits by half to about 15 percent, as well as eliminating a labour tax and granting new investors an 8-year exemption on the profits tax.

Additionally for the first time, foreign investors will now be permitted to own 100 percent of a business, although there will still be major financial incentives for foreign businesses to enter into joint ventures with Cuban companies.

Foreign investment will reportedly be allowed in all sectors, except health care and education.

The Cuban economy needs more than $2 billion in foreign investment every year in order to achieve a necessary 7 percent growth rate, Marino Murillo, chief coordinator of reforms, told the National Assembly in its extraordinary session at the Palacio de Convenciones in Havana on Sunday, as cited by the Cuba Standard.

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Foreign investment is not only “the most expeditious option” but also “the last opportunity of the reform to move growth closer to the goal” for the five-year period that ends in 2016, added former Central Bank economist Pavel Vidal in a recent Cuba Standard Economic Report.

The investment law is a fundamental part of President Raul Castro’s package of reforms, begun in 2008 with the stated goal of “updating” Cuba’s economic model. Cuba’s economy expanded by just 2.7 percent last year, significantly below targets.

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