GEOGRAPHICAL  SITUATION .

At the western side of the Antilles, oriented from East to West and closing the way between the Atlantic Ocean and the Caribbean Sea. It is the largest island in the Caribbean with 1250 Km. of longitude, and at 180 Km. to the South of Florida, USA. It’s average width is of 100 Km. with a maximum of 191 Km. and a minimum of 34 Km.

Time : Same as US Eastern Standard Time. Five hours behind Greenwich Meridian Time.

Total Area : 110,000 km², including 1,600 medium and little islands and keys.

Land boundaries : 29.1 km² US naval base at Guantánamo Bay at the South of the oriental part of the island.  The US Naval Base of Guantánamo is leased to USA  and only a mutual agreement or US abandonment of the area could terminate the dispute around it.

Climate :Tropical and moderated by trade winds. There are only 2 seasons. The dry season starts in November and ends in April and the rainy  one starts in May. The medium temperature is of 25 Cº with an average humidity of 80%.

Terrain: Mostly flat to rolling plains with rugged hills and mountains in the North Occidental, South Central and North and South Oriental zones of the island.

Natural resources :  Nickel, cobalt, iron ore, copper, manganese, salt, timber, silica petroleum, big spring water sources and the best beaches ( more than 100 km.) of the Caribbean area.

Land use : Available arable land 13%, permanent crops 16%, meadows and pastures 23%, forest and woodland 17%. Others 31% ( including 12% of irrigated land ).

Hurricanes : During the last 50 years the average has been of one hurricane every  other year.

GOVERNMENT .
Long formed name :  Republic of Cuba .

Type of Government : Socialist State.

Capital : City of Havana.

Administrative Division :  14 Provinces and 1 Special Municipality.  From East to West the provinces are :  Guantánamo, Santiago de Cuba, Holguín, Granma, Las Tunas, Camaguey, Ciego de Ávila, Sancti-Spiritus, Villa Clara, Cienfuegos, Matanzas, La Habana, Ciudad de La Habana and Pinar del Río.  The Special Municipality is Isla de la Juventud ( Island of the Youth ) 46 miles to the South of La Havana.

Independence :  20th of May, 1902 ( from Spain : 10th of December, 1898 ), Cuba was administrated  by USA  from 1898 to 1902.

Constitution : 24th of February, 1976.

Legal System :  Based in the Spanish ( Roman ) and American Law with elements of the Marxist Legal Theory.

National Holiday : Rebellion Day 26th of July ( 1953 )

Other Holidays :  Triumph Day 2nd of January  ( 1959 ) – Christmas Day 25th of December .

Legislative  Branch : National Assembly of the People’s Power ( Unicameral )  Asamblea  Nacional del Poder Popular.

Executive Branch :  Council of State.

Judicial Branch : People’s Supreme Court  ( Tribunal Supremo Popular ) .

Leadership :  President of The Council of State -  President of The Council of Ministers  Dr .Fidel Castro Ruz, who became Prime Minister on February 1959 and President  of the Republic since the 2nd  of December, 1976.

Political Party :  Cuban Communist Party ( PCC ).  First Secretary : Dr. Fidel Castro Ruz.

Suffrage : Universal at the age of 16.

Elections : National Assembly of the People’s Power. ( Every each 5 years since 1986 to elect 510 seats )

The State is member of :  ( In alphabetic order )
CCCM,  ECLAC, FAO, G-77. GATT, IAEA,  IBEC, ICAD, IFAD, ILO, IMO,  INTERPOL, IOC,  ISO,  ITU,  LAES,  NAM,  PCA,  UN,  UNCTAD,  UNESEO,  UNIDO,  UPU, UICL, WFTU, WHO, WIPO, WMO, WTO.

Flag :  Five equal horizontal stripes of blue ( top ,center, and bottom ), alternating with white ones.  Red equilateral triangle based on the hoist side, with a white five-pointed star in the center.

Military :  Revolutionary Armed Forces (which includes Ground Forces, Revolutionary Navy (MGR) .   Air – Air Defense Forces (DAAFAR) .    Defense Special Troops,  Border Guard Troops,  Territorial Militia Troops,  Youth Labor Army,  Civil Defense,  National Revolutionary Police and Ministry of the Interior Special Troops.
 

POPULATION .

Year 2002 :  11’ 236,000  Inhabitants .   Projected for year 2010 : 12’224,000  Inhabitants. Projected for year 2025 : 12’875,000 Inhabitants.

Population density :  162 persons per Km².

Total urban population :  7’874,000  (72.6%).

Total population growth :  121,475  (1.12%).

Population doubling time :  68.89 years.

Total birth :   190,000 yearly ( average ).

Birth rate :  5.5 deaths per 1000 persons.

Population under age of 15 :   2’726,000.

Percentage under age of 15 :  21.7 %.

Population over age of 65 : 988,000

Percentage over age of 65 :  9.8 %.

Life expectancy at birth :  75 years males,   79 years females.

Net migration rate :  1 migrant / 1000 persons.

Marriages :  85,400 yearly  (average).

Marriage rate : 7.8 per 1000 persons.

Divorces : 37,500 yearly (average).

Divorce rate :  3.5 per 1000 persons.

Ethnic division :  Mulatto  48%  -     White  39%  -   Black  12% -   Chinese 1%
Religion :  Freedom of cults with the presence of Christian and Afrocuban religions.
 

COMMUNICATIONS .

Telecommunications :
155 broadcast stations ( including 5 FM )
1 international long range broadcast station (short wave ).
3 national TV channels ( Including 1  educational ), and 6 local telecenters.
1 Atlantic Ocean INTELSAT earth station.
1 submarine cable between the City of Havana and Key West, USA.

Telephones : 176 per 1000 persons.
Radios  :    3’708,000.
TV  Sets :   2’460,000.

Civil  Air :  58 Major Transport Aircrafts.

Airports :  From a total of 189,  167 still usable.  73 with permanent surface runways.
11 with runways over 3,500 m.    18 with runways of between 1200  to  2500 m.  The rest are military airfields and agriculture planes land stripes .

Civil air traffic :  1’232,000,000 flown yearly.

Ports :  Mariel, La Habana, Matanzas, Nuevitas, Santiago de Cuba and Cienfuegos with 11 secondary  and 35 minors.

Ship cargo entered :  12’000,000 mt. (metric tons).
Ship cargo cleared :   12’000,000 mt. (   “         “    ).

Merchant marine :   57  ships ( 1000 GRT or over ), totaling  237,464 GRT / 326,240 DWT.

Beneficially, Cuba owns the fleet under the registries of Panama, Cyprus and Malta.

Inland waterways :  246 Km.

Railroad :  12,947 Km of rail tracks .   The Cuban National Railways Company  operates 5,136 Km. of 1.435 meter  gauge tracks,  152 Km. electrified.    The Ministry of Sugar operates 7,742 Km. of sugar plantation lines of 1.435 meter and 0.914 meter gauges.

Railroad passengers : 2’891,000,000  Passenger-Kilometers.
Railroad freight   :  2’048,000,000 Ton-Kilometers .

Highways and Roads :  From a total of 26,470 Km.,   14,477 are paved, and  12,000  Km. are gravel and earth .

Passenger cars :  261,900.
 
 

AGRICULTURE .

Land in Agriculture :  56.83 %

Agricultural Population Density :  160 persons per Km2.

Total Agricultural Workers :  862,000.

Agricultural  Imports : US $1’024,400.000 .

Food Imported : US $779’100,000.00

Food and Animals Exported :US $ 870,700.000

Main Agricultural Products :  Cereal  526,000 mt. -   Rice  430,000 mt. -  Corn  95,000 mt.  -  Potatoes  280,000 mt. -   Beans  26,000  mt.  -  Fruits  1’539,000 mt. -  Cane Sugar 3’000,000 mt. -  Oranges  600,000 mt.  -  Lemons and Limes  62,000 mt.  -  Bananas   200,000 mt.  -  Pumpkins  46,000 mt.  -  Vegetables  400,000 mt.  -  Papayas  30,000 mt.  -   Coffee  36,000 mt.  -   Cocoa  Beans 12,000 mt. -  Tobacco  144,000 mt .

Animals :  Horses 628,000  -   Mules  36,000  -   Asses  6,000  -&   Cattle  4’920,000  -   Pigs  1’920,000 ; -   Sheep  360,000  -   Goats  110,000  -  Chickens  28’000,000.

Animal Products :  Meat   320,000 mt.  -  Beef 62,000 mt.  -   Mutton  and Lamb  3,200 mt.  -   Pork  96,000 mt. p; -   Horse meat 1,200  mt.  -   Poultry  90,000 mt.
Dairy Products :  Cow Milk 1’070,000 mt.  -  Yogurt  325,000  mt.  -   Cheese  6,300 mt.  -   Butter 3,600 mt.  -   Condensed and Evaporated Milk  56,000 mt.  -   Dry Milk  12,300 mt.

Miscellaneous Products :   Fish Catch  190,000 mt.  -   Eggs  110,000 mt.&nbssp; -   Honey  9,500 mt.

Agricultural Equipment :   Tractors  46,800 units in use  -   Harvester Threshers  6,120 units in use .
 
 

EDUCATION.

Literacy, Cuba is the best educated country, not only of the Caribbean, but of the whole Latin America. 100% of males and females over the age of 15 can read and write fluently.  92% of males and 89% of females over 15 years have completed the basic secondary education of 9 gradeS.  86% of males and 82% of females over the age of 18, have completed the high level secondary education of 12 grades.  786,000 Cubans have University level with 36,000 doctors with  a scientific degree in the different fields of science, technology, history  and politic sciences.

Ages of compulsory education : 6 to 11 years.

Educational expenditures : 8.6%  of GNP.  12.8% of Government Expenditure ).

Daily newspapers :   17   ( 4 of them of national circulation, including one in English language)

Daily newspapers circulation :    1’836,000  samples .

Daily circulation :   136  per  1,000 persons .

Public libraries :  262  with 5’431,000 volumes .

National libraries :  1 with 2’831,000 volumes .

Specialized libraries :  36 with 325,000 volumes .

Books  production :   2,200 titles yearly  ( 3.5 million units ) ( Average ).

Museums and cultural sites :  346 .
 

 BUSINESS IN CUBA-LEVELS OF APPROVAL

The basic structures for business  of foreign enterprises in Cuba are classified in six, with different procedures according with the sector of the economy to which the business is directed and to the priorities of the Government related to the development of the sectors interested. These structures are as follows :

1 – Commercial export / import entities.
2 -  Schemes of cooperated production.
3 -  Administration contracts.
4 -  International economical associations ( Namely : Joint Ventures ) ( J.V. )
       with mixed capital ( Cuban and foreign ) .
5 -  Business with 100% foreign capital.
6 -  Commercial or productive entities established in Free Zones.

In general, the spectrum of activities and / or participation related to the different modalities is the following :

As to No. 1 :  The entities involved, once obtained the license from the Chamber of Commerce of the Republic of Cuba, act within the profiles considered in the license, allowing the possibility to open office branches in the country, contract personnel for the administrative and technical work, have access to all the legal and banking infrastructure of the State, permitting the expatriation, partial or total, of the incomes from the resulting activities, through the banking system of the country where operative accounts can be fixed.  The steps for the establishment of the entities, that can be either import dealers or export dealers, or both, requires the approval of the Chamber of Commerce of the Republic of Cuba, subject to the application presented to same.

As to No. 2 :  These cooperation schemes are effected both for productions directed to the internal market in currency and for exportation.  The foreign partner supplies the technology, raw material and materials and the technical-administrative supervision as well as the control of the quality of the production. The income of the foreign part is obtained  through a percentage increase on the prices of his supplies, promotion and sale in the internal and external markets, or simply by paying the manufacturing costs to the Cuban side and selling directly the production obtained.  This type of business can also be settled on Free Zones with the advantage that all the materials and products imported enter the country free of taxes.  The level of approval for these businesses corresponds to the Ministry of the economic branch to which they are related.  In the case of using the free zone, also participates the Ministry for the Foreign Investments and Collaboration ( MINVEC )  which is the State organism that leads the policy of development of the Free Zones and Industrial Parks of the country .

As to No. 3 :  These are applied to businesses where it is required the administrative action of international entities of well known prestige and economical success in the sector in which they are involved.  In this modality the Cuban side renders a determined objective which is completely administrated by the foreign partner. The percentage share on the incomes depends on the agreements reached between the parties.  This modality is used mainly in the branches of tourism and biotechnology  requiring a strong  promotion and commercialization of global level  made by world known enterprises.  Even though for the tourism the level of approval depends on the Ministry of Tourism ( MINTUR ). In other branches, such as the strategical biotechnology, the approval can reach the Council of State, being the application and channeling of same through MINVEC.

As to No. 4 :   The International Economical Associations are settled to give answer to the commercialization of the most important natural resources of the country which not only require important capitals for investment or modernization of the existing facilities, but also a strong promotion and sale of raw materials, sub-products or finished products. In the practice, there are two basic variants for these associations, according with the percentage of the distribution of the incomes as result of the sales of the goods involved, which can be equal for both parties, or in majority for the foreign partner.  The J.V. requires  of the approval of MINVEC and in very specific cases, such as the energetic branch, it is needed the authorization of the Council of State, carried through the MINVEC .

As to No. 5 -This modality is only approved for top priority sectors that require strong investments and advanced technologies. So far, it has only being applied on the branches of the basic industry, and within this, regarding the electric generation and oil prospection at risk of the investor . In this modality, the foreign partner covers l00% of the required investment,  as well as the exploitation and maintenance. The State grants  to him the ownership of 100% of incomes during approx. 50% of the utility life period of the investment. In the case of  the  electricity generation, the Cuban State pays the service  of  the electricity generated during the agreed period of time. The approval is at the level of the Council of State, carried through the MINVEC.

As to No. 6 -  According with the Law for the Free Zones and Industrial Parks, the Cuban State renders through the proper applications of the entities involved, the possibility of operation in frontier, with all the prerogatives that the exception of taxes on the imports and exports of the goods produced under this modality involve.  In the case of the commercial firms, they effect the commercial transactions without the supervision of the control organisms of the State. Both the entities producing goods and  the importers and distributors have the status of Free Zone Operators rendered by the mentioned law. All the legalization activities of the entities requesting to be established  in the Free Zone are conducted by the  Administration  Offices of the Free Zones, belonging to MINVEC.
 

The permissions and licenses that offer the different levels of the State to the foreign entities interested in the modalities shown above, vary in the period of validity depending on the magnitude, financial characteristics and strategical importance of the business requested. The period of time ( always renewable consecutively by no less than one third of the initial concession )  vary for the different modalities and it covers between 10 to 50 years. If the foreign partner wishes, can withdraw from the business or transfer his share to other entity, previous communication to the Cuban side as established by the current law.
 
 
 

SUMMARY

In general, the approvals of licenses for the settlement of foreign firms as commercializers, participants in schemes of cooperated productions, administrators of economic objectives, investors, operators and  concessionaries of Free Zones, and participants in international economical associations, are approved within a lapse of time of between 45 and 90 days counting from the date of presentation of the application, including the required documentation according with the different modalities above mentioned.

These applications presented to the Chamber of Commerce, MINVEC, or the Business Office of the Ministry that rules the economic branch involved, should be accompanied with a translation into Spanish of the Constitution Act  ( Deed ) of the applicant firm, duly certified by an international homologated entity, and warranted by signature and seal of the Consulate of the Cuban Diplomatic Representation in the country of registration.  Considering the absence of a Diplomatic Representation in the country, the Constitution Act should be approved by the Cuban Consulate having  jurisdiction in the geographic area where  the soliciting firm is based.
 
 

ECONOMIC PRODUCTIVE SECTORS OF INTEREST TO THE STATE FOR THE
FOREIGN INVESTMENT.
 

Due to the privileged geographical position of Cuba,  its natural resources, administrative and social-political system  and high educational level of its inhabitants, is bound to play a very outstanding roll in the area as the biggest sister of the rest of the Antilles, in which the economical integration is each time more necessary as the only way to adequate the common interests of these islandx.  During the last years, the Cuban State has developed a policy of integration that ends with the joining  of Cuba to the CARICOM.

Among the sectors that this country is interested in developing through any of the forms of foreign investment, are the following :

1 – Tourism .
Construction of hotels and touristic objectives of different categories
Development of areas and installments regarding the Nature tourism (Ecological ), for which this country has exceptional conditions.  Cuba owns 18 national parks and ecological reserves including 3 that has been declared by UNESCO, Natural Heritage of The Humanity.
Establishment of companies for the service to he touristic industry, mainly to render integral maintenance and environmental cleaning.
Establishment of companies operating light aircrafts for the interconnection between the reception airports and the touristic resorts and sites of principal interest. ( Commuter Lines ).
Conformation of agricultural associations for the production of high quality goods  for the touristic infrastructure, exportation and internal demand.
Settlement of enterprises for the construction of  synthetic fiber vessels (boats)  for the touristic use .
Establishment of international lines of fast ferries both for passengers and cargoes. This service, practically non-existing actually, has a great demand due to the growth of the modality of the multi-destiny tourism in the area, and the service of transportation of merchandises that due to its characteristics require a fast handling .
 

2 -  Basic Industry .

Constitution of entities for the generation of electricity using alternative methods  ( mainly natural gas,  solar and wind power energy ).
Establishment of economical associations for the industrial exploitation of beds of silex sand ( related to the production of high technology electronic components ).
Development of investments at risk related to the  off-shore oil
      prospection.

 3-  Real Estate

Construction of apartments buildings of different levels for sales and rent.
Construction Associations having point technology for the erection of all types of civil objectives .

 4 -  Other possibilities .

Constitution of economic associations for the production of ships,
      mainly, of medium  and small size, including barges of different
      capacities and auxiliary boats.
Establishment of an association for the recycling of urban waste and left-overs of all kind for their use in the production  of various articles and goods. Cuba, due to its geographical  position can easily be the center for processing  the urban wastes of the near-by islands, duly classified and separated as most of them   are in lack of procedures  and conditions to solve this problem, thus in help of the environmental cleaning .
 

Elaborated by   Lic. Oscar Díaz  Muñoz                                        01 / 30 / 2004