Cuba Begins to Develop the Legal Framework to Support Economic Opening

by Lourdes Dávalos León, managing partner at Dávalos Abogados

The economic measures announced by the Cuban government last June stand for one of the most significant reforms of recent decades. Beyond addressing the current economic crisis, they propose a transformation of the business system, with greater participation by the private sector and foreign investment.

However, from a business perspective, there is a fundamental difference between the political announcement and the legal reality. Investment opportunities only materialize when reforms are translated into clear rules, defined procedures, and a regulatory framework that provides legal certainty.

The announced measures call for greater autonomy for state-owned enterprises, the expansion of opportunities for private and foreign capital, and the modernization of strategic sectors such as energy, tourism, agriculture, transportation, trade, and digital infrastructure. If these reforms are ultimately implemented, the Cuban market could offer new opportunities for international investment, such as foreign capital participation in Cuban private companies, the acquisition of stakes in state-owned enterprises, the reorganization of public assets, or new forms of collaboration between the public and private sectors. For the time being, however, many of these possibilities remain in the realm of expectations.

This is precisely why it is significant that the initial reforms have focused on building the institutional framework that will make this transformation possible.

Decree 144/2026 establishes the National Institute of State-Owned Business Assets, tasked with coordinating the reorganization of the public enterprise system. Its functions include supervising state-owned enterprises, promoting economic partnerships, preparing corporate reorganization processes, and participating in projects involving foreign investment.

From a legal perspective, this agency could become the primary point of contact for future transactions involving state assets. If Cuba intends to move toward corporate restructuring, the incorporation of new partners, or the monetization of certain assets, it will need a specialized institution to centralize this management—not yet another bureaucratic body.

The second significant development comes with the reform of the Regulations of the Foreign Investment Law through Decree 153/2026. Although it does not alter the system’s basic principles, it introduces changes aimed at streamlining the administrative processing of projects.

The main change consists of replacing traditional pre-feasibility studies with a business plan as the primary document for evaluating investments. The reform reduces the initial documentation required and allows for the submission of proposals with a more strategic focus, although the requirements remain high by international standards, especially when the project does not involve public capital.

Likewise, procedures for modifying authorized investments are simplified, certain administrative deadlines are shortened, and certain prior controls are replaced by reporting obligations. Taken together, these measures aim to facilitate the entire investment cycle.

However, these changes should be interpreted with caution. The foreign investment regime remains based on a system of prior administrative authorization, in which each project is evaluated individually and the authorities retain broad discretion to request additional documentation and assess investments in accordance with the country’s economic priorities.

Consequently, rather than a liberalization of the investment regime, the new regulations represent an effort to streamline and simplify existing procedures.

Nevertheless, the landscape that is beginning to take shape deserves special attention from investors. Sectors such as renewable energy, tourism, agribusiness, infrastructure, logistics, the digital economy, and certain business services could account for a significant portion of the opportunities generated by the reform, especially if the announced changes in corporate, financial, foreign exchange, and foreign trade regulations continue to be implemented.

The government itself has acknowledged that the process will require the amendment of more than a hundred provisions and the adoption of new regulations. It is this regulatory evolution that will determine the true scope of economic liberalization.

Therefore, the current moment calls for a strategic approach. Companies interested in the Cuban market would be wise to identify opportunities, analyze potential local partners, and prepare flexible investment structures, making any major decisions contingent on the establishment of a stable legal framework.

The reforms approved in recent weeks show that Cuba has begun to translate its economic announcements into institutional action. The real challenge now is to build a legal system capable of providing the security, predictability, and confidence that any investment process requires. Whether the expectations generated translate into real opportunities for companies will depend, to a large extent, on the speed and consistency with which this regulatory development proceeds.