Doing Business in Cuba

There are many opportunities for UK Business in Cuba. We provide a wealth of information and guidance on doing business in Cuba.

This includes:

  • Doing Business Guide

  • Sector Reports

  • FCO Country Updates

  • Overseas Security Information for Business (OSIB)

What are the Opportunities?

Opportunities can mostly be found in the following sectors:

  • Tourism/Infrastructure

  • Energy

  • Biotechnology

  • Healthcare

  • Agriculture/Packaging & Processing

  • IT and Communications

  • Mining

Guide to Doing Business in Cuba

UKTI has produced a guide aimed at companies experienced in overseas trade who are new to doing business with Cuba. This guide aims to provide a route map of the way ahead, together with signposts to sources of help.

  • Introduction

  • Preparing to Export

  • How to do Business

  • What are the challenges

  • Business Etiquette

  • How to invest in Cuba

  • Contacts

Sector Reports

For information on your sector in Cuba including characteristics of the market, opportunities and key contacts, please check out the latest sector reports where available.

Important advice for those doing business in Cuba – What are the challenges?

Cuba can be considered a small market for the UK (11.2 mill. inhabitants) with a low purchasing power given the low salaries (average salary=USD 20/ GBP. 12), but there is more to it like US remittances, tips, and the emerging private enterprise.

Product imports in Cuba take place in a centralised manner, being the State who makes decisions on the countries’ priorities in function of its needs and objectives. Besides, these imports take place through state importers who are the key contacts for any commercial operation with Cuba. When only one senior contact is the decision-maker, this may cut out many intermediaries but dependence on that one individual can lead to long delays. The latest changes in the Cuban economy and the decrease in the number of contracts approved for signature make evident that the Cuban government is choosing its business partners increasingly carefully.

All sales in Cuba are public sales that undergo several control points. It implies a system of registry for suppliers, bids, and tenders, mostly designed in a different format than that used in most countries. Depending on the end of the product, the winning asset could be price, quality, or delivery time.

Delays are common in foreign investment. Proposals are analysed and approved on a case-by-case basis and results are highly dependent on three main points that the foreign investor may offer: capital, technology (including management services), and market (increase of exports or import substitution). In practice, various sectors are not opened to foreign investment and, amongst those that are opportunities are quite selective and depend on long negotiations with the government.

But perhaps some of the greatest challenges are the lack of availability of medium and long-term finance and the US extra-territorial sanctions applied by the US Government.  Cuba has no access to the IFIs and short-term finance is only available at premium rates. 

Further, extra-territorial sanctions are applied by the US Government against companies in third countries that do business in the US if they breach the US economic embargo against Cuba.

However, these sanctions conflict with the UK Protection of Trading Interests Act which makes it illegal for UK based companies to comply with extraterritorial legislation (like Helms-Burton). The Act contains a provision for fines to be levied against companies and individuals that fail to comply with this stipulation. This UK provision is also supported by an EU Blocking Statute which makes it illegal to comply with the US’s extra-territorial sanctions.

As a result of this conflict of laws, UK banks carefully analyse potential commercial risks deriving from conducting banking relationships with Cuban companies. In the last two years, some companies (especially SMEs) have experienced difficulties processing payments to and from Cuba through UK banks. A cross-government group is currently working with UK banks on this issue.

UK companies considering doing business in Cuba should approach their banks early on to discuss their requirements. This will enable UK banks to identify and seek to resolve any challenges presented by the proposed transactions. Where a bank is unable to conduct transfers to or from Cuba, UK companies are advised to seek an alternative banking service provider . A list of alternative providers of banking services can be found at the British Bankers’ Association website:  http://www.bba.org.uk/about-us/member-list.

To minimise the impact of this conflict of laws, UK businesses are also strongly advised to avoid US dollar transactions involving a Cuban individual or business. In light of the US’s policy on trading with Cuba, such transactions are likely to present great difficulty and it is possible that companies may not receive funds they are owed.

UK companies experiencing problems as a result of the extraterritorial effects of UK sanctions (i.e. blocked payments) can also notify BIS and the European Commission.

Countries: Cuba
Topics: Getting Started
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