Description

 

Reyna Consulting Group (RCG) is an international trade and investment consulting firm with offices in Dominican Republic, with representation in la Havana, Cuba.

            RCG has a dedicated team of professionals and associates with many years’ experience in the Caribbean, actually in Cuban market providing customized assistance across a wide range of industries and for companies of all sizes. 

Our services include: the identification of business opportunities; feasibility/competence studies and business plan evaluation; selection of business partners; comprehensive advice with respect to regulatory compliance; and trade-mark registration.

 Our Competitive Advantage

• Highly qualified professional team and associates.
• Significant experience in international trade and foreign investment.
• Deep knowledge of the Cuban market and key local contacts.
• Fully independent advice.

Investment:

• Market studies determining the feasibility/risk-benefit analysis of investment projects.
• Assessment of potential partners for projects.
• Business Plan evaluation.
• Drafting of necessary documentation for presentation to relevant enterprises and government agencies.
• Contract review and technical assistance at all stages of the negotiation.
• Following up on the execution, up to legal action, in the event of breaches.

 

International Trade:

• Identification of business opportunities, competence studies, selection/contact of potential business partners and clients.
• Screening of companies of individuals who fit your needs.
• Comprehensive on-the-ground business development and support services.
• General compliance with respect to fiscal/taxation, banking, customs and registry provisions of the domestic market, avoiding delays and illegalities.
• Drafting and contract review, maximizing transaction efficiency and success.
• Following up on contract execution, up to legal action, in the event of breaches.

  Other Services through associate firms:

Trade-mark registration and other legal services.

• Arranging for meetings with key local contacts.
• Providing logistical support for market visits, trade fairs and other local market events (e.g., selection of location; attendee registration; airport pick-up and drop-off and hotel/car reservations for all attendees)
• Translation and interpretation services.

 REQUIREMENTS FOR INVESTOR:

1. The investor must sign a confidentiality agreement non-circumvention agreement with consulting company before traveling to Cuba.
2. The investor interested after meeting all the above requirements will proceed to fill the business visa or visa exploratory having a value for issue. Visas are filed with 15 days prior to the trip.
3. Business mode Cuba the investor must pay for passage, stay, meals and a down payment for staff costs in Cuba, conducted the business will be deducted from the amount of fees, these expenses must be payments 15 days prior to the trip.
4. The information provided above may vary according to each investment.
5. Documents to be legalized in the Embassy of Cuba have a cost that the investor must pay.
6. The investor agreed fees of consultants in the negotiations on investment.
7. Investor retire to have signed a confidentiality agreement and letter of intent in Cuba should, notify the consultant in writing and return all documentation issued by the Government of the Republic of Cuba and not disclose or transfer to third parties this information.

CUBA

General Description

Population: 11.2 million

Total Area: 110,860 km2
Capital: Havana
Language: Spanish (official)

Political Data
Republic. 14 provinces and 1 special municipality (Isle of Youth). Unicameral National Assembly of the People’s Power. Assembly sits twice a year; representatives of the Assembly serve 5 year terms.

Economic Data (2007)*
GDP (USD): 45.5 billion
Real GDP Growth Rate: 6.3 %
GDP per Capita: C$4,056

Inflation Rate: 2.6 %
Unemployment Rate: 1.9 %
Total External Debt: US$14 billion

 

Cuban Facts:

The lack of access to external financing has been a key constraint on growth. As relations with Venezuela and China continue to deepen, credit and investment from these countries should help growth remain above historic trends through the forecast horizon. We expect GDP to average 5% annually in 2006 and 2007. While official figures place growth in 2005 above 11.8%, GDP likely expanded by an estimated at 8 % last year.

Cuba has tremendous advantages long-term; not least an educated and literate population of more than 11 million people, first- world health indicators, a vibrant cultural, sporting and historical heritage and advantageous geographical position where ultimately it could act as a bridge between the US and Central/Latin America.
While many foreign companies have recently left Cuba, total investment has increased as a few major investors have made significant new investments.

Business week (August 2001) ranked the top 100 global brands and stated that of these 64 % were available in Cuba. Of 50 companies complied by PwC for the 2001 Annual list of the World’s Most Respected Companies Survey, 34 were found to have or have had presence in Cuba since 1995.

How to invest in Cuba?

Procedures: 1. To identify local companies interested in developing joint investment projects with foreign natural or legal persons. To this end, it is possible to: ·      Contact MINVEC´s Investment Promotion Center ·      Hire the services of a Cuba-based Consulting Firm ·      Contact the relevant Ministries and business groups 2. In the event the parties are interested in developing a foreign investment project, to sign a Letter of Intent or a Framework Agreement. 3. The required economic and legal documentation   for the proposed association is prepared during the negotiation process. 4. The above-mentioned documentation should be submitted to the Ministry for Foreign Investment and Economic Cooperation.  The Ministry will carry out a preliminary evaluation of the proposed investment project. 5. Granting (or denial) of approval for the investment project by the   Executive Committee of the Council of Ministers or a Commission thereof. 6. In order to facilitate and speed up the required arrangements to start the operations, a “One-stop Shop System” is available at the National Foreign Investment Office.

Approval or denial FOREIGN INVESTMENT PROCESS

Establishment of Business in Cuba:

                                                                                                                                      

Documents required for the presentation of businesses in Cuba:

  The Second Section of Decree No. 325 stipulates the documents required for the presentation to MINCEX of the business proposals involving foreign investment, according to the different modalities defined by Law no. 118.  Article 12.7 of the said Second Section lists the documents to be submitted by the foreign investor, which are the following:

• Authorized copy of the duly authenticated and registered deeds of incorporation, the business register certificate or a similar document of his country of origin that proves his standing, issued not earlier than six months ago.
• Financial statements of the last accounting period, certified by an independent entity.
• Bank guarantees issued not earlier than six months ago.
• Sponsorship letter of the head office, in case the investor is a branch or subsidiary or is represented by an off shore trading company.
• Certified consent of the management body which expresses their approval of the intended investment.
• Duly authenticated powers of attorney.
• Evidence of his experience in the activity targeted for the investment.
• In case of being a natural person, the investor must submit a copy of his identification documents and bank guarantees issued not earlier than six months ago.

The documents proving the incorporation of the company, the certification of its registration in the Business Register and the powers of attorney must be duly authenticated by the authorities of the country, and the Cuban consular office located in such country, and must be translated into Spanish, in case they have been written in another language.

Levels for business approval

• The establishment of foreign investment in Cuba requires case-by-case authorization. The approval is given according to the sector, the modality and the characteristics of the foreign investment, by the following State bodies, in compliance with the provisions of Chapter VIII, Articles 21.1, 21.2, 21.3, and 21.4 of Law No. 118.
• Council of State: it approves foreign investment, whichever its modality, in the following cases:
• a) When nonrenewable natural resources are prospected or exploited, except in the case of international economic association risk agreements that are approved and authorized by the Council of Ministers; and b) When foreign investment is aimed at the management of public services, such as transportation, communications, aqueducts, and electricity, the construction of a public work or the exploitation of a public good. Once the foreign investment has been approved by the Council of State, in the aforementioned cases, the Council of Ministers will issue its Authorization.
• Council of Ministers: it approves and issues the Authorization for foreign investment, in the cases described below:

1. Real estate developments;
2. Totally foreign capital companies;
3. The transfer of State ownership or other property rights over State goods;
4. International economic association risk agreements for the exploitation and production of non-renewable natural resources;
5. A foreign company working with public capital;
6. The use of renewable sources of energy;
7. The business system of the health and education sectors and the armed forces; and
8. Other foreign investments that do not require approval by the Council of State.

In the last two cases, the authorization shall be issued within a term of 60 calendar days, counted as of the date of submission of the application and it shall be notified to the applicants.

 Head of the State Central Administration entities:

In this case the decision shall be issued within a term of 45 calendar days as of the approval of the application.

The Minister of Foreign Trade and Investment will approve all the International Economic Association Contracts for production and services management, as well as the rendering of professional services. The Minister of Tourism will approve the International Economic Association Contracts for hotel management businesses.

Foreign Investment in Cuba Most important legal definitions:

Foreign Investment: capital input by foreign investors in any of the modalities established in this Act which involves, during the authorized term, the undertaking of risks in business, the expectations of obtaining profits and a contribution to the development of the country.

Foreign investor: a natural person or legal entity with foreign domicile and capital which participates as a shareholder in a joint venture or a totally foreign capital company, or that is a party to an international economic association agreement. National Investor: a Cuban legal entity domiciled in the national territory of Cuba which participates as a shareholder in a joint venture, or is a party to an international economic association agreement.

These conditions open the way for cooperatives, both agricultural and nonagricultural, to be regarded as national investors on account of their status as legal entities.

Modalities of foreign investment:

Foreign investment, according to Article 12 of Law No. 118 can be defined as:

1. a) Direct investment, in which the foreign investor participates as a shareholder in a joint venture or in a totally foreign capital company; or makes contributions to international economic association agreements, thus participating, in an effective manner, in the management of the business; and
2. b) Investments in equities or other securities or bonds, either public or private, which do not fit the definition of direct investment. In addition, foreign investment according to Article 13.1 of the Law shall adopt one of the modalities appearing below, according to the definitions included in Article No. 2:

 Joint venture: Cuban trading company which adopts the form of a corporation with registered shares in which one or more national investors and one or more foreign investors participate as shareholders. (In Article 14 and its items in the Second Section of Chapter IV of Law No. 118, the main aspects regarding this modality are presented).

The establishment of a joint venture shall require the drafting of a public deed as an essential condition for its validity. The Articles of Association (which will include the provisions related to the organization and operation of the company) as well as the Authorization and the association agreement will also be attached to it. The joint venture will acquire legal personality upon being registered in the Business Register.

Joint ventures may establish offices, representations, branch offices and subsidiaries both within the national territory of Cuba and abroad, and participate in entities abroad.

International Economic Association Agreement: an agreement between one or more national investors and one or more foreign investors for the realization of activities fitting an international economic association even without this being a legal entity distinct from that of the parties. (In Article 15 and its items in the Third Section of Chapter IV of Law no. 118, the main aspects regarding this modality are presented).

According to article 13.2 of Law no. 118, international economic association agreements include, among others, the risk contracts for the exploration of nonrenewable natural resources, construction, agricultural production, and hotel, production or services management and the contracts for the provision of professional services.

Totally Foreign Capital Company: trading entity with foreign capital without the involvement of any national investor or natural person with foreign capital. (In Article 16 and its items in the Fourth Section of Chapter IV of Law no. 118, the main aspects regarding this modality are presented). In this modality, the foreign investor shall manage the company, enjoy all the rights thereof and be liable for all the obligations established in the Authorization. In addition, upon the company’s registration in the Business Register, foreign investors shall be able to settle within the national territory of Cuba:

1. As natural persons, acting on their own behalf;
2. As legal entities, by setting up a Cuban subsidiary office of the foreign entity they own, by means of a public deed, in the form of a corporation with registered shares; or c. As legal entities, by establishing a branch of a foreign entity.

Special Development Zone Mariel:

In September, 2013, the Special Development Mariel Zone (SDZM) was created; it is located to the west of Havana city, at a distance of 45 km and has an area of 465, 4 km². The Zone has very favorable location and logistic conditions, especially after the investment made in the Mariel Port.

It constitutes a space in the national territory that is not delimited within the customs boundaries, and in which special policies and regimes are applied, with the goal of promoting sustainable economic development by attracting foreign investment, technological innovation and industrial concentration, with a view to increasing exports, effectively replacing imports, and generating new sources of employment, in constant articulation with the domestic economy.

Activities and sectors prioritized in the SDZM:

*.Biotechnology and pharmaceutical industry

* Renewable energy *.Agro-food industry

* Tourism and real estate development

* Canning and packaging industry

* Agriculture.

* Telecommunications and informatics

* Investment in infrastructure

SDZM legal system:

The foreign investment established in the Zone will be regulated by Decree Law No. 313 “Of the Special Development Zone Mariel”, and its supplementary rules. Law no. 118 “Foreign Investment Act” and its supplementary rules are also applicable by extension to the foreign investment established in the SDZM. Without detriment to the above said, the special regimes stipulated in this Law shall be applied to investments when they prove to be of advantage.

Special Tax System for the SDZM:

Any foreign investor established in the Zone shall pay the taxes stipulated in Law No. 113 “Of the Tax System” dated July 23rd, 2012, with the adjustments contained in its applicable legislation:

* Profit Tax: There is a 10-year exemption from this tax. The Minister of Finance and Prices may extend that period in the cases that could be of interest for the country. Thereafter, a 12 % tax rate shall be applied. Investors shall also be exempt from the tax on re-invested profits.

* Tax on the use of Labor Force: All investors are exempt from this tax.

* Tax on sales and services: All investors shall be exempt during the first year of operations; thereafter, a 1 % tax rate shall be applied. The international economic association agreements for hotel, production or services management and the rendering of professional services shall be exempt from this tax.

* Customs tax: There is an exemption for the means, equipment and goods imported for the investment process in the Zone. The General Customs of the Republic of Cuba may grant facilities with regards to the customs formalities required before and during the entrance of goods in the Zone from abroad.

* Contribution to social security: A 14 % tax rate shall be applied to the legal entities that use paid labor force.

* Territorial contribution to local development: All investors are exempt from this tax. * Income tax: Foreign investors that are natural persons shall be exempt.

* Environmental tax: It shall be paid with a 50 % bonus during the investment recovery.

Protections for the Foreign Investor

Of most importance is Law 77, which states that foreign investments cannot be expropriated, except in exceptional circumstances when it is necessary for the public good or in the public interest, which shall be declared by the government, in accordance with the Constitution; the then-current legislation; and the operative international treaties to which Cuba is a signatory and which promote and reciprocally protect trade; and even then, only after first indemnifying the foreign investor for the commercial value (established mutually) of the property expropriated.

Once the term of authorized operation ends and the same is not extended, a mixed corporation, IEA, or fully foreign-capitalized company, proceeds to liquidation, to occur in accordance with what is stated in the constituting documents and any applicable legislation/regulation. Whatever amount corresponds to foreign investors is to be paid.
The foreign investor acting through an International Economic Association or fully foreign-capitalized company can, with the prior consent of the parties (in the case of an IEA), sell or transfer to the government, or to a third party (with prior government authorization) his/her/its interest in the IEA or company, in whole or in part, for whatever price said interest commands. Valuation in these transfers (to third parties or to the state) is a matter of negotiation. In the event agreement is not possible, valuation is conducted by an internationally recognized and respected business valuator. Said valuator must be authorized/recognized by the Ministry of Finances and Prices, but other than that, is chosen by mutual agreement by the negotiating parties. Where the vehicle in question relates to a fully foreign-capitalized company, the negotiating parties are the foreign investor and the Ministry for Foreign Investment and Economic Collaboration.

Furthermore, the foreign investor has the right to freely transfer property, tax-free of personal gains (that is, after the investment vehicle has paid its tax on its profits, if any) and to thereby liquidate his/her/its investment.

Similarly, people who are citizens in other countries and who work for a mixed corporation, for an IEA, or for a fully foreign-capitalized company, as long as they are not permanent residents of Cuba, have the right to transfer out of the country their salary within the amount allowed by the Banco Central de Cuba, as per its regulations.

Agreements for the Promotion of Trade and Reciprocal Protection of Investments.

Aside from the protections afforded by Cuban domestic legislation, foreign investments from countries which have signed Agreements (with Cuba) for the Promotion of Trade and Reciprocal Protection of (Foreign) Investments receive further protection (APTRPI). These agreements guarantee that entities from these countries investing in Cuba will not suffer less favourable conditions of trade vis-à2à-vis any other countries. Furthermore, they regulate the possibility (very exceptional) of expropriation for the public good or in the public interest, providing, for instance, that fair indemnification must be paid without unjustified delay. These agreements provide for a system of binding arbitration, with shorter deadlines for resolution that are normally applicable (outside of APTRPI).

 

 

Welcome to the door of the world Cuba

Bienvenidos a la Puerta del Mundo Cuba 

Benvenuti alla porta del mondo Cuba