Cuba to welcome more foreign investors as new law comes into effect

A new law for foreign investment has come into effect in Cuba, with the aim of attracting more investment from abroad to inject life into the country's slow-growing economy.

The law was approved by the national assembly in March and marks the socialist nation's biggest effort to date to open up the economy to foreign direct investment (FDI).

Under the law, foreign firms are now allowed to invest in all areas of the Cuban economy except for the health, education and military sectors. It also offers international investors tax breaks and stronger legal protection than in the past, the country's state news agency ACN reported.

It is hoped that the new law, which updates the 1995 legislation that first opened Cuba up to foreign investment, will lead to faster economic growth, job creation, a greater diversification of the Cuban economy and the transfer of more advanced technology to the island.

Foreign trade minister Rodrigo Malmierca said when presenting the bill to the national assembly that Cuba needed over US$2bn a year in FDI for the country to attain its GDP growth target of 7% a year.

As part of its efforts to attract more FDI, the Cuban government recently invited a large number of foreign business executives and investors to take part in its first international industrial convention, called Cubaindustria 2014.

Some 400 businesspeople from 29 countries reportedly attended the event last week, at which debates were held on the transfer of technology, innovation and technological management, among other topics.

On Friday, Cuba and Spain also signed an association agreement for international cooperation for development.

This took place during a visit to Spain by a Cuban delegation promoting the new foreign investment law among Spanish companies and investors.