THE Cuban government is establishing a trade zone that comes into effect on November 1 and will include significant tax breaks for companies while maintaining many its restrictive policies.
The zone covers 180 square miles west of Havana and is centred on the new container terminal under construction in Mariel Bay, 28 miles from the Cuban capital.
The zone will be administered by a new state entity under the Council of Ministers, and investors will be given up to 50-year leases compared with the current 25-years limit with the possibility of renewal.
They can have up to 100 per cent ownership during the contract, according to Cuba's foreign investment law.
Investors will be granted a 10-year reprieve from paying a 12 per cent profit tax, but must pay a 14 per cent social security tax, a one per cent sales tax and 0.5 per cent income tax.
Foreign managers and technicians will be subject to local income taxes. All equipment and materials brought in to set up shop will be duty free, with low import and export rates for material brought in for export.
However, investors complain they have little control over their labour force and must find ways to stimulate their workers, who often receive the equivalent of around US$20 a month for services that the labour company charges up to twenty times more for.
The Mariel container terminal and logistical rail and highway support, a $900 million project, is largely being financed by Brazil and built in conjunction with Brazil's Grupo Odebrecht SA. The container facility will be operated by Singaporean port operator PSA International Pte Ltd and is scheduled to open in January.
Mariel Bay is one of Cuba's finest along the northern coast, and the port is destined to replace Havana, the country's main port, over the coming years. The terminal will have an initial capacity of 850,000 to one million TEU, compared with Havana's 350,000 TEU.
Cuba hopes such zones will "increase exports, the effective substitution of imports, [generate] high-technology and local development projects, as well as contribute to the creation of new jobs," according to a Cuban Communist Party statement.
The plan spoke positively of foreign investment, promised a review of the cumbersome approval process and said special economic zones, joint venture golf courses, marinas and new manufacturing projects were planned, Reuters reports.
WORLD SHIPPING
02 October 2013 - 22:01
Cuba offers tax breaks to lure investors to trade zone near Havana
THE Cuban government is establishing a trade zone that comes into effect on November 1 and will include significant tax breaks for companies while maintaining many its restrictive policies.
WORLD SHIPPING
02 October 2013 - 22:01
Cuba offers tax breaks to lure investors to trade zone near Havana
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