Analysis: Is there anything ‘new’ in Cuba’s new foreign investment law?

By José Manuel Pallí, Esq.

For the past few days, everyone, in and out of Cuba, has been commenting on a law — Cuba’s ‘new’ foreign investment law — no one seems to have fully read yet.

An American friend from Massachusetts, finding me all worked-up with that very same topic, wistfully asked me why on earth is that law so important when, on the one hand, Cuba remains a small communist country where few would entertain investing in, and, on the other hand, it is forbidden to us in the United States to invest in it anyways. I explained to him, who is spending his annual swallow stay in Miami, that this is not America: this is “Cuban America” (where else in the USA would you need to clarify that your friend is “an American”?…).

Is my friend right? Is this just much ado about nothing? The “normal” source for seeking confirmation or advice in this regard should be any of those colleagues of mine who practice law in Cuba, many of them excellent lawyers who I presume are behind some of the changes the new law may entail, since I know first-hand of their concern with the excessive “administrativización” (what we call bureaucratization) of Cuba’s laws, and this is one field where Cuban bureaucrats have, for years, run amok.

And yet, here I am, a Florida lawyer who happens to also be a lawyer in Argentina (and seldom writes about Floridian or Argie laws) writing about Cuban laws. Why? Because, on the one hand, my colleagues in Cuba (whose collective voice is only heard behind heavy curtains there) are as eerily quiet as ever, and on the other hand “Cuban America” prevents the rest of the country from having the kind of “normal” relation with Cuba, its people and its laws that it could and should have.

In any event, no lawyer, whether in Cuba or here, can seriously comment on any given law without first reading the full text of it. In the case of Cuba’s foreign investment law, the text based on which valid comments could be made is the one published in Cuba’s Gaceta Oficial, and such publication is still pending.

It could also prove useful to read the law, once it is published and becomes “the” law, in the context of the other documents Cuba has announced as companions to the law itself, a Reglamento or regulatory act (an improvement on the  previous foreign investment law, which lacked one) and a series of “sectorial policies” that will serve as a guide to what kind of foreign investment Cuba is likely to welcome in any given sector of its economy, since what we presently “know” about the law indicates the Cuban government’s approval to most foreign investments is still a requirement (as it is in many other countries) and remains highly discretionary. Diluted administrativización may be in store, but not the kind that would get Cuba a Top 10 ranking in any among the plethora of indexes that grade (mostly arbitrarily) the different nations’ environment for business purposes.

The fact is Cuba’s previous foreign investment law (enacted in 1995) is not a bad law at all, although as is the case with all laws, if it is not applied to all those subject to it in a fair and unprejudiced way, it is irrelevant, no matter how well crafted. It does have a chapter (the 11th) that is a ridiculous attempt to put a corset on labor relations between foreign investors and their Cuban employees, and I am still hoping to see it gone by the time I get to read the law published at the Gaceta Oficial de Cuba (little more than a wishful thought of mine, I know…).

But if most of the comments and analysis already made regarding this “new” law — both in Cuba and here in Miami — based on a draft version prove to be accurate, I am afraid it may all end up being much ado about nothing indeed, and even give the hardliners who have historically driven U.S.  policy towards Cuba, and who absurdly claim all changes Cuba has made over the past six years to its socio-economic model are cosmetic in nature, new ammunition to preserve the status quo. If this is all there is to it, the Miami Herald’s headline once the law is published may well read:

“Cuba’s “new” foreign investment law: brought to you by Revlon”…

José Manuel Pallí is president of Miami-based World Wide Title. He can be reached at; you can find his blog at

You May Also Like