The guest of the Cigar Portal is businessman Sergey Nyrkov, a member of the ICC, who has just returned from Cuba.
- Sergey, you devoted the last ten years of your life to Cuba. Cuba reciprocates?
- Before I was engaged only in cigars. Now mostly coffee. Del Rio, my company, supplies Cuban coffee Cubito to Russia.
- They drank, drank - both regular and cigar - Montecristo, Cohiba ...
- That's us too. All Cuban coffee, i.e. We are 100 percent of Cuban coffee exports to Russia.
- What do Cubans value most in business?
- As in all business - efficiency, that is, access to the production of a product, making a profit. But the main thing for them is still a sincere attitude towards Cuba. I saw many businessmen who came with the desire to make quick money. Cubans in this case treat the person with great wariness. The main thing is the quality of the partner, how honest he is. They don't care how cool and rich you are. What matters is whether you inspire confidence.
- I remember a story when you were received by one of the top Cuban leaders, and a well-known Russian businessman who had flown to Cuba on his plane had been sitting in his waiting room for an hour.
- It's indicative. If the Cubans believed in you, understood that you are a friend, then the doors of many offices open to you as if by the wave of a magic shelf. I try to do business in Cuba with love for Cuba. First it is this, and then profit, loss.
- Loss?
- Do not be surprised, it happens in Cuba. Something must be done because it is necessary, and not because it will bring money. That's why I say - it's more like a friendship than a business in the classical sense of the word.
- You have been to Cuba many times in recent years. How is the Cuban economy changing?
- Outwardly - very strong: a lot of private businesses are opening. In the field of trade, tourism services, in the agricultural sector - you can take land, grow tobacco, coffee, but hand over the product to the state at prices set by it.
- That is, by opening up to private initiative, Cuba retains state control?
- This is the most fundamental difference between the Cuban economy and ours, for example. They don't want a repeat of our experience. State control is quite strict. And here the reason is not only the unwillingness to lose economic control. They want to remain a welfare state, they want to maintain a balance between public and private. They are afraid of ideological erosion.
- A difficult task - a private trader will always want to work primarily for himself. And the Cuban here, most likely, is no different from the Russian, German, American. Agree?
- I don't know, Cuban, maybe not different. But the Cuban state is different. It seems to me that they are smart enough not to repeat the bitter experience of Russia. But their economy will be different, unlike ours. Maybe there will be more capitalism, but not wild, but like this - Swedish, Finnish, in general, human.
- Let's hope, although it will not be easy to do.
- Well, well - over the past 20 years, Cuba has repeatedly refuted dozens of predictions from both the right and the left. And it remained Cuba - the same as it was when you and I still went to school.
- Now about the cigar. Every time you come to Cuba, you visit your friend - Irochi Robayna ...
- Before - Don Alejandro and Irochi, now Irochi, the head of the House of Robina ...
Did you get out this time?
- On your birthday. Irochi had, as usual, a large international company - Americans, French, and someone else. In my honor, one Cuban arranged a small concert - songs with a guitar. Then I played. You know, I once traveled around the country with concerts. Then I did not know what to do - write poetry, give concerts, play in the theater. But he went into business. When I sang with Irocha and began to return the guitar to the Cuban, he refused: no, Sergey, - he said, - I can’t perform after such a professional. It was nice.
- What's new with Irochi?
- He has a new homemade cigar. The format is fantasy - a little shorter than Robusta and a little thicker. I brought it for you to try. Another new feature of Irochi is that he develops his foreign contacts. Recently I was in China, soon going to Hong Kong. He is not traveling alone - together with Ernest Milanes, this is the world's most famous Cuban creator of author's humidors, a friend of Irochi, they live nearby.
- Good company - the world's most famous Cuban tobacco farmer and the most famous Cuban humidor maker. Will they come to us from Hong Kong?
- I would suggest another option - to invite Irochi and Milanes to the Central Cigar Event 2014. Irochi with his cigars and Milanesa with his humidors. They are in the collection of Depardieu, Denis De Vito, many cigar makers in the world. Now they can appear in Russia.
- Good idea, let's think about it.
Andrey Loskutov
300 sunny days a year, +25 degrees average annual temperature, long sandy beaches, gentle waves of the Caribbean Sea - this is the Republic of Cuba. Liberty Island is famous not only for its climate and nature. Here, one of the highest life expectancy in the Americas, and the lowest infant mortality is the result of free and qualified medical care. But the Cuban standard of living is 30 years behind the world. Computers, cell phones and other gadgets have become available to the population only since 2008. Cars are a luxury unaffordable for many, some products are distributed on cards. More recently, private enterprises have been legalized. The rules for the admission of foreigners have become softer. Cuba cannot be called a very popular destination for Russians to emigrate. But the mild maritime climate, the cheapness of life, and sometimes nostalgia for the socialist past attract new settlers to Liberty Island.
How to emigrate from Russia to Cuba and what are the benefits of residence
The Cuban Republic is a rather closed state. It does not offer any immigration programs for migrants. Foreign citizens wishing to live in Cuba for more than 3 months are required to obtain a residence permit. In legal language, the document is called a residence (Residecia).
immigration routes
For Russians, there are several options to become a resident of the Island of Freedom:
The only accepted refugee in the entire history of the Cuban Republic is Comandante Ernesto Che Guevara, born in Argentina. In 1959, by presidential decree, he was proclaimed a citizen of Cuba and endowed with all the rights of a native Cuban.
It is almost impossible for a foreigner to obtain Cuban citizenship. Officially, only those who were born on the territory of the state or who have islander ancestors are recognized as Cubans. But officials still need to prove their pedigree.
How to go live in Cuba
Under an agreement between Russia and Cuba, there is a visa-free entry for tourists for 30 days. A passport, a migrant card, a travel agency voucher are enough to enjoy life on Liberty Island for a month. Then you can extend the pleasure. To do this, apply to the Migration Service with an application and pay 25 CUC (Cuban convertible pesos) for every subsequent 30 days. The maximum stay is 90 days. Another extension option: when the visa-free period ends, go to the nearest country with free entry (Dominican Republic, Costa Rica or other Latin American countries), and then return to Cuba. You will be entitled to an additional 30 days without a visa. Only air tickets are likely to cost more than the fee for the usual extension of stay in the country.
When entering Cuba, they will not take money from you, but when leaving the country, you will have to pay 25 CUC for parting - this is an aviation tax. Since 2015, it is usually included in the cost of the flight.
A foreigner with a tourist visa is a guest. Cubans are very hospitable, but for outsiders there are different rules of life and even a separate currency. Cuban peso (CUP) for internal use, this is money for settlements between local residents. Convertible pesos (CUC) - for visitors. Cook costs about 23 times more than a regular peso. Buying goods in CUP is much more profitable, but their range is very limited, store shelves do not please with variety. In Cuba, imported products and things are in short supply, and sometimes domestic ones. For convertible pesos (CUC) you can buy goods that are not available to ordinary Cubans. For foreigners, they also build special comfortable housing - condominiums. It is not cheap, not only by local standards. But those who bought or concluded a long-term lease agreement will be able to apply for a residence permit (residency) for a year, and then renew it. That is, he will not become a guest, but an almost full-fledged resident of the Island of Freedom.
The Republic of Cuba has a system for distributing products by cards (Libreta). The local population can purchase rice, beans, butter, powdered milk, sugar and other vital products in special stores at very low prices.
Benefits of Resident Status
The status of a temporary resident allows a foreigner to receive free treatment and education. However, it limits the purchase of vehicles, real estate and does not give the right to do business. Permanent residence removes all restrictions. This is an opportunity to receive social benefits due to the citizens of Cuba, to acquire everything you want, and even count on state support in doing business.
Video: first impressions of Cuba
Types of residence for Russians
The Cuban equivalent of a residence permit is a residence. The document differs on the grounds for obtaining and validity period.
Temporary residence (similar to residence permit)
Temporary residence (Residecia Temporal or Carne) makes it possible to legally reside in Cuba for at least 3 months. It is received for the period of study, treatment or for the period of a work contract. This document does not allow you to purchase real estate and a car on the island or engage in business. But it saves from military service and gives the right to free treatment and education.
Grounds for obtaining a temporary residence:
Permanent residence (similar to permanent residence)
Permanent residence (Residencia Permanente or Carne de identidad para extranjeros) is not limited to any period and in fact is very close to citizenship. But getting this document is not easy. The basis for its issuance are family ties, including marriage, as well as a contribution to the state's economy in the form of investments in real estate. A foreign citizen can purchase cars, houses, engage in entrepreneurial activities. However, even a permanent residence must be periodically confirmed, but this procedure is simpler than the initial registration.
Cuba maintains a patriarchal way of family life. Local residents are very jealous of the distribution of roles in the family. According to men, the duty of a wife is to work at home and take care of children, even if she works and earns no less than her husband. Married women cannot rest separately from their spouse. And he has the right to spend leisure time with friends.
Grounds for obtaining a permanent residence:
Cuba has a peculiar attitude towards pets. The islanders do not favor cats, they usually live on the street. But dogs are pets and family members. Almost every house has one or even several friends of a person. It is considered prestigious to have a thoroughbred dog. Furry chow-chows, huskies or samoyeds are especially fashionable now. Tiny Chihuahuas are always popular.
Video: Cuban life - reality without embellishment
How to get a residence (residence permit)
It is not so easy to get a temporary, and even more so a permanent residence of the Republic of Cuba. Verification of documents takes a long time, the bureaucratic machine works slowly. Representatives of the authorities are obliged to respond to the foreigner within six months after the appeal. It is impossible to speed up the process by any illegal means. Corruption in Cuba, as the country's experts assure, is practically non-existent.
Where to go
Documents for obtaining a residence must be submitted to the consular department of the Embassy of the Republic of Cuba in Moscow, as well as to the offices of the migration service in Havana or other administrative centers at the place of future registration. But since the issue is being resolved for a long time, and the legal period of stay in the country is limited to 3 months, a potential resident of the Island of Freedom will most likely have to wait in Russia for an answer.
Who has the right to move to live in Cuba, and who can be denied
A foreign citizen who has grounds for obtaining a temporary or permanent residence has the right to submit documents. But the Cuban authorities can refuse the applicant without explaining the reasons. Negative answers to foreigners, especially Russians, are rarely given. The group of refusers may include:
Basic documents for obtaining a long-term visa or residence
Each basis requires its own package of documents. You have to submit everything together. The migration rules of the Cuban Republic have recently been changing in the direction of mitigation. For example, this concerns the procedure for legalizing foreign documents. Under the new rules, this is not mandatory for Russians. In order not to make a mistake when collecting certificates, it is better to consult in advance at the Cuban embassy. Employees of the migration department will tell you exactly what documents are needed and how much the registration will cost.
For all types of residence, you will need to provide a basic set of documents:
To marry a citizen of Cuba, you must attach a certificate stating that you are not married or a certificate of divorce or death of your spouse.
To stay in the territory of the republic for a business purpose, among other things, you will need:
For a study residence, you must provide:
For a visitor visa, an invitation from a representative of the Cuban side, certified by the authorities, is additionally attached.
All documents must be translated into Spanish and certified by a notary. If the translation is done at the Embassy of the Republic of Cuba, notarization is not required.
Video: the economy of the Cuban Republic - new perspectives
Features of emigration for minors and pensioners
If you plan to travel to Cuba with a child of one of the parents, you will need to obtain a notarized consent of the other parent. If the minor is traveling with any other relative (for example, with a grandmother), you need to draw up and certify the consent of both parents.
Cuba is a good place for retirees. Even a Russian, while on a well-deserved rest, receives a fairly significant by Cuban standards, and most importantly - a stable income. The average salary on Liberty Island is around $20 and unemployment is high. At the same time, medical care is free and of high quality, prices are low, and the climate is warm. For pensioners, no special documents are required to register a residence upon marriage. And the Cuban authorities usually do not prevent the elderly relatives of a permanent resident from moving to the island, especially if they need treatment. But then documents confirming the state of health will be required.
The medical system of the Cuban Republic is recognized as one of the most efficient in the world. For the local population and permanent residents, medical care, including dentistry, is free of charge. For foreigners it is inexpensive compared to other American countries and Europe. Patients with severe or rare ailments come to Liberty Island for healing. And the Republic of Cuba regularly sends medics on a humanitarian mission to South America and Africa.
Responsibilities of a Resident
Obtaining the status of a resident of Cuba provides not only advantages, but also imposes obligations on a foreign citizen. The main one is to comply with the laws of the state that adopted it. He must notify the Cuban authorities of the change of residence in the country. He is obliged to live on the island for at least a month a year (possibly in total). Otherwise, residences can be deprived forever. The same punishment will follow for conducting illegal business.
You can extend the residence at the offices of the migration service at the place of residence.
The cost of documents
The amount of the consular fee for issuing a business, guest and student visa is 30 CUC or US dollars. The cost of translating documents into Spanish depends on their number. Russians who translated all the papers at the consular section of the Cuban embassy report that the average price is about 12,000 rubles.
Lack of Cuban citizenship
Cuban citizenship cannot be acquired by someone who was not born on Liberty Island or who does not have Cuban ancestors. But babies born in families of foreigners who temporarily live in Cuba automatically become citizens. And the authorities of the island will consider them their own, even if they do not need it.
Such Cubans, like all indigenous people, will need special permission to enter and exit the island. In order to avoid problems with migration officials, the embassy issues a special certificate of the absence of Cuban citizenship. This document must be taken on every trip to Cuba.
Video: history and future of Cuba
1. There is only one word that can describe everything that is happening in Cuba today - "we are waiting." Everyone in Cuba is waiting for something. Cubans are waiting for a passing car to get to work, they are waiting for food cards to be bought, they are waiting in numerous queues at shops, hospitals and government services, front-line workers are waiting to be given the right to buy a car, the most active Cubans are waiting to be given the right to leave the country , of course, everyone is waiting for the end of the working day so that they can go outside and start waiting for a ride that will stop and drop you home.
2. Everyone is waiting for at least some changes. A year ago, I applied to the US Embassy in Havana (there it is called the Mission of US Interests) with a request to extend my American visa - I was offered to wait 1 year and 8 months to come for an interview with the consul - before he had all the days scheduled.
3. Cuba is the most popular and largest island in the Caribbean. Often referred to as the "Pearl of the Caribbean" because of its beauty, Cuba boasts hundreds of miles of stunning landscapes, majestic mountains, spectacular landscapes and magnificent cities. There are more than 300 virgin beaches, bays and bays, surrounded by the most beautiful crystal clear waters of the Caribbean Sea - all this has always been the main advantages of the island.
4. People in Cuba are warm-hearted, hospitable, fun-loving, have a good sense of humor, they know how to enjoy life and often get together to sing and dance. Cubans are extremely amiable and kind people. They are friendly, responsive and always ready to help. Often this is perceived as a desire to earn a tip, but in most cases this is not the case. Cuba has a unique "two-tier" currency system. For Cubans in the country, one price, for foreigners - others. It's an idiotic system, but everyone knows that Cuba's entire economic system is one. The same services in Cuba cost differently for Cubans and foreigners. The official difference between the national peso and the convertible is 24 times. Accordingly, if you are a foreigner, then all services cost 24 times more for you than for Cubans. Of course, if you are not a tourist, but live in Cuba permanently, you will learn to bypass this system, but only where possible.
5. Currently, tens of thousands of foreigners live permanently in Cuba. There is no law in Cuba forbidding foreigners to live there, and living well in Cuba is not difficult, you just need to know how to do it and accept some Cuban specifics. For more than 15 years, many Canadians and Europeans have been spending the winter months in Cuba. There are about 300 sunny days a year. The mild climate suits most people and life expectancy on the island is higher than in most developed countries. The healthy lifestyle of Cubans is simple and low-calorie food, sports and physical work, the cheerful disposition of Cubans, as well as advanced Cuban medicine.
6. I talked with many foreigners who permanently live in Cuba, mostly European pensioners. All of them are quite satisfied with their lives and happy, because Cuba can give a lot of things that no other country in the world can give. Of course, Cuba has not yet become a place of general immigration, but for a certain kind of people this place can be damn interesting. Cuba is one of the safest places to live in the world, and besides, here your personal life really remains private (if you are not engaged in espionage and are not involved in activities that harm Cuba, the Cuban authorities will not be interested in you at all). Cubans are incredibly friendly and the Cuban police are incredibly accommodating. In Cuba, you will never see police pressure, armed robbery, rape, violence or a hostile atmosphere. For 2 years of living in Cuba, the police never fined me, although, of course, I violated the rules.
7. Now in Cuba, small businesses are starting to take their first steps, foreign investment is widely welcomed, which means that Cuba is ready for entrepreneurship. Since the investment laws have been relaxed, Canadians and Europeans have been investing in the country. The new investment law allows foreign businessmen to own their own businesses, offices and housing. Cuba has left the Cold War behind and is now ready to participate in shaping the global economy. Very soon, a gold rush may begin in Cuba, and hordes of entrepreneurs from all over the world will begin to fight for spheres of influence on the island. In Cuba, you will have to deal with only one partner - with the state. You can adapt to the Cuban economic system. I have met many people who have done this. There are many foreigners in Cuba who have started successful businesses. Of course, you need to spend time and learn how to work in the conditions of the Cuban economic system. Many laws in Cuba are completely idiotic, but the good news is that the laws are enforced and there is almost no corruption (small gifts to officials do not count) and once you figure it out and pass these Cuban idiotic laws, you can work there.
8. Cuba craves investment and foreign investors are welcome almost everywhere. An additional advantage for foreign investors is a highly educated and disciplined workforce, huge untapped tourism opportunities and improved infrastructure. The most important thing is to understand how everything works there. Be prepared that this may take years. You don't need to be delusional. I know dozens of people who have been trying to do something in Cuba for many years, but they have not succeeded. In addition, in Cuba you will have only one partner - Cuba, and if you do not agree with him, you will have nothing else to do in this country.
9. In Cuba, as in any other country in the world, it is important to wait a bit and understand how to live and work better. I have met many entrepreneurs who came to Cuba hoping for a quick win. As a rule, their undertakings ended in disappointment. Although conditions for investing and living in Cuba are improving, no one can predict the future with absolute certainty. I know many people who have been predicting the liberalization of the Cuban economy for 20 years and are still waiting for it to happen. How many times has Fidel Castro been buried on the Internet? New Cuba is a few condominiums in the center of Havana, which are built to European standards in places such as 5th Avenue, Marina Hemingway, Havana Club or the Malecon. Apartments in such houses are freely sold and bought by foreigners, while prices are among the most expensive in the Caribbean. Foreigners are not yet allowed to acquire other Cuban real estate.
10. The main problems that face any foreigner in Cuba: food, internet and transport. There are no supermarkets in Cuba with products from all over the world. The choice of food is limited and imported food is very expensive. The diet of Cubans is beans, rice, chicken and pork. Even in the most expensive and modern stores in Havana, such as the Palco supermarket, you will rarely find more than 2 types of cheese, 3-4 types of canned food, 1-2 types of yogurt. For fish and vegetables, you need to go outside of Havana - to the villages. It is interesting that in the conditions of a total shortage of normal products, there are several restaurants in Havana with excellent world-class cuisine. The biggest problem in Cuba for a modern person is Internet access. It's super slow, super unreliable, and super expensive. Buying a car in Cuba is almost impossible. I wrote about this 2 years ago.
11. In the end, these items can be discarded if they are not very important to you. In many other ways, Cuba is a hell of a place to live. Here is a wonderful climate, friendly people, security, good medicine (certainly not the best in the world, as many say, but still not bad) - life can be very measured and calm. In Havana there is a magnificent private school International School of Havana - children from all over the world study here and the University of Havana, which is almost the oldest university in the Western Hemisphere. Who mostly lives in Cuba now? Of course, there are many elderly Europeans here: they have married young Cubans, have small children and enjoy the warm climate and everyone's attention and care. The European pension is quite enough for a very decent life in Cuba. In addition, many people live here who want to give their children a good education. Recently, there has been more and more talk about how Cuba is the best place in the world to conduct your business around the world in confidence. Unlike the US and Europe, no one here will stick their nose into your affairs. Hemingway always chose the best places to live. Paris, Spain, Key West, Cuba. He was constantly hounded by the FBI and the IRS, and this bullying eventually killed him, as it killed Joe Louis, Woody Herman, and other American heroes. He loved Cuba, loved his home in Cuba, but under pressure from the US government, he was forced to give up his home and go live in the US. There is compelling evidence that this move killed him: FBI allegations of communist connections drove him to suicide. If Hemingway had stayed in Cuba, he would have lived another 20 years.
12. And one more thing - if someone is chasing you and you want to find shelter, Cuba is perhaps the best place for this. Even for those with the most incredible tastes and lifestyles, Cuba has something to offer. In June 1998, the Miami Herald published the following statement about American baby boomers: “There will be a mass immigration of retirees who are attracted by the low cost of living, in which it is easier to live on their small pensions, reasonable prices for medical services and a warm climate. Due to its proximity to the United States and its low degree of industrialization, Cuba will become the most popular place to retire."
Outcome. Cuba is incredibly beautiful. Great cigars, great rum, beautiful women, entertainment. There is a special attitude towards foreigners here, and it has always been like this - even before the revolution. It's very safe here. Cuba has great prospects in the field of small business development. Here you can live comfortably and give your children a good education. Unfortunately, a lot of things here (almost everything) are organized through the ass. If you're willing to put up with it - Cuba can be a great place for you to live.
At the end of January 2016, the US Department of Commerce, together with the country's Ministry of Finance, published amendments to the rules for doing business with the Republic of Cuba. These amendments lifted the ban on payment and financing of permitted exports/re-exports to this country, excluding raw materials and agricultural products. Recall that in 2015 Cuba was excluded from the list of “terrorist countries”, and the US Secretary of State John Kerry personally visited Havana, where he opened the American embassy, which stopped working in 1961.
President of the U.S.A Barack Obama in his annual message to Congress, he declared the need for a complete lifting of the embargo on Cuba: “Fifty years of isolation of Cuba have not been able to advance democracy, weakening our position in Latin America. That is why we have restored diplomatic relations, opened the doors to trade and travel, and taken a stand aimed at improving the lives of the Cuban people. Do you want to build trust and leadership in the hemisphere? Recognize that the Cold War is over. Lift the embargo."
The President of France also called for the complete lifting of the US embargo Francois Hollande, who stressed that "President Obama must, and he himself said this, go to the end and put an end to these remnants of the Cold War."
Island of freedom for business
Despite the fact that the complete lifting of existing sanctions is still far away - the US Congress is quite critical in this regard - the market has received clear signals that the country is gradually moving towards capitalism and market relations. Perhaps today is an opportune moment to have time to gain a foothold in a growing market. Moreover, in the spring of 2014, a law on foreign investment was adopted in the country, which greatly simplified the rules for doing business on the Island of Freedom. Article 1.1. of the law states: "The purpose of this law is to create in our country a legal platform for foreign investment, based on respect for the rule of law, sovereignty and national independence, as well as mutual benefit, in order to promote our economic development towards a prosperous and sustainable socialist society." In particular, the law halved income tax (from 30% to 15%), and also gave investors the right not to pay it for eight years. True, this applies only to joint ventures - companies with 100% foreign capital are deprived of these privileges. Cuba is still far from achieving the goals outlined in the law.
"If you are thinking about investment in the Cuban economy, you must understand a few things. Firstly, in this country, in many respects, the situation of post-Soviet Russia is now - with all the pluses and minuses. That is, a planned economy, bureaucracy, corruption, the underdevelopment of almost all sectors of the national economy, stuck in the 1980s of our history. These are the cons. Pros - a huge number of niches in which you can develop. The authorities have set a course for economic development, and they understand the importance of foreign investment, so they will create quite acceptable conditions for their arrival and the inflow of their money,” he said. Daniil Kirikov(pictured), Managing Partner Kirikov Group.
The most interesting thing is that it is the similarity of our history that makes this country very promising for Russian investors who are familiar with the “Soviet mentality” and who can get along with it. As the expert has already noted, all sectors of the Cuban economy are promising to one degree or another, as they require specialists, technology and money. Therefore, there will surely be those who want to stake out a promising direction for the future there. “First of all, this cooperation will be interesting for our travel companies and agricultural producers - the supply of products from this country can replace a number of goods subject to sanctions. Russian mining companies are also showing interest in Cuban oil. For example, the Scarabeo 9 project was built specifically for Cuba, without the use of US patent technologies - in order to avoid US sanctions on companies participating in the project. So our oil companies can make a fuss - Gazpromneft And Zarubezhneft already presented in this country. Cooperation in the field of energy and electricity production seems to be real. More than 40% of the existing power plants in Cuba were built with the help of Soviet specialists, based on Soviet production,” says Daniil Kirikov.
Small business is not interested in Cuba
Could the yet-to-be-anticipated “Cuban economic miracle” be a goldmine for the retail investor? This is where the difficulties begin. Yes, Cuba is interested in large investment projects. In 2014, the document "Portfolio of Business Opportunities for Foreign Investments" was published, which lists 246 investment projects in various sectors of the economy (from sugar and buffalo milk production to renewable energy and biotechnology) that have already been approved by the state. But the cost of an "entrance ticket" to these projects starts from $2 million, which, you see, significantly limits the range of applicants for these assets, in relation to individual investors.
This implies the main problem that lies in wait for a private investor - the complete absence of a stock market in Cuba. That is, portfolio investments already familiar to many of our fellow citizens (for example, the acquisition of a minority stake in a company of interest) are impossible in principle. Only direct investments remain, as a rule, implying the direct participation of the investor in the business. At least at the launch stage.
Despite the fact that the declaratively new law on foreign investment implies that you can register your business in Cuba even for a private foreigner, in fact, a potential investor needs to acquire a business partner - a company or a citizen of this country. But even in this case, obtaining all approvals and permits may take more than a year. Without the coveted Certificate of Registration, you will not be able to legally purchase even a mobile phone, not to mention transport or office real estate.
But even after breaking through the bureaucratic obstacles, the investor cannot breathe a sigh of relief. This is how our interlocutor, who lives in Cuba, describes the unsuccessful attempts at private investment known to him. “If we talk about officially registered small businesses (with the permission of the authorities to open an office), then in the end most of them were liquidated. Most of these stories are with travel agencies. Almost all of their owners eventually come to the conclusion that it is unprofitable to keep their office in Cuba. It is much easier to work through a state operator. More precisely, personally through some of his employees, let's say, "interested" them. Another problem is the difficulty in coordinating projects with the Cuban authorities. So one of the projects for the construction of a hotel in Havana was curtailed. The investor abandoned it after five years (!) of correspondence with various government agencies. The most frustrating thing about trying to do business in Cuba is that the rules of the game change at any moment. For example, a couple of years after the creation of a kite station (kite surfing is a sport where an athlete uses a kite to glide through the waves on a board - executive.ru) in one of the resort areas, the Cuban partner decided that he now wants to receive 80% of the profits. The government supported him."
Obviously, investments in small business in Cuba are the lot of enthusiasts and those of our compatriots who have decided to fully connect their lives with this state, for example, to move there for permanent residence.
Real estate: assets or dead weight?
Another option for investing in Cuban assets, more accessible to a retail investor, is the purchase of real estate. Indeed, more than 3 million tourists visited Liberty Island in 2015, and the easing of the US lockdown is sure to add a tangible share to this tourist flow. At least as early as May 2016, it is planned to launch tourist routes (cruises on ocean liners) from the USA to Cuba.
Will apartments on the Island of Freedom be a good investment? There are several nuances here. First, when acquiring such assets, you must remember what, in fact, began the international isolation of the country - with the expropriation and nationalization of foreign property in 1960. If the prospect of a repetition of such a situation does not frighten, then you will either have to fork out or get ready to go through a long procedure. Secondly, foreigners can legally purchase real estate on the island only in a few residential complexes that are being built by foreign companies: the choice is limited, and the cost of such apartments is comparable to the cost of Moscow ones (from $1,200 per sq.m.). To find cheaper real estate, you will have to contact local realtors. That's just the citizens of Cuba are forbidden to carry out such transactions with foreigners. In this case, the potential buyer has only two options: either obtain a residence permit (for example, by marrying a citizen of the country) and conclude transactions with this document, or buy real estate for a figurehead - a Cuban who will be the nominal owner. For obvious reasons, this option carries high risks.
In other words, the opportunities for "private traders" on the Island of Freedom are very limited. Despite Cuba's gradual movement towards an open economy, only large institutional investors will be able to participate in the division of this pie, at least at the initial stage.
“Yes, the Cuban authorities are interested in foreign investment. But our authorities now would like more citizens to invest in the Russian economy. In extreme cases - in banks for a deposit. In our country, investing for individuals comes with so many complexities – from a limited number of assets to low financial literacy – that such investments are extremely difficult, not to mention Cuba. So now we are talking more about "bison": the same "Zarubezhneft" and similar companies. Interest may also be shown by our billionaires, who are ready to consider such projects as part of the transfer of funds from the EU, where anti-money laundering laws are now being tightened,” summarizes Daniil Kirikov.
Photo: freeimages.com, Kirikov Group
For business, Cuba is a pristine and promising market. Only last year small and medium-sized businesses were legalized there. The number of foreign tourists on the "Island of Freedom" is growing rapidly, and international corporations are just starting to work. If you intend to do business in Cuba - consider four important nuances.
Companies without a face
The legislation of most countries of the world considers companies as separate legal entities with guaranteed rights and obligations. It is the legal entity (and not its employees) that is liable in case of bankruptcy and violation of the law.
In Cuba, things are different. You can start a company there, but the entire responsibility for its actions lies entirely with the owners and employees.
good old cooperative
Of all the forms of organization in Cuba, the closest to us is. This is an enterprise with a special legal status. Initially, cooperatives could be created only in the field of agriculture, but now the country's authorities are extending this practice to other industries.
The main advantage of a cooperative is tax benefits. This form of organization does not provide legal protection - owners and employees still bear responsibility. But the modernization of the country continues and further liberalization of laws is possible.
Disenfranchised foreigners
Aliens in Cuba formally have the right to legal protection, but the country's Constitution states that the interests of the state are higher than the rights of the accused. In addition, most Cuban lawyers work in state law firms - colectivas, and your lawyer will most likely be a civil servant.
You can hire a private lawyer, but he does not have the right to represent you in court, only to give advice. This does not mean that a fair trial is not possible in Cuba. But it is better to consider legal features before they become a problem for you.
"Unfair Enrichment"
An unexpected and sometimes insoluble problem for foreign entrepreneurs in Cuba may be laws against so-called "unfair enrichment." They are based on a provision in Roman law: nemo locupletari debet cum aliena iactura ("no one shall benefit at the expense of another"). A Cuban entrepreneur can be held liable for unfair enrichment, whether or not it was intentional. The problem of income inequality is still acute in the country and it is necessary to touch this topic with the utmost care.
Of course, the risks for foreign businessmen and investors in Cuba are still high. But this is true for any new, growing market - and high risk promises a good reward.
