REGULATORY CONTEXT
The scope of private enterprise in Cuba has undergone a significant transformation in recent decades. The regime evolved from a model based on a closed list of activities that self-employed workers were permitted to carry out, towards a system of residual and broadly restricted economic freedom for private MSMEs, non-agricultural cooperatives and self-employed workers, under which any lawful activity not expressly included in the list of unauthorised activities was deemed permissible, subject, in all cases, to prior administrative authorisation.
This second model was initially set out in Decree 49 of 2021 and was subsequently replaced by Decree 107 of 2024. In both cases, their annexes contained an extensive catalogue of exclusions applicable to the various non-state economic actors. Decree 160 of 2026 maintains the principle that activities not excluded are lawful but moves away from the approach of a uniform list and establishes differentiated limits according to the type of economic actor and the nature of the activity.
WHAT CHANGES FOR PRIVATE ENTERPRISE?
Under Decree 160/2026, we can identify four regulatory categories:
- Absolute prohibition, for activities linked to national security, public order or those involving an unmanageable risk.
- Activities reserved for the State, on grounds of sovereignty, critical infrastructure, or their status as an essential public service, without prejudice to administrative concessions for economic associations and national joint ventures, and forms of foreign investment.
- Activities not authorised for the self-employed, but permissible for private companies, private MSMEs and non-agricultural cooperatives, where requirements relating to scale, complexity, financial liability, contracting, security, infrastructure, or traceability apply.
- Activity subject to authorisation or conditions, which may be carried out upon fulfilment of the authorisation, licence, certification, or condition as established.
This framework provides greater clarity in identifying activities that are no longer uniformly off-limits to all non-state actors. It enables private companies and cooperatives — subject to sector-specific requirements — to operate in certain activities that are now excluded solely for the self-employed.
SECTORS EXCLUDED OR RESERVED FOR THE STATE
The following remain outside the scope of non-state actors: defence and public order; public administration, state regulation, foreign affairs, and social security; insurance, reinsurance, and pension funds; professional and formal healthcare provided by officially qualified practitioners; universal postal services, customs and freight forwarding; gambling; and the sectors of the press, radio, television, telecommunications, and critical digital infrastructure. The production and wholesale trade of tobacco products also remain restricted for strategic reasons, as do the collection and handling of hazardous waste, private physical security, the production and trade of weapons, and employment activities. These exclusions do not preclude certain ancillary technical services from being viable where permitted by sector-specific regulations.
SECTORS WITH OPPORTUNITIES FOR CONDITIONAL ACCESS
For private companies, MSMEs and cooperatives, the new annex identifies entry routes — always subject to authorisations, certifications, concessions or partnerships — in: small-scale mining in controlled areas; renewable energy; the manufacture and assembly of vehicles and certain transport equipment; pharmaceutical products, pharmaceutical services, optical services, and care and rehabilitation services; the management of recoverable waste and decontamination; non-critical transport infrastructure and services; audiovisual production and other cultural services; authorised professional activities, including engineering projects for renewable energy; technological security systems; call centres, international events, ecotourism, agrotourism and the management of certain sports facilities. Activities relating to oil, gas, large-scale mining, base metals, energy networks and critical infrastructure remain subject to particularly intense state intervention, although the Decree provides for concessions, economic partnerships, and forms of foreign investment in the cases indicated.
HOW DOES THE NEW DIFFERENTIATED MODEL WORK? EXAMPLES OF OPPORTUNITIES SUBJECT TO AUTHORISATION
- The extraction of metal-bearing ores may be authorised or subject to conditions for small-scale mining in controlled mining areas, for private companies, private MSMEs and non-agricultural cooperatives; it is not authorised for self-employed workers. Large-scale mining is regulated through economic partnerships and foreign investment.
- The manufacture and assembly of motor vehicles, as well as mopeds, motorcycles, tricycles, trailers, and semi-trailers, may be authorised or subject to conditions for private MSMEs and cooperatives, subject to prior technical certification and compliance with industrial standards; self-employed workers are excluded.
- The generation of energy from renewable sources and its commercialisation may be carried out by non-state economic actors. The management of the national electricity grid, however, is not authorised except through an economic association or a joint venture between national entities.
- The manufacture of pharmaceutical products is subject to authorisation or conditions; it requires health and regulatory permits and may be carried out by non-state actors through partnerships and supply chain linkages with the state-owned industry.
These provisions do not constitute automatic authorisations. Each project would need to verify the specific treatment of the activity and obtain the necessary sector-specific authorisations.
IMPACT ON FOREIGN INVESTMENT
Decree 160 expressly incorporates forms of foreign investment as a means of participating in certain activities reserved for the State, alongside administrative concessions, economic partnerships and, where applicable, national joint ventures. The regulation mentions this possibility, amongst other cases, in relation to oil and gas extraction, large-scale mining, oil refining, the manufacture of base metals and gas pipeline infrastructure.
The practical effect is the establishment of a sector-specific framework that provides for foreign investment and collaboration with non-state actors in activities that were previously included in the blanket list of unauthorised activities. However, the Decree does not create a general right for foreign investors to enter into direct partnerships with any private company or cooperative: feasibility depends on the specific activity, the applicable investment modality, state approval in accordance with the specific legal regime governing foreign investment, and the sector-specific regulations setting out the relevant requirements.
IMPLICATIONS FOR THE STRUCTURING OF INVESTMENTS
For foreign entrepreneurs, the Decree should be interpreted as a sector-specific and operational eligibility rule, rather than as a specific regulation governing foreign investment. Before entering commercial, corporate, or financial commitments with private companies, it is advisable to confirm the following in writing:
- Activity and applicable category: the exact description set out in the annex to the regulation must be identified; this takes precedence over the code in the National Classification of Economic Activities.
- Implementation vehicle: it must be verified whether the activity may be carried out by a private company, a private MSME or a cooperative, or whether it is reserved for the State or restricted solely to self-employed persons.
- Access route: where the activity is subject to authorisation or conditions, the licences, certifications, health, environmental and technical permits, or concessions required must be identified before operations commence.
- Collaboration structure: if the activity relates to strategic resources or critical infrastructure, it must be determined whether the operation requires an economic partnership, a joint venture, a form of foreign investment, state participation or discretionary approval by the State.
- Contractual allocation of regulatory risk: the documentation for the operation must include conditions precedent relating to approvals and authorisations, as well as the consequences of their refusal, delay, modification, or loss.
The express reference to forms of foreign investment is legally relevant but must be interpreted in conjunction with the Cuban regulations governing each form and with the relevant sector-specific provisions. Consequently, Decree 160 cannot be presented as an autonomous authorisation for direct investment in reserved sectors.
CONCLUSIONS
Decree 160 modifies the analysis of access to the Cuban market for projects involving private companies, private MSMEs and non-agricultural cooperatives. It does not entail a general liberalisation, but it does broaden the scope of the private sector’s activities, replacing the uniform treatment of unauthorised activities with an access framework based on the activity, the type of operator and the required administrative authorisation.
In the coming days, provisions are due to be issued setting out the respective procedures, requirements, authorisation procedures and risk-based supervision mechanisms, which will enable the true level of access to conditional activities to be identified with greater precision.