Cuba publishes text of new foreign investment law
After it was approved on March 29 by the National Assembly, the Foreign Investment Law and its accompanying regulations were published in the official gazette and in a special tabloid put out by Cuban Communist Party daily Granma.
This new measure, which replaces a law in effect since 1995, seeks to attract foreign capital to spur the country's development and falls within the scope of President Raul Castro's plan to “update” the island's socialist economic model.
Under the new law, investors are exempt from paying taxes on their personal income and the use of labor, while the levy on foreign companies' profits will be cut in half to 15 percent.
Investors also will enjoy a profit-tax holiday for their companies' first eight years of operation. But the law specifies that the profit tax could be as high as 50 percent for firms involved in natural resource development.
It also states that, excluding management positions, the hiring of Cuban citizens and residents must be done through an employment agency, which will recruit and select workers, negotiate salaries with the foreign investors and be in charge of paying Cuban workers.
Foreign nationals that work for companies subject to the new law, which is to take effect on June 27, or 90 days after it was approved by parliament, may repatriate up to 66 percent of their pay.
Cuba must attract between $2 billion and $2.5 billion in foreign direct investment annually to ensure the sustainability of its socialist economic model and the success of recent market-oriented reforms, according to Cuban government estimates.
The text of the new law was published roughly five months after the decree governing the Mariel Special Development Zone entered into force.
Cuba is looking to attract foreign investors in that $900 million port project in a bid to revive the island's ailing economy. ■