Cuba overview

General data

Official name: Republic of Cuba

Area: 109 884,01 km

Capital: Havana

Official Language: Spanish

Time zone: GMT -5

Main  cities Havana,  Santiago  de  Cuba,  Holguin,  Camagüey,  Cienfuegos,  Matanzas,  Pinar  del Río and Ciego de Ávila.

Geographic location: Cuba is an archipelago comprising  the  island  of  Cuba  with  an  area  of  107 464,74 km2, the Isle of Youth with 2 419,27 km2 and about 4 200 adjacent cays and islets.

It is the biggest  Caribbean island and has a strategic position at the entrance of the Gulf of Mexico in the  Caribbean Sea. It is bounded to the north by the United States of America (Key West)  and  the Commonwealth of Bahamas, which are respectively located 150 km, and 21 km away;  Jamaica  is  140  km  to the south, the Republic of Haiti lies 77 km to the east, and the United Mexican States are 210 km to the west.

Climate: Generally speaking, it is quite acceptable to say that Cuban climate is tropical, seasonally humid, with maritime influence and semi-continentally features. There are also reports of the existence of another type of climate in the highest areas of the main mountain ranges of the country, which is classified as relatively dry and tropical with very little rain. Temperatures are generally high. Average annual temperatures range from 22ºC to 28ºC and may be higher in the eastern coast; values lower than  20ºC  are  reported in the highest areas of mountain ranges. The maximum average temperature registered ranges  from 27ºC to 32ºC and the minimum average temperature, from 17ºC to 23ºC.

Political and administrative division: Cuba is divided into 15 provinces and 168 municipalities, including  the special municipality of the Isle of Youth.

Population: 11 239,004 inhabitants (2015).

Population  density: 102,3  inhabitants/km2 (2015).

Population  growth  rate: 0,1  per  1  000  in-habitants (2015).

Official currency: The official currency is the Cuban peso (CUP), which circulates in bills to the value of 1, 3, 5, 10, 20, 50, 100, 200, 500 and 1,000 pesos and coins to the value of 1 and 3 pesos. The convertible peso (CUC) is also used to pay for products and services offered in that currency within the national territory.

Exchange rate determination: The CUP is worth the same  as  the  American  dollar  (USD), that is to say, 1 CUP is equal to 1 USD according to the official exchange rate (which applies to all banking and  commercial operations). In the case of buying and selling operations executed by the population, 25 CUPs are equal to

1 CUCs whereas 1 CUC is equal to 24 CUPs. Exchange services are provided by banks, airports, hotels and exchange houses (CADECAS). The country is currently working on the exchange and  monetary  unification.  Such unification will be gradual and will comprise several stages which will involve legal entities and nationals.

Political and governmental system: In the Republic of Cuba, sovereignty is vested in the people, from  whom arises the power of the State. This power is exercised either directly or by means of the National  People’s Power Assembly which is the supreme body of the power of the State, represents and expresses  the sovereign will of the whole population, and constitutes the only instrument invested with constituent and legislative authority in the country-together with other bodies of the State derived from the Assembly, in the manner and under the regulations established by the Constitution and other laws.

Cuban economy is governed by a centrally planned system, based on the socialist ownership of the basic means of production.

Telecommunications: The Empresa de Telecomunicaciones de Cuba, S.A. (ETECSA), has a network of  Internet and telephone services which guarantees direct communication within the national territory and with any corner of the world ( This  telephone  services  network  has  developed   gradually. Currently, according to the official figures, there are 4 643 789 telephone lines in use in the country. In addition, by means of Cubacel services, ETECSA  commercializes  mobile  telephony,  operating   under the GSM (900 MHz) and 3G around all the national territory.

Transportation system: There is a seaport, road and air infrastructure that allows the connectivity of  socioeconomic objectives both in and out of the country. The most important connecting roads throughout  the  Island  are  the  Carretera  Central  (Central Highway), the Autopista Nacional (National  Freeway)  and  the  (Línea  Central)  Central  Railway; the latter has a long railroad network with 8 367 km of tracks..

Air Transportation: The country has a solid airport infrastructure whose expansion has been planned for  the main tourist areas, in view of the expectations concerning tourism growth in the Island. In Cuba at  present, there are various operational foreign airlines. Among airlines which provide more frequent  services are Aerocaribbean, Aeroflot, Aerovaradero, Air Canada, Air Caraibes, Air Europa, Air France,  Aeromexico, Bahamasair, Blue Panorama, Cayman Airways, Comercial take off S.A, Conviasa, Copa Airlines,

Cubana de Aviación, Elca S.A., Iberia, Interjet, Lan Chile, Martinair, Taag, Taca, Tame, KLM y Virgin Atlantic. Nevertheless, the country receives throughout the year a great number of charter flights, which have connection with almost all.

Maritime transportation: Cuba has 32 commercial ports. The most important ones are Mariel, Havana, Santiago de Cuba, Cienfuegos, Matanzas, Moa, Gerona, Cayo Largo, Batabanó and Nuevitas.

The most modern port in the country is the Mariel port, located in Artemisa province, within the Mariel Special Development Zone, which is about 45 km to the west of Havana.

Since the port is situated in the middle of the Caribbean region and the Americas, in the intersection of the North-South/East-West axes of the maritime commercial traffic of goods, it constitutes the center of a 1000- mile radius circumference in which the main ports of the region are located. It has a modern  container terminal with 702 meters of quay, which has the necessary capacity and services for the  operation of Super Post-Panamax ships, by means of modern and highly automated equipment to handle,  store, connect and control containers.

Financial and Banking system

The national financial and banking system, whose governing body is the Banco Central de Cuba (Central Bank of Cuba), comprises nine commercial banks, 15 non-banking financial institutions, 10 representative offices of foreign banks in Cuba, and three representative offices of non-banking financial institutions. The representative offices of foreign banks based in Cuba do not work as banks or branches thereof; they are simply responsible for the management and promotion of bank activities carried out by the bank they represent and by the institutions of the Cuban banking system and other national entities.

Financial Insurance: The insurance activity in the country can be carried out by public corporations, mutual and state companies, recognizing that the work of insurance entities shall be kept within the bounds of insurance and reinsurance operations. The Ministry of Finance  and  Prices  (MFP  by  its  Spanish  initials) is the governing body of the insurance activity in the  national  territory.  There  is  also  an  Insurance  Superintendence, attached to the MFP, which performs control and supervision duties.

The most used insurance coverage that are commercialized  nowadays are: cargo insurance, fire and  allied  lines insurance, non-maritime civil liability insurance, financial insurance, industrial facility insurance, oil and gas insurance, maritime insurance, aviation insurance, agricultural  insurance,  land  transport  vehicles  insurance, various types of civil liability insurance and personal  insurance.

Structure of the Cuban business system: The Cuban business system is undergoing a restructuration, in compliance with Guideline No. 6 of the Economic and Social Policy of the Party  and  the  Revolution  that  was passed in the 6th Congress of the Cuban Communist Party, and stipulates the separation of the state and business functions. There are currently 10 014 entities in the country organized as companies,  trading  companies, cooperatives and subsidized units.

Economic framework

Business environment

Advantages of investing in Cuba

  1. Reorganization of the country policies, based on the updating of the economic model; these policies will define a new role for foreign investment and prioritize a more aggressive promotion thereof in the country.
  2. A regulatory framework and updated foreign investment policy with warrantees andincentives for investors.
  3. Legal, social and political stability.
  4. A highly qualified personnel.
  5. A favorable geographic location.
  6. Availability of natural resources.
  7. Existence of a special development zone with a modern port for ships with a maximum draft of 17,0 m and state-of-the-art technology.
  8. Access to maritime transportation by the main international shipping companies.
  9. The multilateral and bilateral trade and investment agreements signed by Cuba.
  10. Existence of an investment promotion agency (Center for the Promotion of Foreign Tradeand Foreign Investment – ProCuba by its Spanish initials), subordinated to the Ministry of Foreign Trade and Investment (MINCEX by its Spanish initials), which has connections and agreements with counterparts.
  11. Existence of a Chamber of Commerce that has links with similar organizations from other countries and has carried out investment promotion actions.
  12. Existence of embassies and commercial representative offices abroad.

Business opportunities and sectors targeted for foreign investors

Business opportunities in Cuba will be promoted through a diverse Portfolio of Opportunities prepared by MINCEX and approved by the Council of Ministers, and published on a yearly basis, which will offer general information on every sector or activity and will provide investors with the key elements of the projects prioritized in the country.

The description of the proposed foreign investment opportunities appearing in the aforementioned Portfolio, according to Article 5 of Decree No. 325 entitled “Foreign Investment Act Regulations”, will include information related to:

a. Name of the project.

b. Objectives, scope and bases.

c. Identification of the domestic investor and his participation in the business.

d. Foreign investment modality.

e. Term of validity.

f. Estimated investment amount and main profitability indicators.

g. Microlocalization.

h. Current situation of the industry or service to be executed, which requires the incorporation of foreign capital.

i. Market.

j. Other aspects.

According to Article 11.1 of Law No. 118, foreign investment may be authorized in all sectors except for:


  1. The health care services for the Cuban population, excluding their business systems.
  2. The education services for the Cuban population, excluding their business systems.
  3. The  armed  forces,  excluding  their  business systems.

According to the Constitution of the Republic of Cuba, the press, the radio, the television, the film industry  and other mass media following media shall never become private property.

The sectors considered priorities are agriculture and  forestry,  the  pharmaceutical  and  biotechnological fields, the food, sugar, light, chemical, electronic, iron, steel, and machine industries, as well as tourism,  transportation, health care, construction, energy and mines, and wholesale trade and audiovisual.

Mariel Special Development Zone

In  September,  2013,  the  Mariel  Special  Development Zone (MSDZ) was created; it is located to the west of Havana city, at a distance of 45 km and has an area of 465,4 km².

The Zone has very favorable location and logistic conditions, especially after the investment made in  the  Mariel Port. It constitutes a space in the national territory that is not delimited within the customs  boundaries, and in which special policies and regimes are applied, with the goal of promoting  sustainable  economic development by attracting foreign investment, technological innovation and industrial  concentration, with a view to increase exports, effectively replacing  imports, and generating new sources of employment, in constant articulation with the domestic economy.

Activities and sectors prioritized in the MSDZ:


  1. Biotechnology, development and production of drugs
  2. Containers and Packaging
  3. Industry
  4. Renewable energy
  5. Agriculture
  6. Food industry
  7. Industry
  8. Telecommunications and Informatics
  9. Tourism and Real Estate
  10. Investments in Infrastructure

Establishment of Business in Cuba

At the moment of deciding on a foreign investment project that could be of economic interest for Cuba, foreign investors could select the project included in the Portfolio of Opportunities that would be the most  compatible with their economic interests and possibilities, or could also bring a proposal of a specific  project not included in the aforementioned Portfolio, following the steps listed below.


In order to establish an international economic association, domestic investors must negotiate with foreign  investors every aspect of the investment, including its economic feasibility, their respective contributions as appropriate, the management and administration form of the association, as well as the relevant legal documents for its formalization (article 19.1 of Law No. 118).

In the case of a totally foreign capital company, MINCEX shall indicate the foreign investor the Cuban entity in charge of the branch, sub-branch or economic activity in which he intends to invest, and with which he must analyze his proposal and obtain the relevant written authorization (article 19.2 of Law No. 118).

Incentives and warrants for investors

Chapter III of Law No.118 stipulates the following:

  1. Foreign investments shall enjoy protection and security and cannot be expropriated, unless such action is executed for reasons of public or social interest, in accordance with the Constitution, the international   treaties signed by Cuba and the legislation in force, with appropriate compensation for their commercial value established by mutual agreement.
  2. The State shall guarantee the free transfer abroad, in freely convertible currency, free from taxes or any other fees, of the dividends or profits obtained by the foreign investor.
  3. Foreign investments in the country shall be protected against legal claims by third parties or the extraterritorial implementation of other states’ laws, according to the Cuban laws and the rulings issued by Cuban courts.
  4. The foreign investor can sell or transfer his rights to the State, the parties of the economic association or  to a third party, provided this is previously authorized by the government.
  5. Foreign investment shall be subject to the special tax regime established in the Act until the deadline for this special tax regime is due.
  6. The Cuban state shall guarantee that the benefits granted to foreign investors and their investments are maintained during the whole period for which they were granted.
  7. The term of the authorization granted for the development of operations may be extended by the very  authority that granted it, provided that such extension is requested by the parties concerned before the set deadline expires.


The investment of foreign capital is governed by Law No. 118 “Foreign Investment Act” dated March 29th, 2014, and enforced on June 28th of the same year.

The legal framework, which includes supplementary rules of the Law, was published in the Official  Gazette  No. 20, Special Issue, on April 16th, 2014. It includes Decree Law No. 325/2014 of the Council of Ministers, Resolutions No. 46 and No. 47 of 2014 issued by Banco Central de Cuba (Central Bank of Cuba-BCC by its Spanish initials), Resolution No. 16 of 2014 issued by the Ministry of Work and Social Security (MTSS by its Spanish initials), as well as resolutions No. 128 and No. 129 of 2014 issued by the Ministry of Foreign Trade and Investment (MINCEX).

On May 24th, 2014, Agreement No. 7567 of the Council of Ministers was adopted. Such agreement delegates to the ministers of Foreign Trade and Investment, and Tourism, the duties of approving and  authorizing the international economic association agreements aimed at the management of production  and services, and the rendering of professional services; and the hotel management agreements respectively.

Modalities of foreign investments

Foreign investment, according to Article 12 of Law No. 118 can be defined as:

a. Direct investment, in which the foreign investor  participates as a shareholder in a joint venture or in a totally foreign capital company; or makes contributions to international  economic association agreements,  thus participating, in an effective manner, in the management of the business; and

b. Investments in equities or other securities or bonds, either public or private, which do not fit the definition of direct investment.

In addition, foreign investment according to Article 13.1 of the Law shall adopt one of the modalities  appearing below, according to the definitions included in Article No. 2:

Joint Venture

Cuban trading company which adopts the form of a corporation with registered shares in which one or more national investors and one or more foreign investors participate as shareholders. (In Article 14 and its items in the Second Section of Chapter IV of Law No. 118, the main aspects regarding this modality are presented).

The establishment of a joint venture shall require the drafting of a public deed as an essential condition for its validity.

The Articles of Association (which will include the provisions related to the organization and operation of the company) as well as the Authorization and the association agreement will also be attached to it. The joint venture will acquire legal personality upon being registered in the Market Registry.

Joint ventures may establish offices, representations, branch offices and subsidiaries both within the national territory of Cuba and abroad, and participate in entities abroad.

International Economic Association Agreement

An agreement between one or more national investors and one or more foreign investors for the realization of activities fitting an international economic association even without this being a legal entity distinct from that of the parties. (In Article 15 and its items in the Third Section of Chapter IV of Law No. 118, the main aspects regarding this modality are presented).

According to article 13.2 of Law No. 118, international economic association agreements include, among  others, the risk contracts for the exploration of nonrenewable natural resources, construction, agricultural production, and hotel, production or services management and the contracts for the provision of professional services.

Total Foreign Capital Company

Trading entity with foreign capital without the involvement of any national investor or natural person with foreign capital.

(In Article 16 and its items in the Fourth Section of Chapter IV of Law No. 118, the main aspects regarding this modality are presented). 

In this modality, the foreign investor shall manage the company, enjoy all the rights thereof and be liable for all the obligations established in the Authorization. In addition, upon the company’s registration in the Market Registry, foreign investors shall be able to settle within the national territory of Cuba:

a) As natural persons, acting on their own behalf; 

b) As legal entities, by setting up a Cuban subsidiary office of the foreign entity they own, by means of a public deed, in the form of a corporation with registered shares; or

c) As legal entities, by establishing a branch of a foreign entity.

A totally foreign capital company incorporated as a subsidiary shall be able to set up offices, representations, branches and subsidiaries both within the national territory of Cuba and abroad, and have interests in entities abroad. 

Although with regards to joint ventures and totally foreign capital companies, Law No. 118 stipulates that they shall be able to set up branches within the national territory of Cuba, the purpose of such entities would be to carry out the business activities for which they have received authorization, so they must not be mistaken for other kind of branches created in the Republic of Cuba, under Decree No. 206 of April 10th, 1996. Such Decree enforced the Regulations of the National Registry of Branches and Agents of Foreign Trading Companies, which stipulate in their Article 26 that the registration in the said Registry implies an authorization to engage in commercial activities related to the sector of the trading company or business person in question, in compliance with the license issued in each case, which forbids the execution of the following activities:

a) to import and export directly, with commercial purposes;

b) to engage in the wholesale and retail trade of goods and services, except the after-sales and warranty services, specifically agreed upon in the contracts that allow foreign trade operations; and

c) to distribute and transport goods within the national territory.

These conditions open the way for cooperatives, both agricultural and nonagricultural to be regarded as national investors on account of their status as legal entities.

Banking regimen

Article 25.1 of Chapter IX of the Foreign Investment Act stipulates that joint ventures, national  investors  and foreign investors, which are parties to international economic association agreements, and totally foreign capital companies, shall be entitled to open bank accounts in any bank of the National Banking  System, through which they shall receive and make payments related to their operations, according to the monetary regime in force. Likewise they shall also be entitled to access the services offered by the financial institutions established in the country.

According to Article 25.2 of Law 118, joint ventures and national investors which are parties to international economic association agreements shall be entitled to open and operate accounts in freely  convertible currency in banks established abroad, with the previous consent of Banco Central de Cuba and in conformity with the regulations in force. Likewise, they shall be entitled to engage in lending operations with foreign financial institutions in accordance with the relevant regulations in force.

On the other hand, Resolution No. 46/2014 of Banco Central de Cuba stipulates that natural persons  or  legal entities, once the investment has been approved, shall request in a bank authorized to operate in the  national territory by Banco Central de Cuba, the opening of a demand deposit account intended to receive funds in Cuban pesos or freely convertible currency during the institutionalization period. Once the company has been incorporated or the international economic association agreement has been  formalized, it will be possible to transfer the funds to the current account of the newly established  company, or of the parties to the international economic association agreement.

According to the provisions of Law No.  118, businesses shall operate in compliance with the monetary regime in force, that is to say, in freely convertible currency (MLC by its Spanish initials) and in convertible pesos (CUC). Nevertheless,  Law  No.  118  includes  several  temporary  provisions  referring  to  monetary  aspects, which read as follows:

FOURTH: Joint ventures, parties to international economic association agreements and totally foreign  capital  companies,  may  exceptionally be authorized by the  Council  of  Ministers to make  and  receive  certain  payments  in  Cuban pesos.

FIFTH:  In  order  to  make  a  payment  in  Cuban pesos, as established in Article 30, item 4 (payment to the Cuban and foreign staff with permanent  residence  in  the  Republic  of  Cuba),  such amounts should be previously obtained in Cuba convertible pesos.

SIXTH: The payment of taxes and other collectable customs fees by investors shall be made in Cuban convertible pesos, even in those cases in which  the amounts are expressed in Cuban pesos.

SEVENTH: The aforementioned Fourth, Fifth and Sixth provisions shall remain valid until the monetary unification is established in the country, after which the obligors under this Act shall be governed  by  the  rules established for this purpose.

Export-Import regimen

Article 26.1 of Chapter X of Law No. 118 corroborates that all forms of investment shall be entitled to  import and export directly whatever is needed for their operation, in accordance with the  relevant  provisions  established.  The  commercial registration shall be carried out through MINCEX,  which  will  approve  the  code  for  the products that the company is authorized to import and export directly. Nevertheless, the acquisition of goods and services in the national market  will  be  encouraged,  provided  that the said goods  and  services  meet  the  conditions  of  the international market.

For the execution of these activities, it will be necessary to take into account the content of Resolution  No.  50/2014 of MINCEX, which approves  the  “General Regulations on the Export and Import Activities” aimed at defining the principles and basic standards that are mandatory for the  entities  authorized  to  engage  in  the import and export of goods.

Article 2 of this Resolution establishes that, for the purposes of the aforementioned  Regulations, the term “entities” shall apply to those institutions that engage in the import and export of products, and are registered in the National Registry  of  Exporters  and  Importers,  attached to the Chamber of Commerce of the Republic of  Cuba,  excluding  totally  foreign  capital  companies.

Special Tax Regimen

Joint ventures and foreign and national investors, which are parties to international economic association agreements, shall, for the fulfillment of their tax obligations and their rights as taxpayers, abide by Tax Law No. 113 of July 23rd, 2012, published in the Official Gazette No. 53, Regular Issue, on November 21st, 2012, including the adjustments indicated as part of the Special Tax System in Chapter XII of Law No. 118 “Foreign Investment Act”, which stipulates the following facilities, among other aspects:

  1. Foreign investors shall be exempt from paying personal income taxes for the business dividends or profits.
  2. The profit tax shall be paid by applying a 15 % tax rate on the net taxable profit.
  3. Investors shall be exempt from paying profit taxes for a period of eight years as from the date of their incorporation.
  4. Investors shall be exempt from paying profit taxes when the reinvestment of net profits and other benefits is authorized.
  5. There shall be 50% discount on the tax rate applicable to the tax on wholesales and services. There shall also be an exemption from paying this tax during the first year of operations.
  6. Investors shall be exempt from paying taxes on the use of labor force.
  7. Investors shall be exempt from paying customs duties for the import of equipment, machinery and other means during the investment process.

Totally foreign capital companies shall be required, for as long as they remain operational, to pay taxes under the law in force, without prejudice to the tax benefits that are to be established by the Ministry of Finance and Prices, provided that this be of interest to the country.

Law No. 113 of the Tax System, (Tax Law No. 113 of July 23rd, 2012), published in the Official Gazette No. 53, Regular Issue, on November 21st, 2012, which establishes the following taxes, contributions and rates:


1. On personal income

2. On profits

3. On sales

4. Special tax on goods and services

5. On services

6. On the ownership of houses and vacant lots

7. On the ownership or possession of agricultural land

8. On idle agricultural and forest land

9. On land transportation

10. On the ownership or possession of ships

11. On the transfer of property and inheritance

12. On documents

13. On the use of labor force

14. On the use or exploitation of beaches

15. On  the  approved  dumping  of  waste in drainage basins

16. On the use or exploitation of bays

17. On  the  use  and  exploitation  of  forest  resources and wild fauna

18. On the right to use terrestrial water

19. Customs duties


1. To social security

2. Special contribution to social security

3. Territorial contribution to local development

Tax rates

1. On toll

2. On airport services for passengers

3. On the establishment of ads and advertising