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Cuba opens foreign investment to the retail and wholesale sector-Andersen

| Publications | Cuban Desk

With this new step, foreign investors will be able to manage the direct marketing of their products in retail and wholesale markets

As part of the economic measures announced by the Cuban authorities to face the challenges of the island's economy, the admission of foreign investment in the retail and wholesale markets has been included. 

The participation of foreign investment in both sectors was not possible to date. This limitation limited the possibility for international brands of different types of products to have been present in the Cuban market, since they always had to access these channels through third-party state-owned companies, which made it difficult to correctly implement their marketing policies, such as those related to pricing, rebates and brand image control. 

With this new step, foreign investors will be able to manage the direct marketing of their products in retail and wholesale markets. In a first stage, foreign investment will only be allowed in the retail sector in the Free Convertible Currency (FCM) market and, in a yet uncertain future, it is also foreseen to extend its participation to the Cuban Peso (CUP) market. Foreign investment in the retail sector will be made only through joint ventures.

In the case of the wholesale market, the objective is that companies with foreign investment be suppliers of raw materials, equipment, inputs and technology (including renewable energies), with the objective that these supplier companies boost and dynamize the non-state and state sectors. Wholesale trade will be accessible to foreign investment in the form of joint ventures and international economic association contracts, although the possibility of including companies with totally foreign capital is not excluded.

In the opening to foreign investment in the retail and wholesale markets, priority will be given to those foreign companies that have been trading with Cuba for many years and that have representations or branches already established on the island.

Investment in both sectors will be carried out under the Foreign Investment Law in force in the country and its complementary regulations.

Likewise, it has been announced that the Cuban government has authorized non-state economic actors (self-employed workers, cooperatives and MSMEs) to directly carry out foreign trade activities.  To this end, these economic actors will be authorized to export and import directly under the control of the Ministry of Foreign Trade and Investment (MINCEX). It is to be imagined that this could be a step prior to the already announced foreign investment in the private sector.

It is also indicated that the power to import to the private sector will be granted to those actors that market their products and services at better prices to the Cuban population. Imports will be restricted to inputs, raw materials, equipment and other products necessary to fulfill their fundamental economic activity. The entities will carry out import activities in accordance with all the requirements and regulations established for state enterprises. 

You can download the full PDF file here.

For more information you may contact with:

Ignacio Aparicio | Partner Corporate / M&A


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