Cuba decentralizes approval of (some) foreign investments

Cuba plans to attract between $2.5 and $3 billion in foreign investment each year (Source: ACN)

The implementation of some projects with foreign capital is to proceed faster in Cuba in the future. Acuerdo 9374, which appeared in the Official Gazette on April 3, shifts the approval of international economic associations (“Asociación Económica Internacional”) from the level of the Council of Ministers to the individual ministries. This is intended to speed up the often lengthy approval processes, particularly in agriculture and tourism.

“The internal process of analyzing and approving business proposals involving foreign investment must be adapted to the country’s new realities,” the law’s explanatory memorandum states. In the food production sector in particular, it is hoped that the economic association mechanism will improve the inflow of capital. The Ministry of Agriculture is now required to use this form specifically “as a modality for foreign investment to increase agricultural production in the country.” Until now, economic associations were known mainly in the context of hotel management contracts from the tourism sector.

In order to speed up procedures, in the future the Ministry of Agriculture, the Ministry of Finance and the Ministry of Tourism will be able to decide independently on the approval of projects within their jurisdiction. Previously, all projects had to be approved “manually” by the Council of Ministers, which was repeatedly criticized by investors and economists due to the lengthiness of the procedure. Furthermore, the term of corresponding contracts can also be extended in the future at the level of the Ministry of Finance. The reform will come into effect on May 3.

In the context of the current crisis, Cuba is currently looking massively for foreign investors to develop its economy and has removed several hurdles to this end in recent months. In principle, investments are now possible in all sectors, small-scale projects by small and medium-sized enterprises are also welcomed in a shift of paradigma that once favored large-scale investments. Recently, the catalog of tenders was expanded in the food industry and agriculture. These two sectors, along with the expansion of renewable energies, are among the country’s three main priorities. With the election of a new Council of Ministers on April 19, long-time Foreign Trade Minister Rodrigo Malmierca, who has recently come under criticism for his lack of success in reducing bureaucracy, was replaced by Cuba’s chief foreign debt negotiator, Ricardo Cabrisas.

This article was first published on Cuba Heute, a German-language news portal.

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