Cuba Publishes Text of Foreign Investment Law

[FrodosPet]

http://abcnews.go.com/International/wireStory/cuba-publishes-text-foreign-investment-law-23349640

Cuba on Wednesday published the full language of a new law that seeks to make it more attractive for foreign investors to bring badly needed capital to the island, but provides less advantage for projects that are 100 percent foreign-financed.

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The measure, which takes effect in late June, includes tax breaks for new investments and property guarantees for investors. It also outlines arbitration procedures and labor rules for foreign-financed projects.

Investments in mixed-ownership projects or in tandem with independent cooperatives will enjoy a tax holiday for the first eight years of operation and pay 15 percent on profits after that — about half the current rate. Such operations will also be exempt from payroll taxes.

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Communism is not going away in Cuba in the near term, but it appears that it is starting to recognize that investment for gain is a necessary component for economic development.

[FrodosPet]

1. New Foreign Investment Law Favors Cuba’s Development

http://www.cadenagramonte.cu/english/index.php/show/articles/17831:new-foreign-investment-law-favors-cubas-development

Havana, Cuba, Apr 24.- The new Foreign Investment Law is necessary because it will be implemented in a peculiar stage of development of the country and amidst the update of Cuban economy, said Foreign Trade and Investment Minister Rodrigo Malmierca.

In a prime-time television show, Malmierca explained the main aspects of the new law, recently approved by the Cuban Parliament. He said that the implementation of the new legislation does not mean the abandonment of socialism, but the strengthening of foreign investment as an additional element for the development of the country.

Cuban economy needs to increase its levels over 20 percent, which would favor the growth of the Gross Domestic Product by five percent in a sustained manner. The law will also favor the introduction of capital and so contribute to count on two billion dollars annually, as a complement to the efforts being made by the country, he said.

However, the minister noted that the implementation of the law cannot be looked at separately from the complex situation of Cuba, a country under the US blockade, with debts and high financial risks, which causes investors to operate with some limits and with this in mind the law is crystal clear, attractive and transparent, Malmierca stressed.

The law prioritizes eleven sectors including agriculture, the food industry, the sugar sector, the metal and light industries, the pharmaceutical and biotechnology fields, energy, mines, wholesale market, tourism, construction and transportation

[FrodosPet]

2. Cuba Publishes New Foreign Investment Law

http://www.cmhw.cu/English/?p=947

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Senior government officials have said Cuba needs over 2 billion dollars a year in foreign investment to revive its economy and attain its 7-percent growth target.

The new law offers investors substantial tax breaks and incentives, including a 50-percent reduction of the income tax rate and an eight-year tax waiver, which could be extended by the Council of Ministers.

It also provides foreign investors with a stronger legal framework, including non-expropriation guarantees, except for reasons of public utility or social interest, and then only with due compensation.

Foreign companies’ staff recruitment, barring management posts, will be carried out through a Cuban employment agency, which will be responsible for negotiating with the companies workers’ wages, which will be paid in Cuban pesos.

The agency will also charge the companies a 20-percent commission.
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Are they going to raise the wages above $25 to $30 a month? After all, one fifth of $25 is a five spot. Or does it not matter - the Cuban people only need mass armies of doctors, not clean healthy homes that are not about to collapse on them?