Cuban Law 118 process — non-U.S. / post-sanctions

This is the complete Law 118 process — every stage, deadline, document, and obligation required to stand up a foreign investment under Cuban domestic law. It governs the state-economy and joint-venture lane: the path for non-U.S. capital and for a post-sanctions future — not an OFAC general license for U.S. persons.

The governing rules

The approval process — stage by stage

A foreign investor does not file directly. A Cuban sponsor — the Central State Administration body (OACE) or national entity that owns the opportunity — carries the proposal through the state machinery. Statutory clock: a decision within 60 days of MINCEX accepting the proposal.

Who must approve — and when

• Council of State — the most sensitive deals: exploitation of natural resources, public services/utilities, large public-works concessions, the enterprise systems of the armed forces, and wholly-foreign-owned enterprises in such areas.
• Council of Ministers — the general approval authority for most foreign investments and the body that approves the Cartera de Oportunidades.
• Delegated ministry heads (OACE) — heads of central-administration bodies may authorize International Economic Association Contracts for productive/service administration and their modifications — the streamlined lane.

The three vehicles

Money: contributions, tax & transfers

The labor regime — the employing entity

Until September 2026 a foreign-invested business could not hire Cuban workers directly: Cuban (and permanently-resident) staff were contracted through a Cuban employing entity (agencia empleadora) that took the investor's hard currency and paid workers in pesos — the most-cited friction point in the regime. Decreto-Ley 128/2026 (Gaceta Oficial No. 73, in force 3 September 2026) rewrote Law 118 Art. 30 so that joint ventures, wholly-foreign firms and the parties to an association contract may now hire Cuban and permanently-resident workers directly, or still through an authorized employing entity; the same decree lets joint ventures and national investors keep accounts at foreign banks on notice to the Central Bank (Art. 25.2), lets the business decide how profits are used, and allows hard-currency bonuses to workers (Art. 29).

Investor guarantees & disputes

• Full protection; no expropriation except declared public utility, with indemnification at commercial value in convertible currency.
• Free transfer abroad of profits and of the proceeds from selling the foreign stake.
• Disputes: Cuban courts by default, but international commercial arbitration is permitted (e.g. the Cuban Court of International Commercial Arbitration), and Cuba has bilateral investment-protection treaties with many countries — not the U.S.

The fast-track: Mariel Special Development Zone

Inside ZED Mariel a separate regime applies, administered by the Oficina de la ZEDM rather than the full Council-of-Ministers path: up to 100% foreign ownership, a longer profit-tax holiday (commonly ~10 years, then a reduced rate), a 1% labor-contribution rate, and customs exemptions — designed to approve qualifying projects faster. Still U.S.-restricted (the zone land sits under GAESA's Almacenes Universales — see /entities).

Document checklist

• ✓Business plan (per Resolución MINCEX 78/2026 — replaces the feasibility study)
• ✓Decreto 153/2026 document set: Cuban investor's board approval, registry certificate, audited statements; foreign investor's legalized constitutive documents, registry certificate (<1 year), audited statements, bank references, legalized powers
• ✓Draft association agreement / AEI contract
• ✓Draft bylaws (estatutos) for a joint-venture S.A.
• ✓Corporate due-diligence on the foreign investor (good standing, beneficial ownership)
• ✓Asset valuations and contribution schedule
• ✓Environmental impact documentation (CITMA) where applicable
• ✓Sector licenses / permits as applicable
• ✓Sponsoring Cuban entity's endorsement to MINCEX

Confidence: the 7-working-day commission review, the 60/45-day decision clocks and the dossier requirements are read from Decreto 153/2026 in Gaceta Oficial No. 57 (9 July 2026); Resolución 78/2026 and the direct-hiring change from Decreto-Ley 128/2026 in Gaceta No. 73 (3 September 2026); the seven-stage sequence, the 5-day admission window and the 15% profit tax / 8-year exemption / labor-tax exemption are corroborated across MINCEX materials and multiple legal analyses; the Mariel ZED figures and the 99-year usufruct reflect the established framework and should be re-confirmed against current resolutions with counsel. See What's allowed and Data & methodology. Research, not legal advice.