Cuba to Allow Foreign Investment in the Private Sector

Among the announcements this week by the Minister of Economy and Planning, Alejandro Gil, is the approval of foreign investment in the private sector. The move is among the 75 changes meant to boost Cuba’s economic recovery.

“We are authorizing foreign investment in the non-state sector. The government will set priorities and limit which private businesses receive foreign investment,” he said.

The regulatory framework for foreign investment in the non-state sector needs to be established.

On Friday, the Ministry approved 89 new micro, small and medium-sized private enterprises (MSMEs) applications. In total, 4,376 MSMEs have been approved since the process began last September.

Of these small businesses, 4,269 are private and 51 are state-owned. Fifty-six of these are cooperatives, 53% are conversions of pre-existing businesses, 47% are new ventures and 126 are local development projects. Eleven were developed in the Science and Technology Park of Havana.

An estimated 74,306 new jobs will result from this move.

Also among the measures approved on Thursday is the establishment of a new foreign exchange market to include US dollars. Cuba faces shortages of medicines, food and fuel because of the shutdown of tourism during the pandemic. The Trump government also forced closure of Western Union offices in Cuba and increased sanctions. These deprived the economy of two sources of foreign currency over the last two years. These events also negatively affected Cuba’s entrepreneurs.