As soon as Cuba opened up for world trade interested people and companies started to come up. Entrepreneurs from Spain, France, Italy, Germany, Brazil, China and Russia were among the first to bring in their proposals and, till May, Cuba was studying about 23 projects.
Since its beginning in November, 2013, more than 130 potential investors had contacted the Office of Mariel’s Special Development Zone. Out of that number, 72 presented direct applications for investing in the area and 66 expressed their interest in receiving more information.
However, what are the procedures those interested in negotiating in Cuba must put into practice? How long can take for a proposal to materialize?
The Office of Mariel’s Special Development Zone (OZEDM by its acronym in Spanish) is the national entity attached to the Council of Ministers in charge of managing and controlling ZEDM, and of drafting and implementing the Development and Business Program, as well as of taking care of the necessary applications, permits and authorizations. Its purpose is to promote investments in the infrastructure of this Zone, in biotechnology, renewable energy sources industry, informatics, agriculture, packs and bottles and in pharmaceutical products.
According to its website, those interested must comply with a series of strict steps in order to enjoy the benefits of Mariel and Law 118 on Foreign Investments, which states that Cuba offers 0% taxes for investors during a period of time of eight years and exceptionally for longer. After that time, they are charged 15% taxes and 0% over reinvested profits.
Step by step: First of all, it is necessary to get in touch with the Office and present the specific documents for applying for settlements as concessionary or user of the Zone. The following are the documents demanded:
- A letter signed by authorized persons stating the reasons for applying for settling as Concessionary or User;
- Foundational documents of the applicants, a copy of the financial statements from the last year and a bank guarantee;
- Certification of Mercantile Registration or public registry crediting the validity of the applicants’ inscription in these registries no older than six months prior to the submission date;
- Powers crediting the representation of the applicants in applicable cases;
- Description of the project, including the objectives, technology to be used,
- if applicable, activities to be developed, infrastructure needs, human resources and other planned services;
- Technical, financial and economic feasibility studies of the project and the foreseeable market;
- Applications for the necessary permits and authorizations; Other documents the Office may demand.
After the preliminary assessment carried out based on the initial contacts in order to establish its “elegibility”, those interested can submit their projects. There is an “information card”, to be filled in, whether in English or Spanish, and can be downloaded form ZEDM.
This document, in addition to the general information on the investors, queries what kind of activities are to be developed (productive, of services or commercial); what percentage of the investment deals with foreign capital, associations with Cuban entities or national capital, etc.
It also demands information on previous experiences in similar endeavors, the estimated area of the project in square meters, the kind of wastes to be produced (whether solid, liquid, gas, harmful or not) and the approximate number of workers. The Office can take up to five days for approving or not the project to go to the next Assessment and Approval stage, which can last between 30 and 60 days. In total, there can be a period of up to 180 days before the beginning of the investments.
Other important information has to do with the Extraordinary Gaceta Oficial No. 23 dated May 7, 2014 and the Operation and internal order regulations by Mariel’s harbor management, included in the Ordinary Gaceta Oficial No. 13 dated April 4, 2014. It establishes minimum wages for each area in the North Part of Sector A in Mariel and regulates the payment to workers hired by recruitment agencies as labor force for the concessionaries. There are twelve recruitment agencies approved for hiring.
On the other hand, the Regulations, in nine chapters, establish the use, exploitation, operation, and management of maritime services rendered in Mariel.
A containers terminal with a dock of 702 meters-long with capacity and provisions for the operation of super post-panamax ships is already working. Aroad network interconnects the Zone with the Havana-Pinar del Rio Highway and the Pan-American Road and they are working already in the construction and repair of railroads. Besides, ZEDM relies on an optic fiber communications system and a radio link as backup.
There are no rules regulating the amount of Cubans and foreigners that can work in a joint venture or any of the foreign investment modalities, but the Zone favors the hiring of highly qualified national personnel for the positions of specialists and others. However, management positions or those lacking personnel can be covered with foreigners.