[JURIST] Cuba's National Assembly [official website] approved a law on Saturday that provides tax breaks and other incentives to attract foreign investors to grow business in the communist economy of Cuba. The Assembly voted unanimously in a special session to approve the law, which becomes valid within the next 90 days. The new law [Reuters report] reduces the profits tax from 30 to 15 percent and exempts investors from paying that tax for eight years. Many of the incentives are reserved for joint ventures with the Cuban state and investment projects linking foreign companies with Cuban companies. Foreign companies will be able to maintain full ownership in joint ventures, but the incentives have been viewed with skepticism [USA Today report] from many nations. Cuba does not publish economic statistics on foreign direct investment, but economists approximate it to be on the order of several hundred million dollars annually.
The US amended its trade embargo [CFR backgrounder] to allow US companies to export food and agricultural products to Cuba, but Cuba is largely cut off from US investment. However, experts have argued the six-years of leadership under Raul Castro [BBC profile] has changed the structure of the Cuban economy. In 2011 Cuba enacted a 300-point overhaul of its domestic economy to spur private enterprise. Last November US President Barack Obama announced support for creative and thoughtful [The Hill report] consideration regarding future relations with Cuba.