Are you thinking about doing business in Cuba? Do you want to know about the state of the economy in Cuba? Our guide to the economy of Cuba gives you the facts and information you’ll want to know.
The economy of Cuba is centrally planned by the Government of Cuba. The Communist Party of Cuba are responsible for issuing guidelines pertaining to the management of the economy of Cuba, as well as overseeing any new initiatives designed to boost the economy of Cuba.
Foreign investment in the economy of Cuba
The economy of Cuba, which was heavily supported by the Soviet Union, suffered greatly in the early nineties after the fall of the communism in Europe. In a measure to counter the ill effects this had on the economy of Cuba, and to give the economy of Cuba a boost, limited foreign investment into the economy of Cuba was allowed in 1992 for the first time since the revolution in Cuba.
Foreign investment in the economy of Cuba was limited to foreign companies engaging in joint ventures with Cuba. These plans to help the economy of Cuba have been successful to a degree with several big companies from Europe and Latin America investing in the economy of Cuba.
Today, approximately $3 billion of the economy of Cuba can be attributed to foreign investment in the economy of Cuba through joint ventures.
Export Economy in Cuba
In 1996, in a bid to further aid the economy of Cuba through foreign investment, the government of Cuba allowed foreign companies to open businesses that would make no tax contributions to the economy of Cuba provided all goods were for export only.
This attempt at improving the economy of Cuba has remained largely unsuccessful with foreign investors, mainly due to the fact that any goods produced in Cuba would be subject to a US boycott.
Economy and taxation in Cuba
Foreign investment in the economy of Cuba through joint ventures is currently taxed at 30%. Otherwise, the economy of Cuba is tax-free, with no taxes being levied on ordinary workers in Cuba.
Private sector economy in Cuba
In 1993 small scale private sector businesses were allowed for the first time in Cuba in a bid to improve the economy. The private sector in Cuba is limited to family run restaurants, guest houses and small scale retailing and makes little overall contribution to the economy of Cuba.