The Cuban Interior Ministry (MININT) chose May 20, Cuba’s independence day, to publish Resolución No. 4/14, which lays out the procedure for foreign real estate owners to obtain a visa.
Foreign individuals (personas naturales extranjeras) who want to invest in “owning” or renting houses in Cuba can obtain a special visa that makes them a Cuban resident for such purposes, since only Cuban residents can hold title to housing in Cuba under the present state of Cuban law. The status lasts one year, but can be renewed yearly, without a limited number of renewals. This MININT resolution also sets the conditions affecting the visa holder’s residence in Cuba.
Before we begin hollering and casting stones at this latest example of moral turpitude on the part of the Cuban authorities (how dare they sell to wealthy foreigners the ‘right’ to live in Cuba!!??), we may want to take note of the fact that this is precisely what the United States has been doing under its investor-type visas for many years.
At about the same time Resolución No. 4/14 showed up in the Gaceta Oficial, our local authorities in Miami were celebrating our Magic City’s designation as an “EB-5 regional center.”
When U.S. laws created this Immigrant Investor Pilot Program back in 1992, regional centers were meant to be in areas that were among the poorest and in need of more assistance in the country. Miami, where real estate prices are way beyond the reach of the average Miamian’s income, proudly claims to be the first city in Florida and in the Southeastern United States to be so designated.
In the smallest of nutshells (since this column isn’t about U.S. laws), an EB-5 visa gives green cards to foreign investors and their family members under 21 years of age who invest a minimum of $500,000 into a project that, within two years, creates at least 10 jobs in the United States. If those 10 jobs are not created within two years, the investor may lose his investment and must go back home.
I know of no statistics showing winners and losers in this game, but I don’t even want to think about the trouble I might get into if I were to tell you how I believe these investments compare, risk-wise, with investing, say, in Mexico (or dare I say Cuba?). And that was before the ‘program’ evolved — the creativity of my fellow lawyers is limitless — into what now covers investment in fancy real estate products. This is a field that, especially in Miami, historically tends to be of a highly speculative nature.
The Cuban visa for real estate investors requires, just as many of our visa types do, a petitioner: Cuba’s Tourism Ministry (article 2 of Resolución 4/14). Together with the other elements you usually present to obtain a visa anywhere (passport, pictures etc.), you need to present a letter from the ministry, asking the MININT to issue you one of these real estate-related resident visas.
The migratory category Cuba assigns to the holder of this visa type is called Residente de Inmobiliaria (article 3), which, at first glance, seems to suggest that the ‘real estate resident investor’ needs to be housed at, say, the offices of Pedro Realty or some other realtor’s headquarters. And the reference found in the first of the ‘whereas’ clauses at the beginning of Resolución 4/14 to houses in complejos inmobiliarios, or real estate developments, suggests the petitioner may not be likely to petition you for one of these visas if what you want to buy or rent is one of these beautiful Vedado mansions in Havana. But I would give it a try, nonetheless.
If you get one of these visas, you will have to request and carry always with you an ID document (articles 8 to 13 of Resolución 4/14) that says you are a real estate resident investor (something Americans are often inimical to but is quite common in many places). You will not need to live in Cuba all the time; you can spend a year abroad, without setting foot in Cuba and still not lose your status as a Resident de Inmobiliaria (article 6), and even extend your absence for a longer time by asking for a waiver at a Cuban consular office.
During your stay in Cuba under this migratory status, you will be able to engage in pre-authorized touristic and/or business activities of the kind Cuba’s law allows (article 14), and travel anywhere in the island (wow…) in pursuit of such activities (article 15).
You lose your real estate resident investor migratory status (a) when you are no longer an owner or tenant of a house in Cuba, (b) when you stay away from Cuba beyond the time prescribed in article 6, mentioned above, or (c) if your behavior is found contrary to Cuba’s constitution, its laws, or the conditions the visa places upon your stay (article 17).
In the same edition of the Gaceta Oficial (No. 25 Extraordinaria de 20 de mayo de 2014), you can read another resolution, this one from the Ministry of Tourism. In Resolución 47/14, you will find your bearings as to how you get this dependency of the Cuban government to become your petitioner for one of these visas. This resolution also describes what happens when a visa holder in this category does something (any of the three situations listed in article 17 of the MININT resolution) that leads to his losing his status as a Residente de Inmobiliaria. Article 11 of the Tourism Ministry resolution tells us that it is the responsibility of the head of the entity that administers the real estate development where the house or apartment in question is situated to report to the Ministry of Tourism the circumstances affecting the status of the visa holder who occupies that dwelling. The Tourism Ministry then must, within three working days, report the situation to the MININT explaining why the reasons behind the issuance of that particular visa do not hold water any longer under those new circumstances (article 12). After that, my impression is sayonara could be just around the corner.
This Tourism Ministry Resolution also contains, in my personal opinion, a strong indication that these visas will only be used for those who buy or rent housing in a certain type of real estate development (and not for isolated pieces of real property); the recurrent reference in the two resolutions commented here to “el complejo inmobiliario donde está ubicada la vivienda” strengthens my perception that this visa may not be suitable for those foreigners who want to simply buy an old apartment in a pre-1959 building in Old Havana: They will still have to buy it under someone else’s name, if they themselves are not permanent residents in Cuba. Article 1 of Resolución 47/14 defines complejo inmobiliario as “aquellos construidos por entidades cubanas autorizadas, con la finalidad de la venta o arrendamiento de viviendas.” (“those built by authorized Cuban entities, with the goal of the sale or lease of dwellings”)
There are too many questions left unanswered, in my humble view.
For instance, are the foreign investors who hold this kind of visa limited to be rent-paying tenants when they opt not to buy a house in Cubs, or can they rent out a house they bought as an investment? I assume the latter, since it would be senseless for a law to force investors to keep their houses vacant during the time they are abroad (which could be a year or more).
If the Residente de Inmobiliaria can buy a dwelling and then rent it, is there any limit to how many such dwellings he can buy? My guess here would be that he can buy only one, despite the fact that this presumed ability to own and rent seems to skirt the provision under Cuba’s housing laws, according to which only those who are permanent residents in Cuba can own a house there, and only if they live in it.
But the thing I regret most is that neither of these two resolutions shed any new light on the nature and extent of the rights of those foreigners who buy real property in Cuba will get; what I wrote in a previous column almost exactly a year ago still is, to the best of my knowledge, all we know about that important topic.
Before there is a crystal clear answer to the question “what does ‘owning’ residential real property in Cuba by a foreigner entail?”, it will be hard to think of Cuba as a competitor for the US$550,000 each of the many Chinese EB-5 aspirants must chip in to bet on a permanent and unconditional green card. But even as things stand today, I would hesitate to say who is the wiser investor. So who knows? Maybe some people from China will still prefer to take the risk on Varadero than on Brickell Avenue.
José Manuel Pallí is president of Miami-based World Wide Title. He can be reached a email@example.com.