Cuba is at a critical juncture, marked by a deep economic contraction, a significant loss of working-age population, and increasing pressure to introduce reforms that will allow them to revitalize their economy. In this context, the Government has reiterated its intention to promote investment, particularly in participation of Cubans residing abroad.
Since last March, he announced supposed measures to promote the “participation of Cubans residing abroad in the country's economy, including their access to private businesses, productive projects and the national financial system.”.
However, the current system remains based on a centralized state control model that limits business autonomy, restricts private initiative, and generates high levels of legal uncertainty. Nevertheless, the measures announced by the Cuban government to date do not appear aimed at dismantling these limitations. On the contrary, everything indicates that they could to consolidate a model where economic activity remains subordinate to political decisions, without effective guarantees for economic actors.
The underlying problem: an economy organized around control rather than law
Since 1959, the Cuban economic system has been structured around a logic of centralized administrative management, in which state bodies not only regulate but also exercise direct business management functions. In particular, central state administration bodies have maintained decisive control over production planning, price setting, investment authorization, and the operational control of enterprises, blurring any separation between state and business functions.
Although official discourse has repeatedly invoked decentralization and greater business autonomy as necessities, historical-normative analysis shows that the reforms that have been implemented for decades have not reduced state control, but have reconfigured it through new structures and supervisory mechanisms.
This logic is reproduced in the draft bill on the Socialist State Enterprise —in circulation since 2023 and still not approved— which is presented by Cuban authorities as a necessary tool to consolidate state-owned enterprises as economic actors with more defined rules within the socialist model. Among its main innovations, it proposes the creation of the National Institute of State Business Assets (INAEES), Presented as an agency tasked with organizing and professionalizing the management of state property on behalf of the people, its design concentrates the powers of the owner in a single entity. Far from implying a true separation of functions, it reconfigures the concentration of power under a new structure subordinate to the Council of Ministers.
It is significant that, despite the preliminary draft not having been approved, in the session of the National Assembly in December 2025, the Deputy Prime Minister and Minister of Foreign Trade and Foreign Investment, Óscar Pérez-Oliva Fraga, announce its creation. This demonstrates the continuity of practices within Cuban institutions that are in open tension with the principles of legality and normative hierarchy, and confirms the commitment to a model of rigid economic centralization, despite the fact that the official discourse proclaims its objective as promoting greater business autonomy.
Legal uncertainty as the main barrier
One of the most critical problems for any investor—and particularly for Cubans abroad—is the lack of legal certainty. This is not limited to the absence of regulations, but also includes the impossibility of enforcing them against the state itself and the absence of an independent judicial system.
In the Cuban context, there is no separation of powers; instead, the 'socialist' principle of unity of powers prevails. This results in the courts operating within a structure subordinate to political power, reinforced by the constitutional recognition of the Communist Party of Cuba as the supreme force of the state and society. For an investor, this translates into the lack of effective ways to challenge potentially arbitrary decisions.
In terms of property ownership, the State maintains control over the main means of production, including land, the use of which is granted through limited mechanisms such as usufruct, subject to administrative authorizations and without full powers of disposal. Access to key sectors, markets, and operations depends on state licenses and approvals.
The inability to import or export directly without the intermediation of authorized state entities persists. The financial system reinforces these limitations. The scarcity of credit, weak integration with the international financial system, and restrictions on access to and use of foreign currency hinder investment, innovation, and business expansion. This system, characterized by a high degree of operational constraint, broad administrative discretion, and exposure to political criteria, creates significant legal uncertainty and discourages sustained long-term investment.
Considerations with a view to possible reforms
In the case of Cuba, it is crucial to understand that economic liberalization does not depend solely on sectoral measures or specific incentives. As long as a genuine separation of powers is not ensured—overcoming the current model of concentrated power under the political monopoly of the Communist Party—and the economic initiative of citizens is not fully recognized, any liberalization will necessarily be partial, unstable, and reversible.
Among the main imperatives are guaranteeing the effective protection of private property, opening access to land as an economic asset, and liberalizing foreign trade; that is, private companies must be able to import and export directly, without depending on state intermediaries that limit their efficiency. However, it is essential to point out that all of this, including attracting foreign investment, requires the existence of a dynamic domestic market and the effective recognition of free enterprise, which is currently nonexistent as a right in the Cuban legal system. At the same time, this can only develop in an environment of political freedoms, with effective guarantees, such as prerequisites for stability, confidence, and economic predictability. These conditions do not exist on the island.
Risks and verification criteria
The evolution of the Cuban economic model reveals a consistent pattern: cyclical reforms that modify the form but not the substance. Under various names (improvements, decentralizations, reorganizations), adjustments are introduced that do not alter the system's operating logic. This logic is clear: economic activity is not recognized as the result of a right to freedom of enterprise, but rather as an authorized, conditional, and reversible activity, where the State decides who can operate, in which sectors, with what resources, and under what conditions of permanence.
In this context, the main risk for economic and political actors, as well as the general public, is interpreting measures that, in practice, reproduce this control scheme as progress. In particular, they do not constitute signs of genuine openness.
— The recognition of entrepreneurial powers whose exercise continues to depend on state intermediation, supplementary authorizations or operational restrictions that empty them of content; for example, the capacity to set prices is recognized for non-state management forms, but these can be regulated or intervened administratively based on economic policy decisions.
— The lack of effective protection against the State due to the absence of independent judicial control and effective remedies against arbitrary decisions; which implies that any recognized right may be limited or not applied in practice.
— Sectoral or partial reforms that do not alter state control over the essential elements of the economic cycle. For example, the system may allow capital to enter but maintain control:
- the sectors and investment conditions,
- the assets in which one invests,
- the currency of operation,
- access to inputs and markets,
- and the allocation of profits.
— Any scheme in which economic activity maintains limited operating margins, and is not protected by entities independent of the political monopoly that governs the country.
A reform can only be considered substantive if it verifiably reduces the State's power to authorize, condition, or reverse economic activity. In this regard, signals such as the following should be monitored:
- elimination of prior authorizations to create, modify or expand companies;
- disappearance of mandatory state intermediation in key economic operations;
- effective reduction of sectors reserved to the State for the development of economic activities;
- independent and effective judicial guarantees against administrative decisions;
- real possibility of having assets, income and profits without authorization;
- real possibility of converting and transferring profits in foreign currency, even outside the country.
In this scenario, verification cannot be based on commitments without effective backing or promises, but rather on results sustained over time. This requires the definition of clear, public, and verifiable metrics that allow us to distinguish between administrative adjustments and real transformations. Within this framework, independent monitoring is crucial. It largely falls to civil society organizations in exile, whose capacity to document patterns, compare information, and evaluate the actual implementation of measures is key to preventing normalization processes based on merely formal changes.