Cuba Practice Update

by Akerman LLP
Contact

Cuban Parliament Passes New Foreign Investment Law

On March 29, 2014, Cuba's 576-member National Assembly unanimously approved a measure designed to encourage foreigners to invest more than $2 billion a year in the island’s lagging economy. Cuban authorities claim that the new measure is a significant departure from its predecessor - law 77 of 1995, and promises foreign investors less government interference, reduced taxes on profits and employment, and greater bureaucratic efficiency.

Key provisions of the new law are said to include:

  • Expanded Investment Opportunities: With a few exceptions (including healthcare and education-related services), every area of the Cuban economy will be open to investment. These include previously off-limits sectors, such as sugar and agriculture.
  • Real Estate Acquisition: Under the new law, foreigners may be able to buy real estate, including residences and buildings for office space, as well as for use in tourism and other sectors.
  • Corporate Tax Cuts: Tax rates on net corporate income have been slashed in half to 15 percent. During the first eight years of operations, all new foreign ventures are exempt from taxes on profits.
  • Greater Efficiency: Government ministries and associated agencies will be required to make decisions within 60 days of receiving proposals from foreign investors.
  • Repatriation of Profits Guarantees: According to the new law, the Cuban government guarantees the free transfer abroad of profits, dividends, and any revenue derived from the sale of real property or corporate shares, free of taxes or other duties.

This measure appears consistent with Cuba's broader ongoing reforms that seek to decentralize government control of its economy. If fully enacted, Cuba’s new law will provide much needed incentives for foreign investment on the island, and Cuba’s top economic planner Eduardo Murillo hopes that it will boost the island’s GDP growth from an anemic 2.2 percent in 2013 to around 7 percent by 2016.

While liberalization of foreign investment is another promising sign of change in Cuba, the measure’s success will be heavily dependent on how it is implemented under the accompanying regulations yet to be released. The fact remains that Cuba’s historic relations with foreign investors have been problematic. For example, in 2013, Cuba jailed executives from British investment and trading firm Coral Capital Group Ltd. for unspecified violations of Cuban law, only releasing them after a year in Cuban prison. Accordingly, for success the Cubans will need to provide real incentives and guarantees for business - as well as demonstrate respect for the rule of law - through the regulations.  

The new law also appears to be aimed at modifying Cuba’s relations with the United States. Currently, U.S. law, including the Cuban Democracy Act of 1992 and the LIBERTAD (Helms-Burton) Act of 1996, explicitly prohibit U.S. persons and entities from investing in Cuba. Cuban sources have commented that the U.S. embargo is now harming American businesses interests, and have gone so far as to make clear that investments by Cuban Americans living abroad would be considered for approval.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akerman LLP | Attorney Advertising

Written by:

Akerman LLP
Contact
more
less

Akerman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.