| HAVANA, March 29
HAVANA, March 29 Cuba's National Assembly is set
to pass a new foreign investment law on Saturday that aims to
bring badly needed capital to the communist economy by offering
steep tax cuts and promising a climate of investment security.
The assembly convened a special session on Saturday to
discuss and approve the law, which would become valid within 90
days. Cuban media reported the session had begun, though there
was no indication when a vote might take place.
The new law halves the profits tax from 30 to 15 percent and
exempts investors from paying it for eight years, though it also
appears to withhold many of the tax benefits from companies that
are 100 percent foreign-owned. Those incentives are reserved for
joint ventures with the Cuban state and investments linking
foreign and Cuban companies.
Analysts and Cuban-based diplomats have expressed skepticism
over the law, uncertain whether the one-party state has
undergone a genuine change of heart and truly wants to attract
foreign investors on international terms.
Areas such as agriculture, infrastructure, sugar, nickel
mining, building renovation and real estate development are
considered ripe for investment.
Cuba needs to attract $2 billion to $2.5 billion in foreign
direct investment per year to reach its economic growth target
of 7 percent, minister for foreign trade and investment Rodrigo
Malmierca said on Cuban state television on Friday night.
Cuba does not publish figures on FDI, which economists
estimate to be several hundred million dollars a year at most.
Cuba's gross domestic product is expected to expand 2.2 percent
this year, compared with 2.7 percent growth in 2013.
"If the economy does not grow at levels around 7 percent ...
we are not going to be able to develop," Malmierca said.
"We have to provide incentives in order for them to come,"
Malmierca said of foreign investors.
Cuba is cut off from U.S. investment by a comprehensive
trade embargo and has failed to meet its investment targets for
each of the past five years.
The new investment law continues the structural economic
reforms under way in Cuba since President Raul Castro took over
from his ailing brother Fidel in 2008. It has been anticipated
since 2011, when Cuba enacted a 300-point overhaul of its
domestic economy to encourage more private enterprise.
(Additional reporting by Nelson Acosta, Rosa Tania Valdes and
Marc Frank; Editing by James Dalgleish)