New Foreign Investment Forms

As a result of the dynamics of this process in Cuba in the last few years, new forms of foreign investment have been approved involving different sectors and branches of the economy.  They are, indeed, more expedite and flexible contractual forms that bring about favorable economic results for each contracting party.  These new forms include:  Cooperated Production Contract (goods and services) and Hotel or Production Management Contract.  

Cooperated Production Contract (goods or services): 

Partnering between one or more local parties with one or more foreign parties tocarry out  joint production and/or service rendering activities.

Foreign partner should provide material or financial resources, technology or market for products or services under the contract.  Profit splitting shall be established for each concept during the negotiation process. 

Marketing (internal and external) of goods shall be done independently by the parties. It does not include profit splitting among the parties.

The approval is granted by the Head of the Central State Administration Agency to which the local entity that signs the contract is attached.

Hotel or Production Management Contract:  

Under this contract, a Cuban legal person grants to a foreign legal person the management of a facility during a given period of time in turn for a remuneration  which is conditioned to the economic efficiency and results of the entity.

The foreign partner is to contribute know-how, technology or market (based on his/its industrial or commercial experience in the activity).

The hotel management contract are approved by  the Ministry of Tourism.     Management contracts for productive activities are approved by  the Ministry for Foreign Investment and Economic Cooperation. 

Taxes, fiscal rates and contributions generated by the  implementation of such new forms of foreign investment shall be borne separately by  each of the parties according to their respective obligations.  Required imports for development of the activities under this contract, as well as the customs duties shall be borne by the Cuban entity that is a party to the contract.