Foreign investments in Cuba are regulated by the Foreign Investment Act from 2014. The types of companies in Cuba are:
- The joint Venture (JV);
- The International Economic Association Contract (IEAC);
- The Full Ownership Business.
Our lawyers in Cuba can advise you on how to open any of this types of companies in this country.
Joint Venture Company in Cuba (JV) in Cuba
The joint venture company (JV) is the most common type of company in Cuba. It represents a company opened in Cuba with minimum one local partner and at least one foreign investor. A JV company has limited liability and registered shares. Primacy is offered to JV companies in which the Cuban partner owns 51% of the shares, although it is possible to form other shareholding percentages. The management of JV companies is generally overseen by a board of directors consisting of members named by each shareholder according to the shareholdings. Most of the times it is possible to approve that certain positions in the upper management will be occupied by foreign managers named by the foreign investor.
International Economic Association Contract (IEAC) in Cuba
The second most common type of company that can be set up in Cuba according to the Foreign Investment Act is the international economic association contract (IEAC), which represents an unincorporated partnership founded by contract between two or more Cuban partners and foreign investors.
An IEAC establishes the mutual goals and the particular rights and obligations of all parties regarding the common activities which will be carried out, however it does not establish a separate legal body, each partner continuing to act always in his or her own name. Our attorneys in Cuba can provide you more information on this type of investment.
Full Ownership Business in Cuba
In a full ownership company, the foreign investor manages the business by himself/herself, being responsible for all the obligations enforced by the governmental approval that authorizes the activities of the company.
A full ownership company can be established in one of the following entities:
• An individual person who acts in his/her own name;
• A share company integrated under the Cuban legislation which is owned entirely by a foreign investor;
• A branch office of a foreign business.
It is important to know that the corporate tax rates in accordance with the Law 118 do not apply to these types of companies in Cuba, which have to abide by regular (higher) taxation.
Our Cuban lawyers specialize in helping foreign investors open companies in Cuba. If you need to know more, please contact us.