Cuban State Council Amends Foreign Investment Law

The Cuban State Council has enacted Decree-Law 128, introducing changes to the Foreign Investment Law 118, which has been in effect since 2014. These changes aim to ease labor hiring practices, expand access to international banking, and grant foreign-capital enterprises more autonomy in managing their profits.

Signed on July 28 by Juan Esteban Lazo Hernández, President of the National Assembly of People's Power, the law was published this Thursday in the Official Gazette No. 73 Ordinary of 2026 and took immediate effect.

The decree's text justifies the reform by stating that "the approved Economic and Social Transformations necessitate updating Law 118 and its Regulations to continue easing the management of foreign investment modalities."

International Banking Access

This reform is part of a package of 176 economic and social transformations approved by the National Assembly on June 19, 2026, touted by the regime as the most significant economic opening in decades.

One of the most notable changes impacts Article 25 of Law 118. The revised provisions allow joint ventures and national investors involved in international economic association contracts to "open and operate accounts in foreign banks, notifying the Central Bank of Cuba. They may also engage in credit operations with foreign financial institutions according to current regulations."

The Central Bank of Cuba's Resolution 100, published in the same Gazette No. 73, outlines the specific regulations for opening these foreign accounts.

Profit Management Autonomy

The amended Article 29 grants management bodies of joint ventures and wholly foreign-owned companies the authority to "decide the allocation of generated profits, including the creation of a stimulus fund."

This obligation excludes hotel, production, or service management contracts, as well as professional service agreements. The article further allows for workers to receive "bonuses in foreign currency, provided that the foreign investment modality generates them."

Direct Labor Hiring

The most structural change occurs in the labor sector. The original 2014 Law 118 required hiring workers through state intermediary entities. The new Article 30.1 breaks this model, permitting Cuban or foreign permanent residents to be "hired directly by joint ventures, wholly foreign-owned companies, or by the parties of the international economic association contract, or through employer entities authorized by the Ministry of Labor and Social Security."

The Council of Ministers' Agreement 10443 and the Ministry of Labor and Social Security's Resolution 56, also published in Gazette No. 73, complement this modification with applicable procedural norms.

Article 31.2 adds that if companies choose to hire through an employer entity, they may request the replacement of a worker if deemed "not meeting work requirements."

Repeals and Updated Version Timeline

The decree abolishes sections 2 and 4 of Article 30 and Article 32 of Law 118, as well as Article 19 of Decree 325, the "Regulation of the Foreign Investment Law" from 2014.

The Second Final Provision mandates the Minister of Justice, Rosabel Gamón Verde, to publish an "updated, revised, and harmonized" version of both Law 118 and Decree 325 within 30 working days.

This timeline commenced with the publication of the regulation in the Official Gazette No. 73 Ordinary of 2026, which includes a total of eight regulations related to foreign investment, tourism, and foreign trade.