Economic Overview
The Cuban economy is still influenced by the embargo imposed by the United States.
Washington had incompletely loosened exchange and travel limitations under President Barack Obama, before his successor President Donald Trump switched course.
In spite of its separation, the Cuban economy became 1.2% in 2018 (contrasted with 1.6% in 2017), which was beneath the administration’s gauge of 2%.
In 2019 the economy is required to become 1.5%, in spite of falling fare incomes and proceeded with severity measures. Development was eased back incompletely because of an enduring decrease in fare profit. However, the travel industry, development, and agribusiness supported the economy.
According to Trading Economics, inflation reached 6.9% last year. Cuba’s new president, Miguel Díaz-Canel promised to modernize the country’s social and economic model.
A new constitution is in the works, and it seeks to institute a major government reorganization and pave the way for recognition of private businesses.
Main sectors in Cuba
Regardless of its little size, Cuba is wealthy in regular assets. Nickel is significant for Cuba, as its driving regular asset.
Cobalt is likewise inexhaustible on the island, making Cuba probably the most astounding maker and exporters of both nickel and cobalt on the planet. Cuba additionally has seaward oil and flammable gas saves, for the most part in the northern piece of the island.
Sugarcane has been Cuba’s principle crop for more than 300 years. Farming speaks to 3.8% of GDP and utilizes 18.4% of the populace. Its primary creations are still sugar and sugar stick (12.5 billion tons of sugar stick are delivered each year), which take up 33% of the developed land. Tobacco is the nation’s second biggest fare crop. Other horticultural items incorporate citrus, espresso, rice, potatoes, beans, bananas, cotton, and domesticated animals.
Industry speaks to 24.4% of GDP and utilizes 16.5% of the populace. It centers around farming items, creation of bond, materials, tobacco, and rural hardware. Cuba likewise has noteworthy mineral assets (especially of nickel, cobalt, gold, and copper) and is right now leading hydrocarbon investigation.
The primary part of action in Cuba is the administrations division, which speaks to 73.5% of GDP and utilizes 65% of the dynamic populace. Its criticalness is unequivocally identified with the advancement of the travel industry, an area that blasted after Barrack Obama patched US ties with Cuba in 2016.
Taxes for business in Cuba
Corporate Taxes
- Company Tax – exempt for the first eight years, 15% rate from the ninth year
- Tax Rate For Foreign Companies – Companies with total foreign ownership are taxed at a rate of 35%.
- Capital gains are taxed as ordinary corporate income.
- Main Allowable Deductions and Tax Credits. Exemptions exist in certain cases: foreigners and franchise holders located in free-trade zones or industrial estates are exempt of tax on profits and labor force tax.
Other Corporate Taxes
Payroll tax, stamp tax, road tax, agricultural land tax (levied per hectare ranging from CUP 30 to CUP 120 based on the four desingated types of land), property tax (2%), property transfer tax (1% to 4%), tax on the use and exploitation of forestry and wild fauna, tax on the use of workforce (starting from 20% on the first year of employment to 5% on the fifth and consecutive years) and social security contributions.
Investing in Cuba
Here are the main reasons that make Cuba a good investment:
- Secure and transparent legal corpus
- Good Infrastructure (port, road ,railway and communications)
- Qualified personnel
- Political, juridical and social stability
- Hight level of education and qualification of work force.
- Excellent geographical location
- Availability of natural resources
- A climate of safety for foreign personnel
- Hight indicators for education, social security and health of the population.
- Governmental policy that prioritizes research and technological innovation.