DOING BUSINESS IN CUBA
The Ministry for Foreign Investment and Economic Co-operation (MINVEC) operates a Centre for the Promotion of Investments (CPI), consisting of highly qualified specialists that promote the influx of foreign capital towards industrial, tourist, real estates and any other joint venture businesses. Furthermore, this ministry provides an updated directory with all the possible joint businesses. Essentially, a joint venture will be approved when a Cuban entity requires financial, technological or know-how assistance. The first step in complying with local criteria is to provide a duly legalised document accrediting the constitution of the company which is intending to enter the said joint venture, accreditation of the person who will act as legal representative, bank reports and financial statements audited by an accounting company. The general rule is to provide up to 3 years certified accounts. The applicant should also accredit his identity and his company's documentation via legalization at the Cuban Consul where his company is constituted and by the Cuban Ministry of Foreign Affairs in Havana.
The Foreign Investment Law is aimed at increasing foreign investment and interfacing the said investments into the domestic economy, offering greater security and guarantees to the foreign investor. At the same time allowing Cuba to obtain financial resources, technology and new markets in both production and services where mutual benefits are attainable.
The authorisation to make foreign investments in Cuban territory is granted by the Executive Committee of the Council of Ministers.
Foreign investments within the national territory enjoy total protection and security, they cannot be expropriated, except if that action is carried out for reasons of public use or social interest, declared by the government, in compliance with the Constitution of the Republic. All foreign investments will also be protected from claims by third parties. The State guarantees the foreign investor free transference abroad, in freely convertible currency - and tax free - of all profits derived from the venture, the net profits and dividends that are obtained from the exploitation of the investment.
It is the exclusive faculty of the Council of Ministers' Executive Committee to authorise foreign investments when any of the following sectors are involved or the investment has the following characteristics: Those in which the total amount of the contributions by foreign and national investors is over 10 million US Dollars; companies with 100% foreign capital; those that involve the exploitation of public services such as transportation, communications, waterworks, electricity or to build and exploit some public works; when the foreign company is involved with capital participation of a foreign state; when it is related to the exploitation of natural resources; those that include the transference of state property or real estate, property of the State, and those pertaining to the system of enterprises of the armed institutions.
Agreements authorising or rejecting a foreign investment are issued within sixty natural days from the application date and applicants must be notified in writing.
In order to simplify what is essentially a complicated process here is a basic explanation of the application process.
1. Investigate the business opportunity before submitting any official requests.
2. Create a detailed presentation for the MINVEC officials
3. Explain the financial objectives of the project
4. Explain the methods of recuperating the investment
5. Fix a term for reimbursement and be realistic
6. Create a detailed economic feasibility study
7. Create a detailed marketing study
8. Prepare your companies documents for accreditation in Cuba
9. Provide a draft copy of your proposal to officials for recommendations
10. Once agreed submit the ensemble of documentation for approval
The Central Bank of Cuba, created as a new controlling, regulating and supervising institution for the financial bodies and the representative offices based in Cuba, including the Trade-Free Zones and the Industrial Parks, has among its more important duties to control the national currency's stability, to contribute to the economic balance, to safeguard and manage the country's international reserves, as well as to guarantee the normal working order of payments, both internal and external. The banks and non-banking financial institutions, such as the Cuban Central Bank does, have autonomous character, independent legal personality and its own heritage, it covers its own expenses with income and they are not responsible for the State's obligations or those of its bodies, bureau, companies or other economic institutions.
As part of the reorganisation of the National Banking System and the changes introduced by the new legislation, adapted to international practice and structure, the Grupo Nueva Banca SA was created, it is the major shareholder of the following organisations:
Banco Internacional de Comercio, S.A.
Banco Metropolitano, S.A.
Banco de Inversiones, S.A.
Financiero Internacional, S.A.
Casas de Cambio, S.A. (CADECA)
CompaÃƒÂ±ÃƒÂa Fiducidaria, S.A
Operating ont the island are also the Banco Exterior de EspaÃƒÂ±a, the Banco Bilbao Vizcaya , the Banco Nacional de MÃƒÂ©xico and the Fransabank, ING Bank they all enjoy absolute autonomy in their financial activities.
As part of the reorganisation process of the National Banking System, the Banco Popular de Ahorro was granted a license to develop all kinds of profitable activities related to the banking system, both in national and national convertible currencies, with natural and legal persons, national, foreign or mixed capitals.
Commercial Relations with Foreign Companies
As a general principle, in order to authorise registration of a Branch Office, the Mother Company's constitution is taken into consideration, direct and indirect benefits are assessed, such as the closest links between supplier and company, the quality of products or services that are commercialised, technology transfers, post-sale services and the image of Cuban Foreign Trade.
The application for registration in the National Registry of Branch Offices and Agents of Foreign Mercantile Societies is formalised by the interested party or its legal representative, by means of the following documents:
a) A written statement of the reasons for the application, subscribed by a duly authorised person from the mercantile society or an individual businessperson interested in establishing a branch office; Public Notary or the Chamber of Commerce must authenticate signature.
b) A simple copy of the foreign mercantile society's constitution and bylaws. In case of an individual businessperson, a document stating that he/she is authorised to act as such in his/her country of origin.
c) A writ or proxy stating the designation and faculties of the natural person who will act as the Branch Office's representative.
The documents referred to in items b and c must be duly legalised in presence of the Cuban Consul at the company's original country, by the ministry of Foreign Affairs of the Republic of Cuba and certified by a Cuban public notary.
d) List of the products or services comprised in the mercantile operations of the society or the individual businessperson that will be the object of commercial operations in the national territory.
e) A Bank Report of the mercantile society or individual businessperson, issued no more than three months previous to the date when the application is filed. It should proceed through a bank of the National Banking System in the Republic of Cuba.
f) The representative's Curriculum Vitae.
g) General information on the productive, technical or services activity carried out by the mercantile society or individual businessperson and the volume of operations during the last five years.
h) Information of the operations carried out in Cuba for the last three years, detailing the products commercialised each year to the Cuban import company and the amount of the operations.
The above-mentioned commercial operations must be vouched for by a letter from the chief authority of the corresponding Cuban bureau or institution, stating the amount of the operations, the products commercialised and the date when commercial relationships with the applicant began. In case the vouching letter is from a company that belongs to the System of the Ministry of Foreign Trade, the director thereof must subscribe it.
Documents written in a foreign language must be accompanied by the corresponding translation into Spanish, with a note certifying that it matches the originals.
It is the faculty of the Ministry of Foreign Trade to authorise, deny, renew, widen or cancel the inscription y means of a founded Resolution.