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Foreign investment in Cuba came to an end in 1959, when the revolutionary forces led by Fidel Castro took power from Batista. Before that, main productions and basic services had been provided by foreign companies, most of them from the US.
In 1988 a new stage opened when the first joint venture was created between a Cuban enterprise and a Spanish company with the purpose of building a hotel in the tourist resort of Varadero on the basis of Decree-Law No. 50 of 1982. |
Sol Palmeras Hotel in Varadero, the first joint venture after Cuba´s Revolution |
In 1992, the National Assembly of the People's Power (Cuba's Parliament) approved a number of amendments to the Constitution of the Republic with a view to recognizing forms of ownership other than the State´s. Foreign investment was accelerated as one of the important steps taken by the Cuban authorities to recover from the serious impact to the Cuban economy caused by the fall of Socialism. Joint ventures were legalized and FDI-associated aspects defined.
A new Foreign Investment Legislation (Law No.77) was passed in 1995. This legislation is in line with international practice. According to that law, foreign investment in Cuba may adopt the form of a Joint Company, an Economic Association Contract or a Wholly-owned Foreign Company. Besides, the authorization of investments in Cuba is a faculty of the State.
The procedure to obtain the authorization results from a previous negotiation between the national investor and the foreign investor, in the case of a joint venture of a contract of international economic association, or between the foreign investor and the ministry in charge of the corresponding branch, sub-branch or economic activity in which the investment is to be carried out, which is the case of a company totally of foreign capital. Both parties, the national and the foreign investor, will submit the corresponding application to the Ministry for Foreign Investment and Economic Cooperation (MINVEC) to examine and channel the proposal for final approval.
Once the required economic and legal documentation on the proposed business has been prepared and submitted to MINVEC, the decision denying or approving such foreign investment is handed down within a period of 90 calendar days.
Foreign investment in Cuba has increased. Today almost 400 joint ventures are operating in the country, with a strong presence in sectors such as mining, oil prospecting and extraction, tourism, industries and telecommunication. Lately other ventures and negotiations have expanded in new sectors, such as power generation by natural gas, expansion of the cities domestic gas supplies, etc.
Investors from more than 40 countries have placed their capital in Cuba.
From 1997 on, foreign investment further expanded and more complex deals were agreed with important partners in newly opened sectors.
Nowadays, investors from 46 countries operate in almost 400 ventures in 32 sectors of the Cuban economy. Tourism, Oil and Gas, Mining, Energy and Telecoms are the main sectors of investment. Thus, foreign direct investment, focused on the search for new external markets, competitive technologies and financing (mainly long term) has played an important role in Cuba's economic recovery.
MINVEC
The Ministry for Foreign Investment and Economic Cooperation (MINVEC) is the responsible for governing and controlling the foreign investment process and the development of Free Zones and Industrial Parks. It is also in charge of preparing the relevant legislation in this field.
Its main functions include:
- Promotion of inward and outward foreign investment;
- Guiding the negotiation process for the establishment of economic associations or any other forms of foreign investment;
- Assessment of compliance with the bases and principles set forth for economic associations between Cuban and foreign entities;
- Implementation of the economic cooperation policy; governing and controlling the development of the technical assistance provided to and by the country;
- Preparation, negotiation and signing of agreements with official foreign institutions.
CPI
The Ministry for Foreign Investment has, since 1994, its own Investment Promotion Centre (CPI) which is responsible for promoting the existing business opportunities for foreign capital involvement in Cuba, as well as overseas investment by Cuban companies. The Center provides up-to-date information on the country, foreign investment regulations, and opportunities for foreign investment involvement in the domestic economy; arranges meetings with potential Cuban partners for foreign investors interested in investing in Cuba; organizes investment seminars, lectures, meetings, events and fora, both in Cuba and abroad among other functions.
CPI is a member of the Geneva-based World Association of Investment Promotion Agencies (WAIPA), under the auspice of United Nations. |
