Economic and Business in cuban Review 2006 - Foreign Investment Still in demand?

While many foreign companies have recently left Cuba, total investment has increased as a few major investors have made significant new investments Foreign Investment Still in demand

Recent changes in regulations effecting foreign investment (I)Restructuring of free trade zones The closure of the free trade zones meant that many foreign representation offices who were registered and operated there lost their legal status and were forced to change premises and either apply for a full license at the Chamber of Commerce or to leave the country. (II)Increasing Central Bank controls The different resolutions are fully detailed in the article on the banking system. Other than the revaluation (which increased expenses in Cuba) although there was no pejorative effect per se of these resolutions, transitional problems were experienced and uncertainty increased regarding future currency changes. (III)Tougher negotiating position It is noticeable that very few new agreements have been signed with European or Canadian entities in recent years. A certain toughening of negotiating positions from representatives of state-owned companies has also been commented upon in various industries, as well as a greater enforcement of existing rules especially regarding compensation. (IV)Taxation - Personal & Corporate There have been increasing indications that exemptions from tax for certain representation offices may be withdrawn
	There has seen a significant restructuring of the economic landscape for foreign investment over recent years.
Statistics of Foreign Involvement At the end of 2005 there were 258 joint ventures (JVs) and 115 co-operative production contracts operating in Cuba, representing a fall from 313 and 133 respectively at the close of 2004. There were 402 JVs registered at the end of 2002. Despite this fall in the total number of JVs export earnings from those remaining actually increased during both 2004 and 2005.

INDUSTRIES that have shown the strongest growth over the past decade (such as oil, electricity generation, telecommunications, citrus, tobacco, nickel and tourism) have had a strong presence of foreign investment, and five of the ten enterprises that account for almost 80% of total exports are either joint ventures or contracts for cooperative production.' EIU, May 2004

Business Week (August 6, 2001) ranked the top 100 global brands and stated that of these 64% were available in Cuba. Of the 50 companies compiled by PwC for the 2001 Annual list of the 'World's Most Respected Companies Survey', 34 were found to have or have had a presence in Cuba since 1995.

The regulatory process can be considered both bureaucratic and time consuming the process is flexible to some extent, especially to businesses which have a business plan of particular interest to their Cuban partner. 'Cuba - A Guide for Canadian Business March 2001, Canadian Embassy of Havana.