The Cuban Council of State called an extraordinary session of the National Assembly in order to debate and approve a new foreign investment law on Saturday, March 29, the state-run Granma newspaper announced Wednesday.
The new law is meant to replace that current cumbersome 1995 law that requires foreign companies to pay both a profit tax and a labor tax and is seen as a part of massive reforms taken under President Raúl Castro to aid the ailing Cuban economy. Along with the upgrading of the Mariel Port and the creation of the Special Development Zone that will exempt businesses from the 12 percent profit tax for 10 years, the Communist Party Congress approved over 300 economic reforms in 2011, including moving 20 percent of state workers into the non-state sector and authorizing the sale of homes and cars.
While details of the law remained unclear, it is expected to make Cuba more attractive to investors who have pulled out of the island over the past 12 years due in part to Cuba’s burdensome tax system. Cuba’s economy only grew 2.7 percent in 2013, and with its commercial relationship with Venezuela at risk due to ongoing protests in the South American country, the Cuban economy could contract 4 to 7.7 percent this year.