Cuba opens business ownership to emigrants: ‘Who is going to buy what you are going to sell? How will you finance it?’

The Cuban government, in the midst of the worst crisis in its history, is now admitting something it struggled for decades to accept: that if anyone can save the country, it is Cubans themselves. This week, the Official Gazette published a decree amending regulations that for years barred emigrants from becoming business partners in their own homeland.

A reform to Article 54 of Decree Law 133 makes this explicit: “Cubans residing in the national territory or abroad and foreigners with permanent residence in Cuba may be partners in micro, small and medium-sized enterprises and private companies with more than one hundred (100) workers.”

After years of ostracism, the question on everyone’s mind is what guarantees Cubans have to invest without the government later reversing this wave of reforms.

As Cuba struggles with a deepening economic crisis, compounded by the economic pressure and sanctions imposed by Donald Trump’s administration, President Miguel Díaz-Canel had already signaled a willingness to open the door to Cubans living abroad.

“To anyone who wants to build a future with Cuba, without seeking to impose anything on it, we say with our hearts on our sleeves: this is your home, and our door is open to you, because at this moment, this homeland cannot afford to lose a single good Cuban,” said the Cuban leader, shortly before the authorities announced their most far-reaching economic reform in years, a package of 176 measures.

The proposals grant greater autonomy to state-owned companies, authorize foreign investment by the private sector without government mediation, introduce greater flexibility in wage-setting and decision-making, and allow the creation of private banks. In short, it is the most radical shift announced on the island since 1959.

Some of those measures are already beginning to take effect, including one that allows Cubans living abroad to own private businesses or participate as partners or self-employed entrepreneurs. The requirements are minimal: applicants must be over 18, free of debts to the bank or the state, not hold a government post or position as a state official, and not be serving a sentence for crimes incompatible with the activity in question. Economists agree that the move represents a significant shift.

“It creates a legal mechanism so that Cubans residing abroad can participate in the country’s economic life,” says economist Ricardo Torres, a former researcher at the Center for Studies of the Cuban Economy and a professor at American University in Washington. “They are codifying that possibility in regulations, laws and decrees, which is important. It is no longer just a declaration of intent; it is being implemented through ministerial resolutions.”

Still, doubts remain about how safe it is to invest in a country where, ultimately, everything remains under government control. “The legal framework is changing, but a problem persists,” Torres says. “Ultimately, we know the judicial system is not independent. It is a system controlled by the Communist Party, so there will always be questions about how impartial it would be if a ruling were to run counter to the state’s interests. That’s a fundamental issue that creates doubt, uncertainty. The problem is not the regulation itself, but the administration of justice.”

What is undeniable, however, is that the rules due to take effect on September 9 represent one of the most significant transformations the private sector has experienced to date. Among other changes, they remove the previous cap of 100 employees per company without setting a new limit, and allow self-employed workers to simultaneously hold stakes in small and medium-sized enterprises or cooperatives.

“It is a transformation impossible to ignore,” Torres says. “Private companies can now be established without any limit on the number of employees, which had long been a key demand. They can participate directly in foreign trade; previously, they were required to do so through state-owned companies. They can receive foreign investment, become partners in small and medium-sized enterprises, and the range of activities open to the private sector has been expanded. This is a major boost for the private sector. The problem is that it is being implemented in a highly discretionary manner.”

Despite enduring a decades-long economic crisis that has worsened markedly over the past five years, the Cuban government embraced these changes only after Washington sidelined Venezuela as Havana’s main trading partner, restricted fuel shipments from abroad, and rolled out a steady stream of sanctions against officials and entities linked to the Cuban government.

Many of the measures adopted by Havana, several of them market-oriented in nature, are set to reshape parts of Cuba’s highly centralized economic structure. At the same time, the country’s leadership has consistently stressed its commitment to preserving socialism.

“The government is essentially reacting to circumstances,” Torres says. “There has been no serious, genuine or honest reflection on the part of the Cuban government or President Díaz-Canel acknowledging that the previous economic model does not work and that this is part of a transition toward a different economic system.”

A few days ago, during an interview with Brazilian journalist Mônica Bergamo from the newspaper Folha de São Paulo, the president said that the expansion of the private sector on the island was not a capitalist measure but “a concession.” Torres considers that “this is a very serious problem, because it indicates that if the situation improved for some reason in the future, we would return to the previous path.”

Another factor working against these measures, and limiting Cuba’s prospects as an investment destination, is the deep crisis gripping the island. A country without reliable electricity, with limited water supply, where people live according to the rhythms of the black market and face high inflation, is not particularly attractive to investors. Even less so given the sanctions the United States has imposed over the past year, which create risks that many would be reluctant to take on.

“It is very difficult to envisage a transformation of this type without connecting to the global economy,” says Torres. “That is why there is also such insistence on reaching some sort of arrangement with the United States. Because with the sanctions regime and the level of deterioration of productive capacities on the island, the private sector’s growth possibilities are limited. Who is going to buy what you are going to sell? How will you finance it? How will you bring in the money needed to invest? How do you mobilize it? And ultimately, what are the growth prospects for the economy?”

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