Brief analysis of Decree-Law 114/2025 “On partnerships between state and non-state business entities” and Resolution 8/2026 of the Ministry of Economy and Planning establishing the “Procedure for the evaluation and approval of partnerships between state and non-state business entities”
In light of Cuba’s current situation—marked by a deep energy crisis, the intensification of the United States embargo, and a broader context of economic opening and updating of the principles governing the Cuban economy—the government has enacted Decree-Law 114/2025 (“Decree-Law 114”), which introduces new corporate and contractual structures for joint projects between public and private enterprises. The aim is to strengthen productive processes, improve economic efficiency, and promote the attraction of private capital.
New legal framework for public-private partnerships
Prior to the entry into force of Decree-Law 114, relations between state enterprises and private actors were primarily structured through commercial contracts, investment vehicles under the foreign investment regime, or administrative procedures.
The new Decree-Law introduces additional corporate and contractual formulas that expand structuring mechanisms, aimed at facilitating the formalisation of strategic investments between public and private entities and providing greater legal certainty.
Decree-Law 114/2025 establishes four forms of partnership:
- The incorporation of new limited liability companies with mixed public and private capital;
- The acquisition by a state-owned enterprise of shares in an existing private limited liability company (MSME);
- The merger by absorption of commercial companies with mixed capital (MSMEs); and
- Economic association contracts for joint projects without the creation of a new legal entity.
I.1 Mixed Limited Liability Company
The most significant innovation introduced by the regulation is the mixed limited liability company (LLC), conceived as a new legal entity that may be established through the above-mentioned mechanisms, whether of public or private origin. Its presence in the Cuban market may materialise both in pre-existing businesses and in new ventures.
Key features include:
- Flexible share capital: no minimum capital requirement is established, although it must correspond to the scale and scope of the business activity. Subscribed capital must be fully paid up at incorporation.
- Broad recognition of contribution regimes.
- Corporate autonomy: the company may manage its assets, distribute profits, define its organisational and labour structure, and expand commercialisation of goods and services in accordance with applicable law.
- Foreign trade operations: permitted subject to the applicable legal authorisations.
- Ability to open and operate foreign currency accounts.
- Exchange and planning regime: the entity is integrated into the national foreign exchange management system but is not classified as a subject of the State economic planning system.
I.1.1 Approval procedure
The incorporation process is overseen by the Ministry of Economy and Planning (MEP) and includes:
- Submission of the application by the interested parties with supporting documentation;
- Technical evaluation of the project by the MEP;
- Issuance of approval or rejection within the legally established deadlines, based on the criterion of business sustainability.
I.2 Economic association contracts
Economic association contracts allow joint projects between public and private entities without the creation of a new legal person, operating as a structured contractual cooperation mechanism outside the foreign investment regime.
Main characteristics:
- Entered into by public and private entities;
- Broad contractual autonomy within legal and regulatory limits;
- Each party retains ownership of its contributions;
- Possibility of establishing a common fund with defined participation shares;
- Formalisation before a notary and registration in the Commercial Registry;
- State entities may apply for licences to facilitate greater participation in foreign trade.
Conclusions
Decree-Law 114 represents a significant step in the evolution of Cuba’s corporate legal framework, substantially expanding the legal instruments available for structuring joint public-private projects. It introduces greater operational flexibility and a more defined regulatory framework for business partnerships, reflecting a gradual and controlled opening of the Cuban market more aligned with international public-private partnership practices.
Dávalos Abogados considers these changes a positive development for the country’s international business profile. In the current Cuban context, any measure that enhances legal certainty, regulatory predictability, and clarity in the allocation of rights, assets, and risks between parties contributes to strengthening investor confidence and supporting capital inflows. If properly implemented, these regulations could facilitate the exchange of experience between public and private sectors and contribute to genuine economic growth in an economy currently facing significant structural challenges.