THE primary legislation governing Foreign Direct Investment (FDI) in Cuba is The Foreign Investment Act (Law 77). This establishes various legal form swhich companies may take in order to establish operations within Cuba. It also includes guarantees for foreign investors against unreasonable expropriation and establishes the right to repatriate profits.

In order to produce / provide goods or services in Cuba it is *generally necessary to form a joint venture with a Cuban enterprise. The process associated with this is generally considered relatively time consuming, requiring multiple authorizations from different government agencies.

Companies which are focused on selling goods or services fromo verseas to Cuban entities can establish a representation office if they meet the necessary conditions (see above). Without an established representation office there are practical and legal restrictions on any infrastructure which may be established orpersonnel hired.

Overseas businesses cannot directly hire or pay Cuban workers. They must obtain labour services through a Cuban State employment agency. Practically this means the employee will receive a wage in national currency (for example CUP 700 per month) while the employment agency will charge the foreign company (in this example CUC 700-1,400) in hard currency for that employee. The exact amount to be paid to the agency will depend on the experience of the person concerned and the particular industry involved.

The Cuban Constitution does not permit the sale of land. Cubans who want to move house must organize a housing swap. No cash is legally allowed to be included. There exist strong penalties to enforce this.

Joint ventures which have a land component (ie the land on which a factory / hotel / mine operates), will generally obtain the right to use the land for a period of time concurrent with that of the JV (typically for a period of 25 years with an extension possible if certain conditions are met).

* Financial services and investment funds have largely been exempted from the requirement to have a local partner