Cuba: Foreign investment will perform in a more transparent economic environment

HAVANA, Cuba, Dec 22 (ACN) Carlos Luis Jorge Méndez, general director of Foreign Investment of Cuba, said that a group of decisions have been taken that favor this activity in Cuba, and will be attractive because the investor will be able to perform in a more transparent economic environment, in which distortions are eliminated.

For those who are operating, for example, in the Mariel Special Development Zone from the financial point of view, there will not be any effects because their accounts will continue in hard currency, he said.

He reminded that there will be expenses in the national economy that will increase prices in a significant proportion of items, among which are those related to raw materials, fuel, energy and expenses in the use of the labor force.
He noted that even so, foreign investment will benefit to the extent that the imported component decreases.

Jorge Méndez highlighted that the stimulation fund for the payment of more than 40 thousand workers employed in the different modalities of Foreign Investment is maintained from profits formed by the company, and will be converted at the exchange rate to be paid in Cuban pesos.

With respect to the distribution of profits, the executive of the Ministry of Foreign Trade and Foreign Investment emphasized that they will also be maintained but in a different manner from this stimulation fund.
For the entities that are outside the ZEDM there is a group of anti-inflationary measures that will affect them; for example, the centralized wholesale prices grow in less proportion than the exchange rate, and that will have a positive effect on their prices and costs and expenses, he said.

Among other anti-inflationary measures, he also mentioned that there is a group of obligations, which have not been able to be paid or retained earnings, which have been decided not to move to dividends, and all this for accounting purposes will be multiplied by 24.

Then the Cuban side will assume the difference for exchange rates when it is necessary to buy foreign currency so that they are not affected by exchange rate mismatches, and the same will happen when they go to pay outstanding accounts abroad.

Jorge Méndez clarified that the foreign entities will not be governed by the prices established by the state but by those set by their board of directors (Cuban and foreign part), although they will be set according to agreements reached with their clients.

On another matter, the director informed that in 2020 29 businesses were constituted, and there is a mechanism approved by the Ministry of Justice so that the act of constitution of mixed companies can be done by videoconference.

The businesses that were born in a 1x1 scenario (monetary change) will have to update their feasibility studies in the new scenario, he said later.
Valued at three billion dollars, 30 businesses are in the preparation phase that must be approved in 2021, and therefore, must redo their technical-economic feasibility study.
Minister Malmierca said that Cuba is aware that even though this year the Trump administration put into operation the Title III to discourage investment, foreign companies continue to trust in our market and in the capacity Cuba has to attend these investments in a prioritized way.