Foreign Investment Law no. 118, approved March 28 by the National Assembly, entered into effect June 30, with the intention of promoting economic growth in the country.

The new law provides financial and tax benefits to attract foreign investment, while respecting socialist principles and guidelines established for the updating of the country’s economic model.

On this basis, the new legislation will serve as a means of contributing to renovation and Cuba’s economic future, by providing a clear, transparent legal framework for investors, which should encourage international confidence.

During the discussion and approval process, the National Assembly reiterated that promoting international investment does not, in any way, mean that the country is for sale, since the participation of foreign companies in Cuba’s economy is based on the protection of natural and human resources, and respect for national sovereignty.

The law establishes parameters for joint ventures, for the signing of economic association contracts, and for entirely foreign-owned enterprises.

It also provides for the total or partial transfer of state property for its development, in exceptional instances, if deemed useful or necessary.

The framework explicitly outlines complementary regulations and norms to provide investors with guarantees and legal security, to promote the entrance of foreign capital and its optimal use.

Law no. 118 is based on the conception of foreign investment as a source of development, in areas identified by the country, in specific sectors and economic activities considered fundamental to projected plans for development in the short, medium and long term.

Investment is to be oriented toward the diversification of imports; increasing access to advanced technology; and substitution of imports, with priority given to food production and processing; generating employment; the development of chains of production; and transforming the country’s energy production and consumption profile.

The law states that foreign investment is permissible in all sectors, with the exception of heath care services, education and the armed forces, although related enterprises may incorporate capital from abroad.

A portfolio of investment opportunities will be approved by the Council of Ministers, based on an evaluation of projects of national interest, or of special importance to a given sector.