Cuba Opens Up: National Assembly Passes Law Allowing Foreign Capital To Enter Country
After half a century of being shuttered behind a state-run economy and United States imposed trade embargo, Cuba has begun to open its economy to foreign investment. Although the trade embargo remains in effect, the new law will allow much needed foreign money to come into the country and allow for private business ventures to flourish. Some remain skeptical if the Communist government of the island nation's intentions are real or not.
On Saturday Cuba's National Assembly passed a law that will allow for foreign capital to enter the country. Reuters reports that the Assembly met for a special session to vote on the new law, which would go into effect within 90 days. To attract foreign investment, the new law halves the profits tax from 30 to 15 percent and exempts investors from paying it for eight years.
Minister for trade and foreign investment Rodrigo Malmierca said on state television that Cuba needs to attract an estimated 2 to 2.5 billion dollars from investors, according to Reuters. "If the economy does not grow at levels around 7 percent ... we are not going to be able to develop," Malmierca said.
Though the new law may help propel the country forward economically, many obstacles remain in its way, primarily the United States' trade embargo. According to the BBC, Cuba remains labeled as a "State Sponsor of Terrorism" and the trade embargo forbids Americans and companies with U.S. interests from doing business with the island.
Yet, Cuba will continue to push forward. BBC reports that the Mariel Special Development Zone will be inaugurated soon, which will offer greater tax breaks for foreign investors and will have its own port. In attempts to alleviate the economic situation in Cuba, the government loosened its restrictions on allowing citizens to partake in private enterprises. Although it has helped, it is not enough to salvage their economy.
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