Introduction
Cuba is drawing in foreign financial backers due to its exceptional monetary scene. The nation's sluggish market progression and a continuously better speculation climate drive this premium. Setting up a business in Cuba needs exploring an obviously settled legitimate system that guarantees solid security for property freedoms and ventures.
This article gives an itemized manual for the organization enlistment process in Cuba, intended to offer functional guidance for both consolidating and maintaining a business. It will address key viewpoints, for instance, picking a right sort of organization, meeting enrollment necessities, and overseeing post-enlistment obligations.
Economic Overview and Business Environment in Cuba
Foreign investment is fundamental for Cuba's financial turn of events, especially in updating frame and propelling key domains like the travel industry, biotechnology, and agro-industry. Recognizing this, the Cuban government has been effectively improving the speculation environment as of recent times. These endeavors have brought about changes pointed toward bringing down managerial obstacles and smoothing out the organization enrollment process in Cuba. This commitment to financial receptiveness supports foreign investment, which thus drives monetary development and creates new job opportunities.
Cuba is associated with different global associations, including the Group of Seventy-Seven (G-77), the United Nations, the Non-Aligned Movement (NAM), and the World Trade Organization (WTO). Through dynamic cooperation in these bodies, Cuba takes part in global financial and political activities, in order to enhance its global growth. This association has slowly improved bilateral relations, especially with European and Latin American countries, subsequently expanding the potential for global participation and empowering foreign financial backers to set up organizations in Cuba.
As per the International Monetary Fund, while Cuba's monetary development stays moderate, gauges propose further developed conditions before very long because of expanded foreign investment and extended foreign exchange connections. The public authority is overseeing expansion and the joblessness rate is step by step declining, establishing a good climate for business foundation in Cuba. Regardless, it is essential to perceive that Cuba keeps on confronting financial difficulties, remembering limitations for the confidential area and the requirement for additional foundation upgrades.
Promising economic sectors for starting a business in Cuba
Enrolling an organization in Cuba offers extraordinary open doors across a few vital financial areas. Laying out a Cuban business inside these ventures can give critical advantages thanks to government support, creating foundation, and developing interest both locally and universally.
The travel industry stays an imperative area of Cuba's economy, drawing in many foreign guests yearly. As political limitations straightforwardness and global relations improve, the interest for the travel industry administrations keeps on developing. Putting resources into lodgings, resorts, visit administrations, and diversion adventures presents a promising way for beginning an organization in Cuba. The public authority effectively upholds this area through venture impetuses and works on strategies for foreign financial backers.
Cuban horticulture requires modernization and advancement, opening doors for endeavors gaining practical experience in serious development innovations, natural cultivating, and biotechnology. The food handling area is encountering development, driven by rising homegrown and trade interest for Cuban items.
Cuba has secured itself as a forerunner in biotechnology and drugs in Latin America, creating imaginative clinical items like immunizations and meds. Foreign financial backers can investigate cooperation or joint endeavors with Cuban examination places and makers to take advantage of the expanding clinical and drug markets.
Cuba's energy area is going through a change with an emphasis on sustainable power sources like sun oriented, wind, and biomass. Given the worldwide push for clean advancements and feasible turn of events, interests in environmentally friendly power projects hold huge potential. Laying out organizations in Cuba inside this area benefits from good circumstances for normal asset use and potential duty motivators.
Cuba's IT foundation lingers behind worldwide principles, introducing significant learning experiences in the area. Interests in media communications and programming advancement can improve homegrown and worldwide correspondences, urgent for upgrading the public economy's seriousness. Laying out IT firms in Cuba can further develop admittance to advanced advances and administration quality for both private and corporate clients.
These areas offer key open doors for financial backers thinking about organization enlistment in Cuba. With government support and its essential area, Cuba presents one of a kind business possibilities, especially inside these promising enterprises.
Review of Cuban corporate legislation
Cuban corporate law directs the exercises of organizations, including their enrollment, the board and liquidation. Information on these regulations is fundamental for any individual who intends to open an organization on the island of Cuba.
Fundamental regulations and guidelines
- Corporations Law
This Corporations Law lays out the lawful structure for the creation and activity of a wide range of business organizations in Cuba. The law characterizes various kinds of organizations, like Sociedad Anónima (Business entity) and Sociedad de Responsabilidad Limitada (Restricted Obligation Organization), and furthermore sets edicts for their constituent reports, wherewithal, the executives and liabilities.
- Foreign Investment Law
The law draws specifically consideration from financial backers wishing to lay out a business in Cuba. This regulation gives the lawful premise to foreign investment and depicts the designs through which outsiders can contribute, including joint endeavors, worldwide financial affiliations and completely foreign investments. It likewise frames the certifications and assurances that foreign financial backers can anticipate, including insurance against nationalization and certifications for the exchange of income abroad.
Main government agencies responsible for company registration
The process of registering a company in Cuba involves interaction with several key government agencies, each of which performs specific functions to ensure compliance with corporate laws and the smooth functioning of the business.
The Ministry of Justice plays a central role in the process of setting up businesses in Cuba . It is responsible for registering all types of legal entities, including maintaining the state register of commercial companies. It has jurisdiction over the issuance and confirmation of incorporation documents, which is a key step in the founding of a company. The Ministry also provides storage and access to corporate records, which is important for maintaining transparency and compliance with legal requirements.
This body plays a key role in simplifying the registration process for foreign investors wishing to set up a business in Cuba . The Ministry provides assistance in obtaining the necessary licenses and permits related to foreign investment. It also provides information on current economic policies, tax breaks and other incentives offered to foreign companies.
The Tax Administration Office is responsible for tax regulation of all businesses in Cuba . He monitors compliance with tax obligations and provides the necessary information for tax planning when establishing a company. ONAT also provides tax return assistance and tax advice to new firms entering the market.
The role of each of these authorities is critical to the registration of a company in Cuba , ensuring that all established legal and regulatory requirements are met. Cooperation with these authorities facilitates the establishment process and helps establish a successful and legal enterprise in Cuba.
Types of Business Structures Available in Cuba
When it comes to choosing a business structure in Cuba , understanding the different forms available is critical. Each business structure has its own characteristics and advantages, which depend on the size of the enterprise and the sector of the economy. Here are the main models of OPF that foreign investors who want to create a company in Cuba can consider :
Sociedad Anónima (SA) – Joint Stock Company
A joint stock company, known as Sociedad Anónima (SA), is the favored decision for huge ventures that require critical capital investment. The fundamental trait of this construction is the presence of investors, who are not entirely settled by the size of their cooperation in the approved capital of the organization.
To join a stock company, at least two pioneers are required, who can be either people or lawful elements. This makes adaptability in shaping the piece of investors, which is particularly significant for huge financial backers and worldwide accomplices.
Joint stock companies are likewise expected to distribute their fiscal summaries, which builds the degree of certainty with respect to possible financial backers. What's more, the option to give shares and draw in funding through the securities exchange makes this construction particularly appealing for enormous scope projects.
Sociedad de Responsabilidad Limitada (SRL) – Limited Liability Company
A limited liability company, or Sociedad de Responsabilidad Limitada (SRL), is the best solution for small and medium-sized companies in Cuba . In this structure, the liability of each participant is limited to their shares in the company's authorized capital, which reduces financial risks.
To create a limited liability company, one founder is sufficient. This simplifies the registration process and makes SRL attractive to individual entrepreneurs and small companies.
Cooperativa – Cooperative
Cooperatives are associations of individuals united for joint activities in various sectors, covering the agricultural sector, industrial production and the service industry. They are a flexible and accessible form of entrepreneurship, suitable for small-scale companies.
To create a cooperative, a minimum of three founders are required. This model involves collective leadership and active participation of all members in the decision-making process.
Sucursal – Branch of a foreign enterprise
Branches of foreign companies allow you to conduct business in Cuba without the need to create a separate legal entity. This option is suitable for companies wishing to expand their presence in the Cuban market while maintaining control by the parent company.
Choosing the appropriate legal form for doing business in Cuba depends on many factors, including the size of the business, the amount of investment, business objectives and the degree of responsibility desired. Each of the structures considered - mixed companies, cooperatives and branches of foreign companies - offers its own unique advantages.
Corporate Governance Structure in Cuba
Corporate governance is a key factor in the long-term success of any business. For businesses registered in Cuba , there are a number of requirements and best practices that must be taken into account when managing the business. Implementing a clear governance structure and complying with regulatory requirements not only provides legal protection, but also helps create a positive corporate culture.
Company management structure
The hierarchical design of an organization in Cuba regularly contains a Comprehensive gathering of Shareholders, a Board of Directors, and a Chief Directorate.
The Regular gathering of Investors/shareholders fills in as the most elevated administering body, vested with power to pursue critical vital choices, for example, altering the sanction, supporting yearly reports, and deciding benefit conveyance.
The Directorates are entrusted with managing the organization's everyday tasks. Its individuals, chosen by investors, are answerable for molding corporate strategies, guaranteeing their execution, and administering the exercises of the leader and the executives.
The Chief or Executive Directorate, driven by the General Director, is responsible for the everyday organization of the organization. The President or CEO and their group are answerable for executing vital goals laid out by the Board of Directors.
Responsibilities and rights of shareholders
In corporate governance, shareholders occupy a key position, participate in General Meetings and make decisions on important issues of the company. They are given the right to access information about the company's activities, including financial reports and development plans. Among other things, shareholders can influence the appointment of management and important decisions in the management of the company.
Compliance and corporate culture
Compliance is mandatory for all companies in Cuba . It provides for compliance with taxes, labor, environmental laws and other regulatory acts. In practice, this requires the implementation of a risk management system, internal control and audit.
Maintaining a corporate culture based on ethics, transparency and responsibility helps improve performance, build trust with business partners and improve public perception of the company. This is especially important when attracting external investment and international expansion.
Necessary documents to create a company in Cuba
Opening an organization in Cuba includes gathering and submitting indentures that should satisfy specific guidelines of enrollment and legitimization. These indentures make the lawful reason for the functions of your organization and include:
- The organization's contract (Estatutos Sociales), which should contain data about the sort of business, the executives' structure, address, targets, and so forth.
- Minutes of the gathering of pioneers with the reception of a choice on the establishing of the organization.
- Rundown of organizers and investors showing their own information and the size of offers in the approved capital.
- International IDs or other recognizable proof indentures of pioneers and supervisors.
All reports given beyond Cuba should be legitimized through the Cuban Consulate in the nation of the beginning of the archive or through an apostille on the off chance that the nation of issue has joined the Hague Apostille Convention.
Step-by-step description of the process of registering a company in Cuba
Establishing a company in Cuba includes several important steps:
First, you need to determine which type of legal entity is most suitable for your business.
An application to reserve a name is submitted to the Ministry of Justice. You should provide multiple name options for your business to ensure that the name you choose is unique and compliant with legal requirements.
Next, you need to draw up the company’s charter and minutes of the constituent meeting, as well as develop a detailed business plan. This will help you have a clear picture of your company's structure, goals, and financial plans.
At the last stage, you will need to submit articles of incorporation and other related documents, which are listed in the section above.
Official establishment of a company in Cuba usually takes 1 to 3 months, after which you will receive a certificate of incorporation and can begin your activities.
This process involves detailed planning and strict adherence to all legal rules. It should be remembered that any delays in submitting documents or errors in their execution may increase the overall time frame for registering a company on the island of Cuba .
Obtaining licenses for companies to operate on the island of Cuba
After successfully registering a company in Cuba, it is necessary to obtain the appropriate licenses and permits to legally operate in the chosen industry. Different sectors such as healthcare, education, construction, tourism, and export and import have their own unique licensing requirements. Once you have determined the required licenses, you should prepare and submit all required documents, such as the company's incorporation documents, financial statements, business plans and evidence of management qualifications.
Upon completion of checks and evaluation of the provided materials, the relevant authorities make a decision to issue a license. Depending on the complexity and workload of regulatory authorities, the process of obtaining a license can take from several weeks to several months. It is important to note that most licenses require periodic renewal, usually every year or every few years, which requires the company to carefully monitor deadlines and prepare the necessary documents for their renewal. In addition, the company must strictly ensure compliance with all conditions specified in the licenses, including quality and safety standards.
Choosing a location to establish a company in Cuba
While laying out a business in Cuba, the decision of area is of vital significance as it can essentially affect functional capacities, charge commitments, market access and coordinated factors conveniences. Contingent upon the points of interest of your business, there are a few vital areas to consider, like the Cuban capital of Havana, the district and port city of Mariel, and the retreat city of Varadero.
- Havana
Havana is the capital and economic center of Cuba, where the main government and business structures of the country are concentrated. This location is ideal for starting a business activity in Cuba if it is focused on global trade, tourism or services. Havana offers a developed infrastructure, the best transport links on the island and direct access to the largest consumer market in the country. Establishing a company in Havana also provides convenient access to numerous diplomatic and international organizations, as well as qualified personnel.
- Mariel
Mariel is a port city and one of the most promising industrial hubs in Cuba, especially with the opening of the Mariel Special Development Zone (ZEDM), which offers significant tax breaks and incentives for foreign investors. Establishing a company in Mariel is ideal for manufacturing companies, logistics hubs and export-oriented enterprises. The special economic zone offers modern infrastructure, simplified customs clearance procedures and favorable conditions for doing business.
- Varadero
Varadero is a famous resort city on the northern coast of Cuba that attracts millions of tourists every year. Registering a company in Varadero can be cost-effective for businesses in the hospitality, restaurant, entertainment and tourism services sectors. With its beautiful beaches and developed tourism infrastructure, Varadero provides a unique perspective for tourism companies in Cuba .
When choosing a location to register a business in Cuba, there are a number of aspects to consider:
- The target market of your business and its accessibility from the selected location.
- Infrastructure and logistics capabilities that can support your business's operations.
- Tax and investment incentives offered in various regions and special economic zones.
- Availability of qualified labor resources and conditions for their employment.
A thorough analysis of these aspects will help you determine the most suitable location to open a company in Cuba , providing the best conditions for the growth and development of your business.
Cuban tax system
When considering setting up a business in Cuba, it is important to understand the basic tax obligations that will apply to your business.
The Cuban tax system includes several key taxes. The standard corporate income tax rate is 35% for companies with wholly foreign ownership. However, new companies registered in certain priority sectors may be exempt from paying corporation tax for a period of up to eight years. After this, a rate of 15% applies. Taxable income is defined as gross income reduced by tax-eligible expenses.
There is no VAT in Cuba, but there is a sales tax, the rate of which varies depending on the type of product: 2% on wholesale sales, 10% on retail sales and 10% on services. Imported equipment and raw materials used for production needs may be exempt from VAT if they have permission from the relevant government authorities.
Employers are required to pay payroll taxes, which range from 20% in the first year to 5% from the fifth year onwards. Social security contributions are also paid, determined annually by the state budget.
Tax on real estate and movable property is levied at a rate of 2%, and tax on the transfer of property - from 1% to 4%.
Accounting and reporting system for Cuban enterprises
In Cuba, all companies are required to maintain financial statements in accordance with national accounting standards (Cuban GAAP). It is important to use a double entry system, ensure that every transaction is documented, and maintain daily records to keep data accurate and up to date.
Companies must provide quarterly financial statements that include a balance sheet, income statement, and transaction report. Each transaction must be supported by relevant documents such as invoices, receipts and contracts. Accounting records must be maintained daily to ensure data is accurate and up to date.
At the end of the financial year, annual financial statements certified by an independent auditor are presented. Large companies and companies with foreign participation are required to undergo an annual audit conducted by certified auditors.
Tax returns are filed by every company in Cuba by March 31 of the following year. The declaration includes a statement of income and expenses, as well as calculations of taxes paid. Tax returns can be filed electronically through the official portal of the Cuban Tax Administration.
Strict compliance with established accounting and reporting requirements helps avoid fines and sanctions, and also contributes to the transparency and financial stability of the enterprise.
Financial services for business clients in Cuba
The Cuban banking sector is under strict government control. The Central Bank (Banco Central de Cuba) regulates and controls all financial institutions in the country, ensuring the stability and reliability of the financial industry. The main objectives of the CBK are to control monetary and credit policy, control inflation and support economic growth.
Leading banks in Cuba include Banco Nacional de Cuba, Banco Financiero Internacional (BFI), Banco de Crédito y Сomercio (BANDEC), and Banco Internacional de Сomercio (BIСSA). These banks offer a wide range of financial services to corporate clients, such as lending, international payments, foreign exchange and treasury management.
To start the most common way of opening a corporate record at a Cuban bank, you ought to stick to the accompanying guide:
- Choosing a Bank: Distinguish a reasonable bank that offers the necessary administrations and meets your business needs.
- Readiness of Documentation: Order the vital arrangement of records, including the organization's constituent archives, charge distinguishing proof numbers, as well as visas and ID papers of organization directors.
- Application Accommodation: Complete and present an application for opening a monetary record, giving exhaustive insights regarding the organization and its tasks.
- Meeting with Bank Delegate: Orchestrate a gathering with a delegate from the picked financial organization to examine agreements and to execute important arrangements.
- Expect Endorsement: Following the convenience of each and every expected record and finish of the check association, the bank will overview the application and pick whether to help the record opening.
The most common way of opening a corporate record in Cuba might take a period because of the need to conform to every single administrative necessity and an expected level of effort. It is critical to set up all indentures ahead of time and be ready for extra demands for data from the bank.
Key Benefits of Engaging in Business Activities in Cuba
Laying out a business in Cuba offers foreign financial backers unmistakable competitive edges. Here's the reason:
- Topographical area and market access: Cuba's essential area in the Caribbean district allows simple admittance to North and Latin American business sectors, making it an alluring center point for global extension.
- Monetary changes and investment environment: Ongoing monetary changes in Cuba plan to upgrade its speculation request. New regulation backings foreign investment and smoothes out administrative cycles, making beginning an organization in Cuba seriously tempting.
- Tax breaks and motivating forces: Cuba gives different tax cuts and impetuses for foreign financial backers, expanding the productivity of beginning an organization. These incorporate corporate assessment exclusions for as long as eight years in need areas, diminished charge rates for explicit exercises like the travel industry and IT, and Tank exceptions on imported hardware and natural substances utilized for creation.
- Job opportunities: Cuba flaunts an exceptionally educated labor force because of its advanced schooling system. Laying out organizations in Cuba empowers the commitment of these experts in different businesses. The country's instructive establishments guarantee the preparation of experts across different fields, working with compelling business improvement.
- Support for small and medium-sized enterprises (SMEs): The Cuban government effectively backs SMEs through awards, charge motivators, and warning administrations. This establishes a great climate for limited scope organizations looking for passage into the Cuban market.
- Conducive business climate: Beginning a business in Cuba gives admittance to a steady and predictable business climate. Cuban specialists are focused on cultivating manageable financial development and private industry growth, offering help and backing to new organizations through government offices.
Conclusion
Monetary changes and a positive speculation climate are drawing the consideration of global financial backers to Cuba. With proficient direction, setting up an organization in Cuba can be smoothed out.
IQ Decision offers thorough administrations for enrolling and overseeing organizations in Cuba. Our skill covers all stages, from choosing the suitable plan of action and coordinating documentation to laying out a business account and sticking to administrative guidelines. Upheld by our experts' broad knowledge of Cuban regulation and significant experience working with worldwide clients, we guarantee a consistent enrollment process while helping with beating any snags.
