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US$1 equals 23 pesos For 36 years, U.S. business people have not been allowed to legally invest in Cuba. However, you may run across the odd American who has managed to figure out a way to sneak past the restrictions ... and thereby profit. He or she acts quickly and quietly, responding briefly, if at all, to questions about how it was done. I met one such entrepreneur who currently operates an export company on a tourist visa from a neighboring Caribbean island. No red tape. He just takes piles of stuff out of Cuba every month and sells it elsewhere. This businessman, who prefers to remain anonymous, says he has no competition: Few are actually buying from Cuba, he says: most investors are importing. And he may be on to something. Victor Ramirez, president of the Provincial Committee of the People's Power in Matanzas, said the same thing. The value of imports is growing faster than that of exports. So efforts are being made to increase the number of products available for export. In Matanzas, traditional exports include rope and cords, leather and rubber footwear, and the alcoholic beverages of the Arrechabala plant in Cardeflas. Our friend is not registered, and he is not a member of the local Chain her of Commerce (a requirement for most businesses). Local Cubans have no problem with his operation. They are eager for his money. He reported that the only hurdle he has faced has been learning Spanish-a must for foreigners conducting business here. Playing by the rules We don't recommend that you conduct illegal business in a country off limits to Americans. Still, you should be primed and ready to cash in on Cuba when it does open UP, as we predict it will very soon. This means researching and investing in the country's fastest growing industries. Tourism has surpassed sugar as the country's largest source of income. Tourism has seen annual increases of 20 % for the past six years and offers perhaps the most accessible opportunities for foreign investors. Foreign investment in tourism is approved pains taking on a case-by-case basis by the Council of Ministers. Varadero, the most popular beach near Havana, offers the greatest potential for joint-venture tourism developments between foreign corporations and the Cuban government. Already most of the hotels here are partly foreign-owned, and more are under construction. And these hotels charge high prices between $100 and $250 a night for some rooms. Foreign investment is also needed for new technologies, equipment, and raw materials for import and export. A few of the opportunities include:
The red tape for setting up a business in Cuba is similar to what investors found in Eastern Europe when it first opened up. Cubans don't think like natural-born capitalists think. Things simply don't work ... or don't happen. When you set up a business, the government is your partner. It must approve any potential deals here. The operator, technically the "owner" (in our case, the foreign investor), gets a percentage of the profits classified as "for owner." The government's participa tion doesn't lessen the chances for profit, however. Rumor has it that the Spanish-owned Hotel expects to get its money back in four years. Cuba rules If you're a Canadian or European interested in setting up business in Cuba, here are the steps to take. (If you're an American, take note too. Once Cuba opens up, American citizens are certain to replace Canadians with the highest number of tourists and investors on the island.) First, you must obtain a business visa. It will be valid for only one entry into Cuba and will be obtained 10 days after you present your application form. You are required to have a business visa in order to conduct official meetings or dealings with Cuban institutions or any company registered in Cuba. (You may request an application by fax.) When you apply to register a foreign company in Cuba, remember that all documents must be in Spanish and duly notarized by a notary public. If you are Canadian, they must be certified by the Ministry of Government Services of your province. Following are the documents required to open bank accounts and register a foreign company in Cuba: articles of incorporation of the company and its bylaws; certificate with the members of the board of directors actually in force; resolution of the board of directors; and appointed names and signatures of all authorized persons. Low salaries If you operate a business here, you won't be expected to pay your employees much. Salaries run between 150 and 300 Cuban pesos a month. Currently, a foreign joint-venture owner or manager of a hotel must approach one of the government's employment agencies when seeking workers. The agency will bill you for its services, and you must pay a 25 % social security and wage tax. he employee earns whatever the government-owned agency decides to any him. Not much. Still, there have been improvements. The government recently relaxed its laws for privately owned businesses. Increasing numbers of mall food kiosks have popped up long the streets. A growing number f entrepreneurs, the only citizens required to pay taxes (government employees still do not pay them), have been trying their hand at business. In this way, they may be able to take a decent living. The National Tax Office here even extended its office hours to midnight on March 1 to accommodate the several hundred last-minute self-employed income-tax filers. This is e second year that self-employed Cuban nationals, with the exception f farmers, must file income-tax returns. The progressive tax rate ranges from 0 % to 38 %. The Cuban Trade Commission Canada can provide details on starting a business in Cuba, on import/export opportunities, and on e best opportunities for foreign investors in Cuba; call (514)845191, or fax (514)982-9034. by Siri Lise Doub Ministry of Foreign Trade MINCEX), Ministerio del Comercio, Interior, Infanta 16, La Habafta Cuban Tourist Board, 372 Bay Street, Suite 408, Toronto, Ontario; tel 416)362-0700 Tanja Hernandez Devega, tel. (53332490; is a lawyer recommended foreign investors in Cuba Business Tips in Cuba, Calle 30, 302, Miramar, La Habafia, tel. 3-7)241-797, subscription price is A review of the ease of Sanctions President Clinton's move to ease sanctions in April resulted in the following changes: • U. S. Cuban-American families in may send as much as $1,200 a year to their relatives in Cuba. • The bureaucratic procedures for shipping medical supplies have been simplified. • The ban an humanitarian charter flights between the United States and Cuba has been lifted. Joint- Venture Options Businesses operating joint ventures in Cuba are subject to a 30% tax on net operating profits. You must pay an additional 25% tax on wages to the state employment agency for social security benefits and its administration payroll. Currently, 317 joint ventures exist in Cuba and 15 ac1ditional ones have been approved. The government is encouraging foreign investment for large projects. It limits investment for small projects unless the investor plans to introduce new technology or a new expors market. Cuban banks may also now provide some capital. The local publication, Business Tips on Cuba, has a page listing joint-venture prospects in every issue. Here are two current listings: El Centro de Diseño de Sistemas Automatizados offers Natura, a compact disk with an illustrated catalog describing species of plants and animals. The content is presented in a way that is accessible to children and aduits. Contact Avenida, 47 SIN entre 18A y 20, Mirarnar, La Habaña; tel. (537)235-153, fax 248-202. Another listing
is for Distribuidora Internacional de Peliculas, which offers Cuban motion
pictures for exhibition in movie theaters, on television, and via home
video. Available are feature films, cartoons, other short films, 35mm fílms,
and black-and-white films. Any Cuban cinematographic production can be
delivered in one year. Order, delivery, forms of payment, and means of
transportation for delivery will be discussed dírect1y with interested
parties. Contact Calle 23, No, 1155 Plaza La Habaña; tel, (537)344001333862,
fax 333032.
REAL ESTATE Buy the farm: gracious country living in Spain US$1 equals Pts 152 Since February, when we devoted an entire issue of International LiviW9 to the real estate, investment, and retirement opportunities we found in Spain, we've been looking for even more untapped potential there. Recently we found a little gem of a town-San Idelfonso-just an hour's drive north of Madrid, tucked away in the mountains. Here's why it's worth your attention: Nestled in the Navecerrada Mountains is the hidden pueblo of San Idelfonso, (or, as the Spanish call it, La Granja meaning "the farm"). For centuries, this town remained untouched and unnoticed, largely because it was hard to get to: The closest bus station is 12 kilometers (7 miles) away in the Roman city of Segovia. As yet, only adventurous weekend visitors from Madrid enjoy its majestic Alpine views, quaint cobblestone streets, and shady garden paths. All this is about to change, however. The scheduled high-speed train that will connect Madrid and northern Vallodolid will make commuting from nearby Segovia to Madrid a mere 30-minute journey ... rather than the one-and-a-half-hour trip required by bus today. This means that real estate in La Granja is almost guaranteed to appreciate considerably. The time to buy is now. Gracious living in La Granja Because of the exodus of inhabitants over the past two decades to industrial and financial centers, reale state prices here are still low, even for Spanish investors. One of my favorite listings is a renovated La Granja farmhouse. Sitting on 136 sq.-mts, it is listed at Pts 9.5 million. Following are additional promising properties in La Granja:
Life in this tucked-away village quiet and remote, and the mass tran sit system isn't as advanced as in nearby Segovia and Madrid. For this reason, and because there are many tiny towns worth exploring around La Granja, transportation is a must. To import your car to Spain, here's what to do: (3.) Show proof of payment of value added tax (16 % in all cases). (4.) If the vehicle was bought new, present your purchase invoice; if used, provide factory-price certification issued by its manufacturer. (This allows the government to assign a value to the vehicle.) (5.) Show proof of payment of customs duties. (An American car is charged 10 % of the value of the vehicle.) Note: Vehicles manufactured in Spain benefit from customs duty exemption. For more information, contact the Spanish Embassy, 2375 Pennsylvania Ave. N. W., Washington, DC 2003 7; tel. (202) 728-2338. by Hugh Shields Contacts
La Granja is a baroque village of 5,000 people, a number that already doubles during the high season. Most visitors make the trip here to see such understated tourist sites as the summer place of Phílip V, Spain's version of Versaílles. This 18th-century Bourbon palace was buitt by a team of French and ltalian architects and ¡mitates the style of the French Renaissance, with ornate gardens and an array of fountains that flow during the spring and summer. Other adventurers come for the waterfalls, hidden swimming holes, thick pine forests, and cascading rivers tucked in the thousands of acres of protected national forest surrounding the town. Rooms at La Granja Palace run about Pts 700 a night; teL (921)47-00-19, Spain: our Mediter ranean favorite For warm weather, rich cultural offerings, wonderful food, and reasonable prices ,head to the Mediterranean with our own Barbara Perriello October 12-25. Tour properties for sale in Andalucia, hear from expats who moved to Spain, and talk with our own panel of experts. Call (561)243-6276 for details. Stay in a Spanish monument The government has made a concerted effort over the past few years lo renovate historical buildings throughout Spain into hotels that pay for their own upkeep. The renovation of the Casa de los Infantes, the lower wing of the Summer Palace in La Granja, and its conversion into a parador, began three years ago, When it's finished, it will see even more visitors. Paradores offer a unique alternative to staying in a hotel or inn. To make a reservation at one of the many paradores in Spain, contact International Lodging Corporation, teL (800)772-4644. NEWS AND NOTES Titanic Down Under Be part of the maiden voyage of the Orient Express in Australia when it takes off December I Ith from Brisbane and arrives in Cairns for a New Years' celebration. The "Great South Pacific Express" boasts all the luxurious amenities of the original Orient: cedarwood walls, stained glass ceilings, and opulent sleeping carriages. Both package and independent tours are available. The 23-day Maiden Christmas Voyage package is priced at $6,999 per person. This price includes airfare from Los Angeles, as well as departure taxes, and travel insurance. Book before June 30th and receive a free upgrade to a sumptuous State Cabin on the train. Other departure dates and prices are available in 1999. Contact Sunbeam Tours, tel. (800)955-1818, fax (714)434-8009, rail@sunbeamtours.com Respect for elders The Japan National Tourist Organization has assembled a guide to 25 museums and art galleries in Tokyo and surroundings offering free or discounted admission to senior citizens (over 65 years old). Participating museums offering free admission include the National Science Museum, Tokyo National Museum, and the National Museum of Modern Art. For further information, contact the Japan National Tourist Organization; tel. (212)-757-5641. Paris at 50,000 feet Passengers on Air France domestic and European flights can now book their entertainment for the evening ahead, their hotel accommodations, and taxis from their seats. The on-board telephone service, JetPhone, allows passengers to make calls to anywhere in the world. Passengers using it to book their hotel rooms (free of charge) are eligible for two nights, weekend accommodation for the price of one at any Meridien hotel in Europe. The JetPhone service also offers an "event ticket line" for a wide range of events and concerts taking place in Paris. As an extra service, the Agence Ch6que Theitre will deliver ticket vouchers to any address within Paris. Contact Pat Cahill, JetPhone Ltd., tel. (353-61)706036, for further information. The dog days of summer For a dog lover, there is no more wrenching experience than having to look into your pet's eyes as you head off on a trip. Avoid the guilt. Take your dog with you. Christina Hunsicher, editor of Travelers' Tales. A Dog's World, pro vides tips for taking a trip that you and your dog will enjoy: 1. Start your trip with a healthy pet. 2. Make sure the health certificate, license, and all vaccinations are upto-date. 3. Take pet's identification with you at all times. 4. Be sure your dog is accustomed to traveling. 5. Plan ahead for all travel accommodations. 6. Make sure your dog has learned basic obedience commands. 7. Keep your dog leashed whenever possible. 8. Clean up after your dog. 9. Create an environment similar to that in your home. If you go on a trip to France, you won't have any problems with your pet. Dogs are accepted everywhere, and no hotel or restaurant would ever refuse their entry. Restaurants often provide bowls of water, while bakeries will often offer a biscuit. Many restaurants around the world have outdoor dining that will accommodate you all, but your dog may not be able to get a seat at your table as dogs do in Paris. Make reservations whenever possible-some motels have only a limited number of rooms available to pet owners. For further information about specific countries, contact Traveling Petowners of America, P.O. Box 6042, Omaha, NE 681060042, E-mail 102005.1316@compuserve.com. Summer in Germany finest castles If you plan a journey to Germany, don't miss the Castle Festival in Heidelberg. A riot of operas and concerts will open with classical symphonies by Tchaikovsky, Wolf, and Stravinskyjuly 31. A Spectacular Light Opera, The Student Prince, Sonata Evenings, Macbeth, and other offerings follow throughout the month of August. The spectacle at the splendid castle will end with choral and instrumental music by Brahms, Weber, and Schumann on Aug. 23. Ticket prices range from DM14 to 48. Call Tourist
Information in Heidelberg;
tel. 011-49-6221-19433, for further information
Now tax cuts on Cayman Brac The Cayman Islands are a prime tax-haven in the Caribbean. But many people have been turned off by the steep real estate prices and bad traffic on Grand Cayman, home to over 560 banks, it has the highest density of fax machines in the world. However, few people travel off the main island of Grand Cayman to the smaller islands of Cayman Brac and Little Cayman-both are worth your attention. In an effort to boost development on Cayman Brac, the government has dropped the 7.5 % duty on property and the 20 % stamp duty on imported building materials, the last two taxes left. This effort, which started in 1996, has no end date, and has helped to increase activity on the island. The government has created a completely duty-free environment. This tax break, together with a quickly improving infrastructure, puts Cayman Brac on course for rapid economic development. Creation of the exclusive 51room Cayman Brac Club, a newly renovated hospital with 3 resident doctors, a retirement center, a dental care facility, and one of the best dive sites in the world have helped position Cayman Brac as one of the hottest up-and-coming places in the Caribbean. Cayman National Bank, (345) 949-4655, has also lowered its interest rate from 3 to 2 % above prime (8.5 %), making mortgage rates easi on your wallet. "Real estate for investment on the Brac offers great opportunities right now," said Dervyn Scott, a Bri local and a real-estate agent there. I could not agree more. Ten years ago you could have bought real estate oi Grand Cayman for nearly one tenth its present value. I would not be su prised if the same economic boom that has engulfed Grand Cayman found its way to Cayman Brac in th near future.For further information contact: Paula Thompson at Coldwell Banker, tel. (345) 945-4411 or Dervyn Scott at Tranquil Reality, tel. (345) 948-1577. . |
