This requirement will only remain in force for the extraction of natural resources and public services sectors.
HAVANA TIMES – Cuba’s Foreign Trade and Investment minister, Rodrigo Malmierca, announced that the State will no longer require to be a majority share of joint business ventures in the tourism, biotechnology, and wholesale trade sectors. He said this will lift an important barrier for foreign investment, EFE news agency reports.
This majority ownership requirement will only remain in force for the extraction of natural resources and public service sectors. The minister spoke during the recently concluded 2020 Business Forum held online in Havana.
Malmierca explained that in tourism, biotechnology, pharmaceuticals and wholesale trade, “projects can be 50-50 or the Cuban State can hold a minority share.” He didn’t clarify whether this new directive is already in force or whether it will happen soon.
Cuba authorized mixed companies in the 1990s. These included hotel resorts belonging to the State and run by Spanish companies such as Melia or Iberostar. Those joint ventures acted as an important engine of the economy. To date, the Cuban government’s share has always been more than a 50% interest.
Malmierca highlighted the need for “more active” foreign participation in the Cuban economy and said that businesses with lesser scope and investment but focused more on exports to encourage local development, are in the works.
Mariel Special Development Zone
The Cuban minister also announced that the Mariel Special Development Zone (ZEDM), Cuba’s main project to attract foreign investment, has brought in over 730.5 million USD (some 605.5 million euros at the current exchange rate) in investment in 2020.
A modern business project and trade port to the west of the capital, ZEDM has 55 approved projects, eight of which are funded with Cuban capital alone, 30 funded 100% by foreign capital, 15 mixed companies and two international economic associations.
Founded in 2013, this project and port was the government’s way of encouraging comprehensive proposals that allow the country to substitute imports, encourage exports of national produce with greater added value and to generate jobs.
ZEDM occupies an area of 465.4 km2 in an important strategic area for maritime transport. Mariel is one of the main ports on Cuba’s north-western coast.
New business portfolio
Malmierca presented a new business portfolio on the island that has 503 projects seeking foreign investment. This is 43 more than the previous portfolio. The total requires an estimated 12.07 billion USD in investment (more than 10 billion euros).
Considered the locomotive of the Cuban economy, the tourism sector has the greatest number of opportunities, with 131 ventures. According to official estimates, Cuba needs over 2 billion USD (1.657 billion euros) per year in foreign investment for strategic sectors to generate exports, replace imports and promote productive chains.
Between 2018 and 2019, the country brought in over more than 1.7 billion USD (1.409 billion euros) with 25 new foreign investment ventures.
The Business Forum held online because of COVID-19, included business people from 93 countries, to push for foreign capital investment in Cuba.
Cuba’s chronic economic crisis was greatly intensified because of the pandemic, which hit tourism particularly hard. Moreover, tougher commercial and financial sanctions from the US in the past two years only worsened the situation.