HAVANA — Cuba on Wednesday published the full text 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.
Havana is betting that the measure will make the country more attractive to the business community. Foreign investment has been flat, including in the years since President Raul Castro began a program of economic reforms.
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 — or about half the current rate.
Such operations will also be exempt from payroll taxes.
However projects funded completely by foreign capital do not automatically qualify for those breaks. They may be granted an exemption by the government, however.
Foreign companies are still required to hire local employees through a Cuban employment agency, something that many who have done business on the island have complained about for years. The law allows investors to work with independent cooperatives but does not establish a mechanism for the same to happen with the small private sector that has been budding under Castro’s reforms.
Officials all the way up to Castro have said that getting more foreign investment is vital if they are to meet their economic goals in the coming years.