Starting a business in Cuba: foreigner's guide (2026)

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.