Cuba Approves Sweeping Economic Reforms, Authorizing Private Banking

Cuba has enacted a sweeping set of 176 economic reforms, a swift and urgent response to a six-year economic crisis. The measures aim to liberalize and decentralize the island's economy, introducing significant changes such as the authorization of private banking and new avenues to attract capital from the Cuban diaspora.

The reforms, rapidly approved by the Communist Party's Central Committee and the National Assembly, permit private financial institutions, both non-bank and non-financial, to operate under the supervision of the Central Bank of Cuba. These entities will be on equal regulatory footing with state-run banks. Additionally, the government will allow individuals and legal entities to open foreign currency accounts without prior administrative approval, and will eliminate restrictions on foreign currency payments between businesses with foreign capital and their national suppliers.

Further changes include extending land use rights for foreign investment up to 99 years and usufruct rights for over 50 years, allowing foreign investment in historic zones like Old Havana. The reforms also aim to streamline commercial bureaucracy and allow foreign investors to access the exchange market and freely use their foreign currency income.

For the private sector, the reforms will authorize all pending applications for economic actors, with those exceeding 100 workers now recognized as private companies. Individuals can now own more than one private enterprise and develop additional activities beyond their primary business scope. Notably, for the first time, private micro-enterprises will be permitted in the agricultural sector, an area previously limited to cooperatives.