Cuba Lifts Cap on Private Businesses, Allowing Expansion Beyond 100 Workers

This Wednesday, the Cuban Council of State introduced Decree-Law 133 of 2026, a significant legislation that lifts the previous cap of 100 employees for private businesses, thereby legally acknowledging the existence of larger enterprises.

Issued on August 19, 2026, this decree was published in the Official Gazette of the Republic of Cuba No. 71 Ordinary of 2026. It amends Decree-Laws 88, 89, and 90 from 2024 and becomes effective immediately upon publication.

This regulatory shift is the legal manifestation of one of the core economic reforms the Cuban regime announced in June, amidst the island's prolonged crisis, when it unveiled a series of economic transformations.

New Framework for Private Enterprises

One of the most pivotal changes introduced by Decree-Law 133 is the removal of the 100-employee ceiling that formerly defined the maximum size for medium-sized private enterprises.

Under the new regulations, the classifications are as follows:

• Microenterprises: 1 to 10 employees.
• Small businesses: 11 to 35 employees.
• Medium enterprises: 36 to 100 employees.
• Private companies with more than 100 employees.

This measure effectively opens the door for the legal existence of larger private companies. However, these businesses will continue to operate under the regulatory framework and controls established by the Cuban state.

Capabilities of the Newly Recognized Private Companies

Decree-Law 133 characterizes these entities as economic units with legal personality, primarily aimed at producing goods and providing services.

The legislation covers state-owned, private, mixed, and politically, mass, and socially organized enterprises.

These entities are granted the ability to manage and administer their assets, determine the products and services they offer, operate bank accounts, establish their organizational structure and workforce, and set employee wages, all while adhering to the legally established minimum salary.

Additionally, they can set prices according to the Ministry of Finance and Prices' directives and engage in foreign trade directly, provided they have the necessary authorization from the Ministry of Foreign Trade and Foreign Investment.

While the expansion of permissible company size does not equate to a full liberalization of business activities, the state maintains regulations on pricing, banking operations, currency, foreign trade, and other operational aspects.

Regulations and Responsibilities for the Private Sector

The new legislation also imposes several obligations on economic entities, including registering operations through bank accounts, conducting transactions in Cuban pesos except where legally exempt, adhering to energy use regulations, and implementing internal control systems.

Moreover, businesses must comply with e-commerce laws, provide required statistical information to authorities, and keep their data updated in the Commercial Registry.

The combination of new capabilities with state supervision reflects the limited opening model the Cuban authorities apply to the private sector, which has been allowed to grow in recent years while the state retains broad regulatory control.

A Change Announced Months in Advance

The removal of the 100-employee limit was initially announced in June by the Cuban regime as part of a broader set of reforms aimed at altering the rules governing non-state economic actors.

These announced changes also included eliminating the restriction preventing an individual from owning multiple small and medium-sized enterprises (SMEs) or non-agricultural cooperatives, reducing prohibited activities for the private sector, and simplifying certain procedures for business creation and transformation.

Additionally, rights regarding usufruct or surface for non-state economic actors and new possibilities for importing and marketing fuels were proposed, among other measures.

Part of a Broader Economic Reform Package

This reform was later incorporated into a package of 176 economic and social measures presented by Prime Minister Manuel Marrero Cruz to the National Assembly on June 18, 2026, during the Third Extraordinary Session of the X Legislature.

The authorities presented these measures as an attempt to reorganize the Cuban economy, which has been affected by production declines, inflation, currency shortages, prolonged blackouts, and deteriorating basic services.

Recognizing larger private companies marks a significant departure from the model established when SMEs were legalized in September 2021, following over five decades without a formal private business sector of this nature in Cuba.

Since then, private businesses have gained substantial weight in the island's economy, particularly in commerce, services, gastronomy, transportation, and certain productions, amidst the challenges faced by the struggling state sector in meeting the population's needs.

Additional Regulations for Economic Actors

Alongside Decree-Law 133, Official Gazette No. 71 published three complementary resolutions concerning the operation of economic actors.

The Central Bank of Cuba's Resolution 98/2026 regulates the sight deposit of initial capital for establishing companies.

Meanwhile, the Ministry of Education's Resolution 30/2026 updates the control procedure for activities developed by non-state economic actors.

The National Institute of Non-State Economic Actors' Resolution 2/2026 regulates the procedures for creating, merging, splitting, and dissolving SMEs, private companies with over 100 workers, and non-agricultural cooperatives.

The enactment of these regulations marks a new step in the reconfiguration of Cuba's private sector: a major legal barrier to company growth is removed, but expansion remains subject to a broad framework of state authorization, regulation, and supervision.