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    Cuba approves law aimed at attracting foreign investment

    Cuba approves law aimed at attracting foreign investment
    By Daniel Trotta

    HAVANA (Reuters) – Cuba’s National Assembly passed a new foreign
    investment law on Saturday that aims to bring badly needed capital to
    the communist economy by offering steep tax cuts and promising a climate
    of investment security.

    The assembly voted in a special session to approve the law, state
    television reported without providing a vote tally. It will become valid
    within 90 days.

    The new law halves the profits tax from 30 to 15 percent and exempts
    investors from paying it for eight years, though it also appears to
    withhold many of the tax benefits from companies that are 100 percent
    foreign-owned. Those incentives are reserved for joint ventures with the
    Cuban state and investments linking foreign and Cuban companies.

    Analysts and Cuban-based diplomats have expressed skepticism over the
    law, uncertain whether the one-party state has undergone a genuine
    change of heart and truly wants to attract foreign investors on
    international terms.

    Areas such as agriculture, infrastructure, sugar, nickel mining,
    building renovation and real estate development are considered ripe for

    Cuba needs to attract $2 billion to $2.5 billion in foreign direct
    investment per year to reach its economic growth target of 7 percent,
    minister for foreign trade and investment Rodrigo Malmierca said on
    Cuban state television on Friday night.

    Cuba does not publish figures on FDI, which economists estimate to be
    several hundred million dollars a year at most. Cuba’s gross domestic
    product is expected to expand 2.2 percent this year, compared with 2.7
    percent growth in 2013.

    “If the economy does not grow at levels around 7 percent … we are not
    going to be able to develop,” Malmierca said.

    “We have to provide incentives in order for them to come,” Malmierca
    said of foreign investors.

    Cuba is cut off from U.S. investment by a comprehensive trade embargo
    and has failed to meet its investment targets for each of the past five

    The new investment law continues the structural economic reforms under
    way in Cuba since President Raul Castro took over from his ailing
    brother Fidel in 2008. It has been anticipated since 2011, when Cuba
    enacted a 300-point overhaul of its domestic economy to encourage more
    private enterprise.

    (Additional reporting by Nelson Acosta, Rosa Tania Valdes and Marc
    Frank; Editing by James Dalgleish)

    Source: Cuba approves law aimed at attracting foreign investment – Yahoo
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