Cuba’s Official Gazette published Decree-Law 120 on socialist state-owned enterprises on Wednesday, along with a package of complementary regulations that will take effect on September 9, just seven days after their publication.
Roberto Ricardo Marrero, president of the National Institute of State-Owned Business Assets, described the presentation of the new regulations as a “historic” moment for Cuba’s business sector. He said the rules had been drawn up “in record time” by a working group bringing together representatives of companies, business groups and government agencies, according to Cubadebate.
The regulatory package is part of “the 17 transformations under thematic area number one, devoted to the state-owned business system,” within the broader framework of the 176 economic and social transformations approved by the National Assembly in June. The changes come as pressure from the Trump administration on the Cuban government intensifies, while the country faces a deepening economic crisis that continues to weigh heavily on the population.
Greater Autonomy and Decentralization
The centerpiece of the decree, published in Ordinary Edition No. 72 of the Official Gazette, is the granting of “full autonomy” to state-owned enterprises, which are now designated as “the fundamental pillar of the country’s economic development.”
Under the new framework, business groups will be able to create companies, subsidiaries and state-owned MSMEs, as well as carry out mergers and liquidations, without having to obtain authorization from the Ministry of Economy and Planning—a power that had previously been reserved exclusively for the ministry.
Local governments will also gain greater authority to approve the creation of new entities within their territories.
The new rules are intended to put state-owned companies on an equal footing with other economic actors, including private MSMEs. They also abolish the existing product nomenclature system, allowing state-owned entities to market any lawful product rather than restricting them to a government-approved list.
Workers to Gain a Greater Role
Among the measures described as “unprecedented” is the introduction of worker representation on companies’ governing boards. Twenty percent of board members will be elected directly by the workforce.
Workers’ assemblies will also be given a role in approving economic plans, salary levels and decisions on how retained profits are used, including funds allocated to corporate social responsibility initiatives.
The Complementary Regulations
The regulations accompanying Decree-Law 120 include Resolution 170, which establishes rules governing financial relations with the state budget. Marrero described it as historic because it is the first resolution issued by the National Institute of State-Owned Business Assets.
Another resolution addresses organizational changes, while additional rules governing financial, tax and accounting procedures redefine the relationship between state-owned enterprises and the government budget.
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Addressing the role of the National Institute of State-Owned Business Assets, Marrero stressed that it “is not a super-ministry” and does not manage companies or state assets directly. Instead, its role is to oversee the transformation of the state business sector, with a central objective of increasing the value and performance of state-owned resources.
The system currently encompasses 77 business groups—56 under national jurisdiction and 21 under territorial jurisdiction—along with 1,732 companies, 297 commercial corporations, 214 subsidiaries and 292 state-owned MSMEs.
