Doing Business with Cuba

1,514 views
1,438 views

Published on

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,514
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
51
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Doing Business with Cuba

  1. 1. DOING BUSINESS WITH CUBA May 2007 Caribbean Export Development Agency P.O.Box 34B, Brittons Hill St. Michael BARBADOS Tel: 246-436-0578; Fax: 246-436-9999 E-mail: info@carib-export.com Website: www.carib-export.com
  2. 2. DOING BUSINESS WITH CUBA TABLE OF CONTENTS1. GENERAL INFORMATION..................................................................................... 32. THE ECONOMY........................................................................................................ 6 2.1 Structure of the Cuban Economy........................................................................ 6 2.2 Recent Economic Performance........................................................................... 8 2.3 Economic Outlook .............................................................................................. 9 2.4 Overview of Trade .............................................................................................. 93. GENERAL MARKETING FACTORS.................................................................... 11 3.1 Distribution and Sales Channels ....................................................................... 11 3.2 Use of Agents and Distributors......................................................................... 11 3.3 Payment Conditions .......................................................................................... 11 3.4 Transportation ................................................................................................... 124. MARKET ACCESS ISSUES ................................................................................... 13 4.1 Customs Tariff .................................................................................................. 13 4.2 Non-Tariff Barriers ........................................................................................... 14 4.3 Labelling and Marking Requirements .............................................................. 14 4.4 Laws on Patents, Trademarks and Copyright ................................................... 15 4.5 Documentary Requirements.............................................................................. 155. INVESTMENT POLICY.......................................................................................... 16 5.1 Export Processing Zones................................................................................... 16 5.2 Cuba – Caribbean Relations.............................................................................. 166. CULTURAL PRACTICES....................................................................................... 18 6.1 Business Customs ............................................................................................. 18 6.2 Entry Requirements .......................................................................................... 18 2
  3. 3. DOING BUSINESS WITH CUBA This former Spanish ruled island1. GENERAL INFORMATION attained its independence in 1898.Official Name: Cuba Population: With a population of over 11 million people, Cuba is one of theArea: 110 860 square most populous islands of the Caribbean.kilometers (44 210 square miles). In terms of ethnicity, about 51 percent of the Cuban population is mulatto, 37Capital: Havana percent is white, 11 percent black andOther Cities: Santiago de Cuba, one percent Chinese.Camagüey, Santa Clara, Holguin,Guantanamo, Matanzas, Pinar del Rio. At least 70 percent of the population lives in urban areas and the other 30Population: 11 million percent is located in the rural areas of the country. The official language isOfficial Language: Spanish Spanish.Life Expectancy: 77 years Education: Considered one of the key successes of the Cuban Revolution,Workforce: 4.7 million. Cuba prides itself on its attainment in this field. The Government spendsGDP Per Capita: US$3 300. enormous sums of money on education and the results have been significant.Currencies: Convertible pesos, Cuban Education is compulsory and free forPeso. children aged six years to 14 years. Higher education, including universityExchange Rate: US $1 = 0.90 education, is tied to the country’sConvertible Peso. economic and social agenda. It is based on technology, agriculture, tourism,Geography: Cuba is located 90 miles medicine, research, and teacher training.south of Florida. Its geographic position At 97 percent, Cuba has one of theis 21 ‘30N, 80 00W. The island lies east highest literacy rate in the Westernof the Yucatan Peninsula and in one of Hemisphere. Several Caribbean studentsthe busiest shipping lanes for ships are presently enrolled at Cubanleaving the Panama Canal for the ports universities.in North America and Europe. Health: Like Education, theWith a land space of 4 420 square miles Cuban Government allocates enormous(110 860 square kilometers), Cuba is the resources annually to the health sector.largest island in the Caribbean. It is for This area of the Cuban economy isthe most part flat with gently rolling hills another success of the Revolution. Thereand wide fertile plains. The Sierra are approximately 300 hospitals, moreMountain range reaches a height of 6 than 16 000 alternate medical care500 feet. institutions, close to 100 000 beds, 100 3
  4. 4. DOING BUSINESS WITH CUBA000 doctors and a similar number of imposed an embargo which not onlynurses. Social welfare benefits are prevents Americans from trading andprovided for all categories of illnesses, travelling to the island, but frowns ondisability and unemployment. Cuban countries which have been doing so.trained doctors are presently working in From time to time the United States hada number of countries in the Caribbean, tightened the embargo and has gone soand expertise is provided in a number of far by implementing what is known asareas. Life expectancy in Cuba is 77 the Helms Burton Act which threatens toyears. sanction countries doing business with Cuba.Climate: The climate in Cuba issimilar to that of the Eastern Caribbean Airports: The country has 11islands. The rainy season is from May to airports. The Jose Marti InternationalOctober. The island lies in the path of Airport in Havana is the main one.hurricanes and during the rainy season Others with international air links areespecially from June, the island is located at Camaguey, Ciego de Avila,subjected to hurricane activity. The dry Cienfuegos, Matanzas, Santiago de Cubaseason is from November to April. and Varadero.Religion: The majority of Cubans Air services come mainly from Europe,are Catholic. There is in Cuba an Canada, Central and South America,umbrella church body, the Cuban Mexico and from the Caribbean viaCouncil of Churches which embraces 22 Jamaica.denominations including Presbyterians,Episcopalians and Methodists. However, Among the airlines servicing Cuba areanother 31 officially recognized Iberia, Air Jamaica, Air Canada, Virgindenominations include Jehovah Atlantic, Aeroflot, Lufthansa, Martinair,Witnesses and the small Jewish ALM-KLM and Cubana. Some smallerCommunity, are not members of the private airlines operate regular servicesCCC. into the country. Cubana also operates internal flights in Cuba.Political System: Cuba is aCommunist country. That system was Telecommunications:installed following the 1959 Revolution Telecommunications are not aswhich brought Dr. Fidel Castro Ruz to developed. Telephone line density is lowpower. He has ruled Cuba since then, at 10 per 100 inhabitants. The countryuntil he became ill in 2006. The country has under 900 000 telephone subscribers,is a one party state with the Cuban or 7.50 per 100 inhabitants, based onCommunist Party being the only one of information from the Internationalsignificance. The country is divided into Telecommunications Union.14 provinces, including the City of However, upgrades are taking place. AnHavana and one special municipality, Italian firm has completed a nationalIsle of Youth. fibre-optic system to enhance both tele- density and coverage.Cuba has had a tempestuous relationshipwith the United States. The USA has 4
  5. 5. DOING BUSINESS WITH CUBAWeights and Measures: According tothe Cuba Chamber of Commerce,decimal metric system for Weights andmeasure is used in the country. Liquidsare measured in litres.Electric currents: The most widelyused is the single phase 110/60 hertz. Inhotels there is usually the 220vconnection. Points must be flat.Public Holidays in CubaJanuary 1 Liberation DayJanuary 2 Victory of the Armed ForcesMay 1 International Workers DayJuly 25 Eve of revolution DayJuly 26 Anniversary of the Moncada Barracks Attack DayJuly 27 Revolution DayOctober 10 Commencement of Wars of IndependenceDecember 10 Independence DayDecember 25 Christmas Day 5
  6. 6. DOING BUSINESS WITH CUBA Cuba is still a major producer of sugar, and it exports the commodity to some2. THE ECONOMY markets in Europe and to China. It is involved in a deal with Venezuela where Cuban sugar is exchanged for oil from2.1 Structure of the Cuban that country. Nonetheless, the CubanEconomy government is looking to attract foreign investment in the sugar industry in an2.1.1 Tourism attempt to lift production.Tourism is the major sector in the Cuban 2.1.3 Nickeleconomy. This came about after thecountry was forced to restructure its Production is on the increase. Alongeconomy following the collapse of the with tourism, nickel output has boostSoviet Union and the dismantling of economic growth to around 11 percentCommunism both of which impacted and 12 percent respectively in 2005 andnegatively on the economy. Previously in 2006. Venezuela and China havedominated by sugar, the economy was invested heavily in this segment of theopened up to foreign investment. Among Cuban economy and Cuba is now thethe investors were a number of hotel world’s fifth largest producer of nickelcompanies which entered joint venture and cobalt.arrangements with the Government toconstruct hotels. Today Cuba welcomes 2.1.4 Manufacturingin excess of two million visitors andtourism accounts for over 60 percent of This is another segment of the CubanGross Domestic Product. The majority economy which has contributed to theof visitors to the island originate from economic recovery following theCanada, followed Mexico, Europe difficult years of the early 1990s. The(mainly Spain), Latin America and the production of food and beverage,Caribbean. chemicals, cement, tobacco, clothing and textiles, and pharmaceuticals, are some2.1.2 Agriculture of the principal goods manufactured by the Caribbean island. The country hasThis sector was the mainstay of the also been exporting these items toeconomy for over 30 years following the markets in Europe, Canada, LatinCuban revolution of 1959. The principal America and China.agricultural activity was sugarproduction as Cuba had a guaranteed 2.1.5 Constructionmarket in Eastern Europe for sugar, themain export outlet for the commodity. Construction activity in Cuba continuesHowever, with the loss of Eastern to be robust, according to the 2006Europe following the political changes Economic Report as outlined by thewhich resulted in those countries Government. Foreign investment in theattaining their independence from the tourism sector has meant a wave of newSoviet Union, the industry experienced hotel construction to boost the island’sdeclines. Although production is lower, hotel room stock. In early 2007 the 6
  7. 7. DOING BUSINESS WITH CUBACuban Government revealed plans for Estimates suggest that while the industryimprovements to the country’s airport saves the country in excess of US$60infrastructure that would benefit the million in imports annually, it alsotourism industry. With capital inflows maximizes earnings through the exportfrom China and Venezuela, the Cuban of medicines and prescription drugs togovernment has also undertaken a major about 30 countries, including some inprogrammeme to build between 250 000 Latin America. Research is also takingto 300 000 houses as part of the housing place to produce new pharmaceuticalsdevelopment programmeme in the products for the export market.country. This activity which is expectedto last three years (2005 – 2007) will addmore buoyancy to construction activity Table 1. Sectoral Contribution to GDP inwhose contribution to GDP is around 2006seven percent. Sector %2.1.6 Oil Tourism 67 Manufacturing 15The oil industry in Cuba is expanding. Construction 7Previously, Cuba had received its oil Agriculture and Fisheries 5supplies from the then Soviet Union atconcessionary prices. However, this was Mining 1.5subsequently suspended in the early1990s when the Soviet Union was 2.1.8 Bankingdisintegrated. The Central Bank of Cuba is at the apexThis had disastrous effects on the of the banking system in the country.Caribbean island. With energy shortages, First established in 1948 as the Nationalelectricity was rationed, industrial output Bank of Cuba, this institution wasdeclined, public transportation was reorganized on at least four occasions,disrupted and there constant blackouts in the last being in 1997 when it becamethe country. The Government the Central Bank. Its President is asubsequently looked for ways to member of the Council of Ministers ofstimulate the oil industry by inviting Cuba.foreign investment in the sector. Thishas paid dividends While Venezuela is The financial system is made up of eightnow the main supplier, the domestic commercial banks, an investment bank,industry is presently supplying 20 and non-bank financial institutions. Thepercent of local requirements. Havana Investment Bank is registered in London. There are no stock exchanges.2.1.7 Pharmaceutical The Cuban Central Bank performsThe Pharmaceutical industry in Cuba traditional central banking operations –continues to make strides. issuing currencies, managing theBiotechnology and indigenous financial system and the economy,technologies are the main areas driving specifying monetary policy, and actingthis area of the Cuban economy. as lender of last resort. Because of the American economic embargo the Central 7
  8. 8. DOING BUSINESS WITH CUBABank has been very vigilant in 2.2.1 Prices and Incomemaintaining the stability of the Cubancurrency to ensure there are no economic Consumer prices as measured by theshocks. Retail price Index have been fluctuating in Cuba. From seven percent in 2003,2.1.9 Exchange Rate the inflation rate declined in the two following years, before increasing inCuba has two currencies in circulation: 2006. However, prices are projected tothe Cuban Peso (CUP) and the moderate in 2007 to about five percent.convertible Peso. In April 2005 the Inflation in Cuba is determined by theofficial exchange rate was adjusted from price fluctuation in both the market ofUS$1 per CUP to US$1.08 to CUP, both the Cuban Peso and the official marketfor individuals and enterprises. Cuba of convertible pesos.levies a 10 percent charge on eachconversion of US dollars to CUP. Table 3. Consumer Price VariationCuban peso is used by government wageearners for subsidized goods and %services, while the convertible peso is 2003 7.1used for the purchase of consumer goods 2004 4.1not available in peso stores or in the 2005 3.1government ration. The Cuban peso is 2006 7.0tied to several major foreign currencies,including the Euro, initially making for 2007 5.0an eight percent revaluation. 2.2.2 Employment2.2 Recent Economic Performance The Cuban Labour Market displays certain characteristics. Of a population2.2.1 Economic Indicators (2006) of 11 million people, the Cuban workforce is estimated at around sixNational currency: Peso. Exchange rate million. Labour costs are low whenUS$1 = 0.93 peso compared to other hemispheric countries. In 2003 the InternationalTable 2 Balance of Payments Labour Organization (ILO) estimated Cubans were earning at least 234 pesos aBalance of Payment month. However, wages of public sectorGross Domestic Product 36.2 billion employees and those with universityExports 2.0 billion degrees were increased in 2005, as wereImports 7.5 billion retirement and social pensions, and theGDP per capita 3300 minimum wages. hundredInflation Rate 5.0 % The point must be made though that Cuban workers receive free health care and education from the Government, and pay nor more than 10 percent of their 8
  9. 9. DOING BUSINESS WITH CUBAincomes for housing. Furthermore, all calling on their Government to end theCubans are entitled to a subsidized economic embargo on Cuba, given thatmonthly food rations. European, Asian, and Latin American and Caribbean firms and individuals, areAnother characteristic is that the Cuban doing business with Cuba.labour force is well educated therebycreating a pool of trained workers for the The EIU said that the Cuban Centralmarket. Bank will maintain fiscal and monetary discipline although liberalization willIn addition, under a 1993 Labour Law, slow GDP growth. However, it expectsthe Cuban government adopted a policy that investments will drive overallof distributing employment by industry growth, supported by rising householdand occupation. This policy by the operations; infrastructure andGovernment means that foreign firms manufacturing which it is anticipatedoperating in the country are required to will expand, along with some recoveryhire their labour through a state agency. in agriculture. The current account willOne drawback from this system is that it show a small deficit.limits the freedom of firms to choosetheir own workers. Table 5 Economic Outlook 2006 2007 2008Table 4 2006 Labour Force by Economic Real GDP Growth (%) 11.1 7.10 5.7Sector Consumer Price Inflation 6.7 3.6 4.1 Budget Balance (% of GDP) -3.8 -3.2 -2.4 Sector % Exchange Rate (US $ : Euro) .93 .93 .90 Agriculture 20 Industry 19.4 Source:EIU Services 60 Total Unemployment 1.9 2.4 Overview of Trade2.3 Economic Outlook 2.4.1 ExportsThe Economist Intelligence Unit (EIU) Cuba has intensified its exports of goodsanticipates that Cuba’s economic future and services.will be shaped by the successor to Fidel Cuba’s main exports are servicesCastro. The President who is still (mainly tourism), sugar, tobacco, nickel,recuperating from an illness he suffered medical products, citrus fruits andin 2006 has shaped Cuba over the last 47 coffee. Exports totaled US$2.5 Billion inyears. His brother Raul Castro is acting 2005, and US$2.8 Billion the followingas President. year. Main export markets are the Netherlands, Canada, Venezuela, Spain,However, analysts suggest that a post China, Russia and France. The countryFidel Castro Cuba will most likely make exports as well to Latin America and theup with the United States. Several CaribbeanAmerican businessmen have been 9
  10. 10. DOING BUSINESS WITH CUBA 2.1.4 Imports approximately EC$48 billion, a trade surplus in excess of EC$130 billion. Petroleum and food account for the majority of imports into Cuba. They were estimated at US$2 Billion in 2002. However, by the end of 2006 the value of both items imported into Cuba was US$4 Billion. The main imported food items include corn, rice, and beans. Petroleum, machinery and chemicals also account for a fair share of imports to the island. Main suppliers are Venezuela, China, Spain, USA, Canada, Brazil, Germany, Italy and Mexico. Imports are handled by Alimport, a state agency. Table 6 Cuba’s 2006 Energy ImportsPRODUCT VOLUM UNIT TOTAL VALUE E VALUE ($) (US$)LPG 790 225 101.38 79 812 000Gasolene 281 780 182.58 51 289 000Jet Kero 1 401 182.58 269 184 000 965Diesel 7 638 180.82 1 383 000 000 355Fuel Oil 4 706 106.34 498 836 000 310Crude Oil 19 423 57.37 1 107 115 000 110TOTAL 3 389 227 000MARKETVALUESource: 2006 Oficina Nacional de Estadisticas de Cuba. 2.5 Cuba’s Trade with CARICOM In 2005, Cuba’s domestic exports to CARICOM were in excess of EC$178 billion, while imports were 10
  11. 11. DOING BUSINESS WITH CUBA bodies, there are some small private3. GENERAL MARKETING farmers who retail food in Cuba. SomeFACTORS of these are based in the underground economy.3.1 Distribution and SalesChannels 3.2 Use of Agents and DistributorsOver last decade or so the Cuban Goods can be imported into Cuba onlyGovernment has been pursuing policies by state entities and by joint ventureto improve the import and distribution operations holding permits for thenetworks in the country. Retail specific goods in question. While agentsoperations are run by agencies set up as and intermediaries handle goods oncorporations by the government, by consignment for licensed importers, theyforeign corporations (in partnership with cannot import on their own accord andthe Government) or by individuals under neither can they conduct distributionstrict licensing and leasing agreement. operations. Joint ventures with foreignBuying and distribution decisions are participation will generally obtain theirmade at central headquarters, although import permits through their Cubanstore and department managers are partners. However, the right to importhaving inputs into the process. specific categories of products may be included in negotiations when seekingState-owned companies which are approval for the joint venture.involved in the importation of goods arenot permitted to advertise products andservices. There are showrooms and 3.3 Payment Conditionswarehouses located in specific places inthe country. Foreign companies are expected to establish a substantial trade relationship3.1.1 Wholesale Food Distribution with Cuba for at least three years before being allowed to set up a presence in theThe Cuban Government attaches island. For this reason, consignmentconsiderable importance to the food sales have been gaining in popularity.distribution network system in the Goods can be shipped to Cuba undercountry. As such it has undertaken a consignment provided that they aremajor overhaul of the system by covered by a contract for sales ofstrengthening wholesale and retail and merchandise imported as consignment.storage capacity and refrigerated Consignment contracts have to stipulatefacilities. It has taken control of the that the consignee holds title to thesystem. goods, which the consignee must sell on behalf of the consignor according title to3.1.2 Retail Food Distribution the goods, which the consignee must sell on behalf of the consignor according toState agencies have been established to the terms set out in the contract. Theretail food. Part of the reorganization consignee must pay for the goods at theprocess was linking state farms to time they are sold.cooperatives in the province of Havanaand to produce markets. Apart from state 11
  12. 12. DOING BUSINESS WITH CUBA3.4 TransportationA good network of roads, railroads andair and sea transportation are keyfeatures of Cuba’s infrastructure. Severalports abound handling tons of export andimport cargo. Cuba lies in a majorshipping lane especially for shipsleaving the Panama Canal and destinefor North America and Europe.However, again because of the Americanembargo ships destining for USA portsare not allowed to make calls at Cubanports.Apart from oil imports from Trinidadand Tobago, sea transport links withCARICOM are not as fully developed aswith some other ports in CentralAmerica.Nonetheless, Havana, the Cuban capitaland the largest town in the country,accounts for just over half of all cargovessels calling at the island. Other majorports are Mariel (Free Trade Zone),Matanzas, Nipe, Nuevitas and Santiagode Cuba. 12
  13. 13. DOING BUSINESS WITH CUBA Joint ventures with foreign participation4. MARKET ACCESS ISSUES will generally obtain their import permits through their Cuban partners. But the right to import specific4.1 Customs Tariff categories of products may be included in negotiations when seeking approval of4.1.1 General Import Policy the joint venture arrangement.Cuba has gradually opened up its 4.1.3 Taxationeconomy to trade in the face of aneconomic embargo the United States has Cuba has an income tax rate of 50imposed on the island. The country is percent and a corporate tax rate of 35not part of the several hemispheric percent. The corporate tax rate is leviedintegration movements like the on branches in the same way as otherCaribbean Community, Central companies. The rate of the progressiveAmerican Common Market, Latin income tax varies from 10 percent (forAmerican Integration Association and those earning less than US$6 000) to 50the Free Trade Area of the Americas. percent (for those earning more). WhileThere are therefore strict rules which there is no value added tax in Cuba thereguide the country’s import policy. To is a tax on sales with the rate varyingtrade with Cuba exporters must have two according to the nature of the products.licenses: a travel license and an The state has both land taxes andexporting license. property transfer taxes.Cuba’s tariff regime is outlined in Conversions between the US dollar andDecree Law 124 of 1990. Decree Law the Cuban convertible peso are subject to162 of 1996 sets out the functions and a 10 percent tax. The fiscal year runsoperations of the Custom system. from January 1, to December 31.According to the World Bank, Cuba’sweighted average tariff rate was 9.4 4.1.4 Import Dutiespercent, up from 8.2 percent. It should be noted that Cuba uses the4.1.2 Import Permits nomenclature of the harmonized system up to eight digits. The simple averageGoods can be imported into Cuba only tariff on about 5 400 commodities wasby state entities and by joint venture lowered from 11.5 percent to 10.4operations holding permits for the percent for Most Favoured Nationspecific goods in question. (MFN) countries, according to the Ministry of Foreign Trade. TheWhile agents and intermediaries handle maximum MFN tariff is 30 percent.goods on consignment for licensed Cuba applies the MFN rate to goodsimporters, they cannot import on their originating in countries which haveown accord and neither can they conduct bilateral agreements. Non MFN generaldistribution operations. Import permits tariff averages 17.9 percent. Cuba is aare therefore required. member of the Latin American Integration Association and input 13
  14. 14. DOING BUSINESS WITH CUBAclassifications are based on the Since labelling, sanitary andHarmonised Systems at the eight digit phytosanitary and product safetylevel. standard regulations are enforced at the border as a practical matter, the burden4.1.5 Special Provisions of compliance rests with all exporters.Entities with foreign partners may begranted duty free status for some or all 4.2 Non-Tariff Barriersof those products as part of theireconomic association or joint venture 4.2.1 Foreign Exchange Controlsagreement. There are no foreign exchange controlsProvision is there for negotiating other in Cuba. However; from time to timeterms of these agreements. There are as changes are made to the regulations.well negotiations for duty drawback in Effective November 8, 2004, the Cubancircumstances including temporary Government adjusted the laws relating toimportation for upgrading or re-exports foreign exchange controls. Shops andand replacement of materials other businesses are no longer allowed toincorporated in exported products and accept US dollars. Also foreignerschemicals that disappear during the holding US dollars are required to pay aproduction process and not incorporated 10 percent fee for convertible pesos.in the formal product. Previously the convertible pesos were used interchangeably with US dollars.However, of note is the fact that these However, this is no longer the case.drawbacks are granted only when thecircumstances are deemed to be in thenational interest or for commercial 4.3 Labelling and Markingviability in foreign markets. Requirements4.1.6 Special Custom Procedures The National Standards Office in Cuba sets out strict guidelines for labelling allAn approved Cuban Custom Broker products exported into Cuba. Thesemust handle all custom formalities. standards are similar to other countries’Some larger importers arrange to have regulations. The following are thestaff trained and certified and pay a fee guidelines:of US$50 monthly to operate internalagencies. • Specific name of the product(s) • Labels must be in SpanishPrecise documentation and full • Labels must contain ingredientscompliance with all regulations is of productsessential when exporting products to • The expiry date must be citedCuba. • Net Content must be listed • PriceCare is urged because seemingly minordiscrepancies can lead to confiscation of • Quantity of unitsimproperly documented imported goods. 14
  15. 15. DOING BUSINESS WITH CUBAIn addition, all documents must be Biotechnology, information services,originals and translated in Spanish. pharmaceuticals and cultural industries are among the areas that would be vulnerable to infringements outside of4.4 Laws on Patents, Trademarks the island. As Cuba adheres toand Copyright copyrights rules it expects similar behaviour from other states.4.4.1 PatentsIn Cuba the regulations address the issue 4.5 Documentary Requirementsof three patents which have to be appliedfor. These are Patent of Invention, Patent In shipping goods to Cuba exportersof for a complement of Invention, and must have at least two copies of a bill ofpatent for industrial models. Cuba is a laden. Similarly, copies of the Airportmember of the World Intellectual Bill are also required if the goods areProperty Organization and has its own being sent by air. Other documentarybody the Cuban Office of Industrial requirements are Commercial InvoiceProperty. and Packaging List. Full details about the origin of the goods, contents andThe country also subscribes to a number weight must be identified on theof international conventions. documents.4.4.2 TrademarksAll Trademarks and brand namesregistered in Cuba are protected underCuban Laws. Trademark registrationwith the Cuban Office of Trademarksand Patents is voluntary but it is highlyrecommended that exporters shippingproducts to Cuba make every effort toregister their trademarks and brandnames there.4.4.3 CopyrightsCuba is a signatory to many treaties andagreements, including the BerneConvention. Based on this factor theprotection of copyrights and inventionsis enshrined in Cuban laws. A verysignificant factor as well, is the fact thatCuba’s economic policy involvespursuing sectors where research andproduct development must be heavilyguarded against infringement. 15
  16. 16. DOING BUSINESS WITH CUBA Caribbean and even surpassing those of5. INVESTMENT POLICY Panama, the Cuban EPZs are located in Havana, Cienfuegos, and in the BerroaWith the exception of defense, public Valley.health care and education, all othersectors of the Cuban economy are The genesis behind setting up EPZs is toopened to Foreign Direct Investment. attract foreign direct investment and toProvision for FDI is made under the increase exports, cited a United Nationscountry’s Foreign Investment Act of Discussion Paper authored by Larry1993 which outlines broad areas of Willmore. Through Decree Law 165, theinvestment promotion and incentives for Cuban authorities have granted attractiveforeign investors. The areas identified concessions for investors wishing tofor FDI are tourism, manufacturing, participate in the EPZs. Investors arenickel and mining, agriculture, allowed to retain full ownership of theirinformation technology, operations which is different from otherpharmaceuticals, and forms of investments are based on jointtelecommunication. ventures with public enterprises. Investors with plants in the processingThese areas where foreign investment is zones are exempted from Cuban incomebeing invited are among a list outlined tax and taxes on labour utilization for aby the Cuban Ministry of Foreign period of 12 years to be followed by a 50Investment and Economic Cooperation percent exemption for another threeand other official agencies of years.Government. While EPZs are primarily designed toThe aims of the policy are to diversify promote exports Cuba allows somethe economy, moving it away from plants limited sales to the domesticbeing dominated by agriculture, and to market.earn foreign exchange. The country hassigned Bilateral Investment Treaties with Products that incorporate at least 50other countries to promote investment percent Cuban value added are exemptedand to protect investors. There are no from the payment of duty. No otherlimits on repatriating profits by foreign country in the Caribbean Basin offersinvestors and foreign investors are given such incentives for EPZs sales to theprotection and special safeguards. domestic market.Financing is provided at concessionaryrates and joint ventures are also pursued. 5.2 Cuba – Caribbean Relations5.1 Export Processing Zones In 2000 Cuba and CARICOM signed a Trade and Economic CooperationSince 1997 Cuba has in place export Agreement. The agreement which hasprocessing zones. Decree Law 165 since been ratified provides for the dutymakes provision for the EPZs which are free entry in each other’s markets of alocated on approximately 1 250 hectares list of approved goods. In the meantime,of land. Considered the largest in the CARICOM countries have a list of items 16
  17. 17. DOING BUSINESS WITH CUBAthey believe hold good prospects in theCuban market.Table 7 CARICOM Products/ServicesWhich Can Be Exported to Cuba Aluminium Plastic Articles Bread Processed Foods Coffee Putty Condiments Rum Cut Flowers Rum Cakes Fish Sauces Fruits and Vegetables Ships/Boats Ice Cream Tanks Leather Goods Tourism Services Malta Water Heating SystemsSource: Barbados InvestmentDevelopment CorporationCARICOM countries are undertakingbusiness and trade missions to Cuba tosecure trade and investmentopportunities.The Jamaican Hotel Chains, Super Clubsand Sandals have hotels in Cuba, whileTrinidad and Tobago exports mainly oiland other energy based products toCuba. In September 200t that countryopened a Trade Center in Cuba to furthersolidify its commercial relations there.Barbados has mounted a trade mission toCuba and has signed a double taxationagreement with the island. 17
  18. 18. DOING BUSINESS WITH CUBA6. CULTURAL PRACTICES6.1 Business CustomsGovernment: 8.30 a.m. to 12.30 p.m;1.30 p.m. to 5.30 p.m. (Monday toFriday); 8.30 a.m. to 12 noon(alternative Saturdays)National Bank: 8.30 a.m to 12noon; 1.30 p.m. to 3 p.m (Monday toFriday); 8.30 a.m. to 10.30 a.m.(Saturday).6.2 Entry RequirementsAll travellers to Cuba must possess avalid passport, a return ticket and a visaor tourist visa. Tourist visas are issuedby the ticketing airline or travel agents.In a worse case scenario they can usuallybe bought on the spot upon clearingCustoms. Visas cost between CUC $25and CUC $35, depending upon theissuing agent. They are good for up to 90days, although Custom agents willsometimes issue them for 30 days. Otherrequirements are needed for the USAand other countries. For instance,CARICOM citizens travelling to Cubado not require a visa for vacation trips. Atourist visa may be required. Businesstravelers need a Business Visa. 18
  19. 19. DOING BUSINESS WITH CUBAAPPENDIX MEDIA IN CUBAADDRESSES Newspapers • AdelantaGovernment Regulating Agencies • AhoraMinisterio de Salud Publica • GuerrilleroCall 23, No 201 entre M y N Vedado • GranmaPlazo Revolucion • Juvenlud RebeldeHabana, Cuba CP 10400 • Nueva Prensa Cubana • TrabajadoresInstitute of Natrition and Food Safety • VanguardiaInfanta No. 1158 entre Linas y ClavelCentro de La Habana RadioHabana, Cuba CP 10300Tel: 011 (537) 78-1429, 78-5919, 70- • Radio Rebelde0183 • Radio RelojNational Standards Office • Radio Habana CubaCalle E No.261 entre 11 y 13Vedado – La Habana, News AgenciesTel: 011 (537) 30-0022, 30 0835, 30-0825. • Agencia de Informacion NacionalCenter for Investment Promotion of • Prensa LatinaCubaCalle Ira Entre 22 y 24MiramarCuidad de La HabanaTel:537 702-3873.Center for Export Promotion of CubaVedado,Cuidad de La HabanaTel:537 55-0428/55 – 460Ministry of Foreign Trade (MINCEX)Infanta No. 16 esq.a 23Vedado Cuidad de La HabanaTel:537 – 54-3237/38.Mariel Free ZoneCarretera de Quiebra HachaVista del MarPeninsula de Langosta MarielCuidad de La HabanaTel:537-33-5924/063-98201. 19

×