Cuba looking to attract foreign investment with new law

Cuba's national assembly unanimously passed a new law aimed at attracting foreign direct investment, reported regional news site Infolatam.

The new foreign investment law, which enters into force within 90 days, halves profit tax to 15% from 30% and exempts investors from paying the tax for eight years, according to international press reports.

It also allows foreign investment in all sectors except health, education and the military.

It is hoped that this new law, which updates previous legislation from 1995 which opened Cuba up to foreign investment, will lead to the diversification and expansion of export markets, access to advanced technologies and the substitution of imports.

Foreign trade minister Rodrigo Malmierca, when presenting the bill to parliament, sought to reassure potential investors by emphasizing that their rights would be respected in terms of legal protection for their investments and the right to take potential earnings out of the country.

Malmierca said Cuba needs over US$2bn a year in foreign direct investment for the country to hit its economic growth target of 7% a year.

The country is currently cut off from US investment due to a 50-year-old trade embargo put in place by its large neighbor to the north.