Cubans and Foreigners to Invest in Cuban State-Owned Companies

In a groundbreaking move, the Cuban regime announced Thursday that state-owned enterprises will be transformed into joint-stock companies, allowing Cubans both on the island and abroad, as well as foreigners, to purchase shares in these businesses. This includes potentially opening the door to investments in the military conglomerate GAESA.

Exiled Cubans immediately wonder: is it worth investing in a system lacking independent legal guarantees?

However, the regime, through its primary mouthpiece, the newspaper Granma, added a caveat: "Companies will need to be classified for this process."

This suggests that key enterprises, particularly those tied to vital industries and media, might remain inaccessible. The government further stated, "The State will determine its shareholding in economic sectors, ensuring its majority presence in strategic areas."

The regime also mentioned that non-state management forms and individuals could purchase shares, albeit gradually. Additionally, state-owned enterprises will have the option to buy shares in other businesses.

Major Political Figures Involved

Prime Minister Manuel Marrero Cruz introduced the proposal during the Third Extraordinary Session of the National Assembly of People's Power, held Thursday at Havana's Convention Palace. The session included virtual participation from Raúl Castro and the physical presence of Miguel Díaz-Canel.

The proposal comprises 176 transformation suggestions spread across 23 themes. Under Theme 2, regarding property relations, Marrero Cruz announced that state-owned companies' shares and properties could be bought by both state and non-state legal entities, national and foreign, as well as individuals, provided the funds' legality is proven.

Implications of the New Economic Measures

This marks the first time that any person or entity could become a shareholder in companies previously under exclusive state ownership. Among these is GAESA, the armed forces' conglomerate, controlling 40% to 70% of Cuba's economy, with assets projected at nearly $17.9 billion by 2024. It includes entities like Gaviota (tourism), CIMEX (remittances and commerce), TRD Caribe (foreign currency stores), and Habaguanex (Old Havana).

GAESA operates without publishing financial statements or undergoing National Assembly audits.

Encouraging Diaspora Investment

The regime also introduced an Investment Program designed to specifically encourage participation from Cubans residing abroad in Cuban companies, a novel approach that, despite recognition from some analysts, is met with skepticism.

Cuban-American entrepreneur Carlos Saladrigas, leader of the Cuba Study Group, warned that privatizations might become "piñatas" if done opaquely, similar to Russia's privatization, which favored a few. He acknowledged the parity in conditions for Cubans abroad and on the island but emphasized that serious investment requires fundamental political changes, judicial independence, and effective private property protection.

Economic and Legal Challenges

The announcement comes amid Cuba's worst economic crisis since the Special Period: industrial production in 2024 hit a 40-year low, housing construction fell below 1990s levels, and the GDP has been shrinking for years.

Marrero Cruz admitted that the failure to implement these transformations could lead to irreversible political and social consequences.

The implementation will affect more than 148 legal provisions in Cuba's legal framework and will necessitate drafting 32 new high-level regulations, including 10 laws, 14 decree-laws, and eight decrees, as reported by the regime to the National Assembly.

"The biggest risk isn't transforming too much, but doing it halfway," stated Congressman Carlos Miguel Pérez Reyes during the debate, capturing the tension between the crisis's urgency and decades of unfulfilled promises.