Cuba Business and Trade Opportunities
Background to Cuban Business
For decades during the Cold War, trade with Cuba was heavily restricted, but today many countries enjoy trade links with this Caribbean island.
When trade restrictions are discussed in the Western media, a lot of focus is put on the U.S., but the US is not, of course, the only country that can trade with Cuba.
Many British travellers have been enjoying holidays in Cuba for many years and some companies have also done well from Cuban exports.
Cuba offers opportunities for export opportunities to many countries, although, to date, tourism has been one of the leading sectors which have been the most easily accessible to companies outside of Cuba.
In addition to the services industry, the island is mineral-rich with heavy deposits of ores and metals such as iron, copper, gold and cobalt.
As such, Cuba has attracted a number of construction and mining firms as well as those in the IT and engineering industries that can benefit from its resources.
Tourism is a market where Cuba has blossomed with the island and popular destination for both backpackers and honeymooners.
For years, the island was a bit of a mystery and as such, there is great interest in the island, as well as its culture.
Such interest has seen Cuba have the highest rate of tourism growth over the past decade out of all the countries in the Caribbean.
As a result, real estate has also made a strong foothold on the island with health spas and hotels catering to the tourist population.
The timing for starting and doing business with or in Cuba and capitalising on what the country has to offer, is perhaps perfect.
What you need though is to analyse the specific restrictions for trade according to your own home country. Restrictions for those of you in the United States, for example, mean that you need to consider a rule such as the Cuban Foreign Investment law #77 allowing for 100% foreign ownership (see our reports by country on trading with Cuba in the business and trade section).
If your business deals with ores and metals such as cobalt, nickel, iron ore, chromium, copper, gold, salt, timber, silica or petroleum, Cuba could be an ideal country for you and one which is perfect for doing business with.
Other businesses that could benefit from developing business ties with Cuba include travel and tourism, real estate, IT, biotech, and agriculture, all of which are sectors that the Cuban government is keen to develop.
Tourism as already mentioned is one sector that is particularly growing, with Cuba recording the highest growth rate of tourism among all the Caribbean countries over the last decade.
The labour force within Cuba is also highly skilled in the IT and Biotech industries and could be ideal for companies looking to set up an international office in Cuba.
The opportunities for trade with Cuba though are certainly going to change according to how the U.S. changes do not change the existing rules and regulations and some foresight is needed for the higher risk but what should be the most profitable opportunities.
Cuba has a fantastic health system and one of the highest literacy rates in the world.
The I.T. infrastructure though is poor and this certainly offers a significant opportunity should the U.S. restrictions change.
Thoughts
My own thoughts on what to watch in terms of business opportunities for the future:
1. Oil and Gas
Cuba has lucrative oil and gas reserves in offshore reserves and has negotiated deals with international companies in Spain, India, Malaysia and Norway to extract them.
The oil and gas sector is a very strong investment opportunity as it is a key priority for Cuba in order to have energy exports to sell.
2. Tourism Investment
Tourism is one of Cuba’s biggest markets and it is no surprise to learn that almost half of the country’s hotels and resorts are foreign-owned.
Airlines, travel agents and resorts all have investments in Cuba, but individuals can do so too by buying property such as apartments and houses to rent to tourists.
It is a growth sector and with rumours that the US travel ban could be eased in the near future, it is one that could soon see an influx of new tourists.
3. Agriculture
While crops such as maize and potatoes are important to Cuba’s economy, there is one product that has become increasingly lucrative – ethanol plants.
As more countries look to diversify their energy supplies, Cuba has been developed its biofuel production to satisfy the energy needs of its own businesses as well as foreign ones.
Sugar and citrus fruit production is also extremely important, and Cuba has negotiated many deals with Brazilian and Israeli firms for investment.
Extra information:
- If you are travelling to Cuba for business then flights into Havana are your most likely entry type. Learn about flights to the islands.
