How to start a business in Cuba as a foreigner (2026)
Starting a business in Cuba as a foreigner: restricted.
Cuba maintains a heavily state-directed economy in which foreign investment is channelled through narrowly defined, government-approved modalities, primarily joint ventures with Cuban state entities or wholly foreign-owned enterprises in designated sectors, both requiring Council of Ministers (or delegated body) approval. Non-Cuban foreigners wishing to participate in the domestic private MIPYME (small/medium enterprise) sector must hold permanent legal residency in Cuba. A March 2026 reform for the first time permits Cubans residing abroad to invest in private domestic businesses, but non-Cuban foreign nationals continue to face a restrictive, bureaucratic environment with no general right to form a company.
Legal framework
Law 118 on Foreign Investment (2014); Decree-Law 46/2021 on MIPYMEs (private SMEs) as amended by Decree-Law 88/2024 and Decree 107/2024
Key points: starting a business in Cuba
Governing law & modalities
Law 118 (2014) authorises three modalities of foreign investment: (1) joint ventures between foreign investors and Cuban state entities (sociedad mercantil mixta), (2) wholly foreign-owned enterprises (empresa de capital totalmente extranjero), and (3) international economic association contracts. All require an enabling resolution from the Council of Ministers or a delegated central-state body.
No direct partnership with private Cubans
Under Law 118, foreign capital may only associate with Cuban legal entities (i.e., state enterprises), not with private Cuban natural persons. This structurally bars foreigners from entering a standard private-sector partnership with an individual Cuban.
investmentpolicy.unctad.org horizontecubano.law.columbia.edu
MIPYME route requires permanent residency
Since 2021 Cuba allows private micro, small, and medium enterprises (MIPYMEs). Foreigners may become MIPYME partners only if they hold permanent residency in Cuba ("effective residency"). Decree-Law 88/2024 tightened this requirement further; approval since March 2025 has been delegated to local Municipal Administration Councils (CAMs).
Approval timeline & bureaucracy
Joint-venture applications under Law 118 must receive a government decision within 60 calendar days (45 days in delegated-authority sectors). In practice, negotiations with state counterparts and regulatory reviews substantially lengthen the overall timeline. The government's MINCEX portal ("Invest in Cuba") publishes the official FAQ and project portfolio.
Prohibited activities & restricted sectors
Decree 107/2024 expanded the list of activities barred from the private sector to 125 items, including financial intermediation, vehicle sales, TV/radio broadcasting, medical-equipment manufacturing, and solid-waste collection. This limits the scope available to any investor, foreign or domestic.
March 2026 reform: Cubans abroad now eligible
In March-May 2026, Cuba for the first time formally permitted Cuban nationals residing abroad (without island residency) to invest in private MIPYME businesses and partner with domestic private economic actors. Decree 150/2026 created a new "Investor and Businessperson" immigration status for this group; non-Cuban foreigners are not covered by this reform.
Timeline of decisions
- LawDecree-Law 114/2025: State-Private Business Partnerships Legalized
Cuba published Decree-Law 114/2025 in Gaceta Oficial No. 24, creating the first legal framework in decades for joint ventures between state enterprises and private MSMEs, via mixed LLCs, equity stakes, or association contracts. The decree entered into force April 2, 2026, but requires Ministry of Economy approval for every deal and bars partnerships in health, education, and defense.
Havana Times
- EnforcementGovernment Orders Closure of Dozens of Private MSMEs After Audits
Cuban Prime Minister Manuel Marrero reported to the National Assembly that 65 of 869 audited MSMEs were partially or fully shut down, citing accounting deficiencies and unreported income. The crackdown produced the first net decline in active MSME registrations since legalization in 2021, underscoring the state's conditional tolerance of private enterprise.
CiberCuba
- LawNew MSME Regulatory Package Tightens Rules and Decentralizes Approvals
Cuba issued updated MSME and cooperative regulations, expanding the prohibited-activities list from 112 to 125 sectors, tightening partner-eligibility rules, and shifting new-business approvals from the Ministry of Economy to local councils. The decentralization backfired: only 231 new economic actors were approved in the following ten months as local bureaucracies struggled.
CEDA (Cuba Economic Development Association)
- LawDecree-Law 46/2021: Private MSMEs and LLC Legal Form Created
Cuba's Council of State issued Decreto-Ley 46/2021, introducing the Sociedad de Responsabilidad Limitada (SRL/LLC) as a private corporate legal entity, the first in the country's socialist era. The law defined micro (1-10), small (11-35), and medium (36-100) employee firms; within four years over 11,000 private MSMEs registered under the framework.
U.S.–Cuba Trade and Economic Council
- LawSelf-Employment Occupations Expanded from 127 to Over 2,000 via Negative List
The government replaced the decades-old positive list of 127 approved self-employment activities with a negative list of only 124 state-reserved sectors, effectively opening ~2,000 occupations to cuentapropistas. Law, architecture, engineering, journalism, and core health and education activities remained prohibited for private workers.
Columbia Law School – Cuba Capacity Building Project
- LawNew Cuban Constitution Recognizes Private Property and Market Role
Approved by 87% of voters, Cuba's 2019 Constitution explicitly recognized private property (Article 22) and the market's role in the economy for the first time, while prohibiting concentration of assets in non-state hands. The constitutional change provided the legal basis for the MSME legalization and self-employment expansion that followed in 2021.
Constitute Project (official constitutional text)
- Law · officialLaw 118: Comprehensive Foreign Investment Act Replaces 1995 Framework
The National Assembly enacted Law 118, superseding Law 77 of 1995, to attract foreign capital with tax holidays, import-duty exemptions, profit repatriation rights, and access to international arbitration. All investments still require Council of Ministers approval, and strategic sectors, education, defense, public health, remain closed to foreign participation.
UNCTAD Investment Policy Hub
- DecisionCommunist Party 'Lineamientos': Official Blueprint for Private-Sector Expansion
The Sixth Congress of the Communist Party adopted the Lineamientos de la Política Económica y Social, formally endorsing expanded self-employment, non-agricultural cooperatives, and a smaller state payroll as pillars of the 'updating' of Cuba's economic model. The document set the political legitimacy for Raúl Castro's market-oriented reforms.
Havana Times
- LawRaúl Castro Expands Licensed Self-Employment to 178 Activities
The government authorized 178 self-employment occupations and announced the transfer of 500,000 state workers to the private sector, explicitly reversing Fidel Castro's policy of stigmatizing private work. Registered self-employed workers tripled from under 150,000 to over 500,000 by 2015, making this the most significant opening since 1993.
ABC News
- LawLaw 77: First Post-Soviet Foreign Investment Statute Enacted
Cuba's National Assembly enacted Law 77 (Ley de la Inversión Extranjera), permitting joint ventures, international economic associations, and wholly foreign-owned companies. It offered the first modern legal protections for foreign investors and became the foundation for foreign-led business formation until it was superseded by Law 118 in 2014.
Cambridge Core – International Legal Materials
- Law · officialDecree-Law 141/1993: Self-Employment Legalized During Special Period
Facing a 35% GDP collapse after the Soviet dissolution, Fidel Castro's government issued Decreto-Ley 141 (published in Gaceta Oficial Extraordinaria No. 5), legalizing self-employment in ~117 tightly defined activities such as food stalls, shoe repair, and room rentals. This was the first formal re-opening of private economic activity since the 1960s nationalizations and the foundational precedent for all subsequent private-sector reform.
Banco Central de Cuba
Sources
- investmentpolicy.unctad.org/investment-laws/laws/55/cuba-foreign-investment-act
- investmentpolicy.unctad.org/investment-laws/laws/55/print/3
- inviertaencuba.mincex.gob.cu/en/faq/
- en.granma.cu/cuba/2026-03-17/measures-facilitating-participation-of-cubans-abroad-
- havanatimes.org/news/new-immigration-category-for-investing-in-cuba-takes-effect/
- weareceda.org/ceda-publications/cuban-government-approves-new-regulations-for-the-p
- horizontecubano.law.columbia.edu/news/foreign-investment-cuba
- oncubanews.com/en/cuba/economy/how-much-can-the-private-sector-grow-in-cuba/
- en.cibercuba.com/noticias/2025-12-18-u1-e43231-s27061-nid317016-golpe-al-emprendimient
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