March 29 (Bloomberg) -- Cuban lawmakers approved a law that allows for full foreign ownership of companies and reduces taxes for overseas investors in President Raul Castro’s latest bid to open up the communist island’s economy.
Cuba’s National Assembly voted unanimously to introduce new tax exemptions for foreign companies and extend investment periods, state-run Juventud Rebelde reported on its website. The law will take effect 90 days after its publication in Cuba’s Official Gazette and may still be subject to modifications, the newspaper said.
The law aims to boost development of non-renewable resources, construction, agriculture, hotels and services, Juventud Rebelde said this week. Overseas investors will be granted legal protection from expropriation and allowed the foreign transfer of dividends or benefits, the newspaper reported.
The move is the latest loosening of Cuba’s foreign policy for Castro, whose brother Fidel ended his 1959 revolution against the Fulgencio Batista dictatorship by seizing control of the economy. Under the new plan, companies in joint ventures may be exempt from taxes of profits for eight years while other taxes may be cut in half, according to Juventud Rebelde. Natural resource companies may still face taxes as high as 50 percent, the report said.
Cuba is seeking outside support as authorities expect economic growth to slow to 2.2 percent this year from 2.7 percent in 2013. Investments in sugar, nickel mining and other industries rose 13 percent last year from 2012, according to Cuba’s statistics agency. The agency doesn’t list investment by source.
Cuba’s government approved a law in 2012 that no longer requires residents to apply for exit visas to travel abroad, easing restrictions that prevented most citizens from leaving the communist island for decades. The government in 2011 lifted a half-century ban on residents buying and selling property and last year announced a plan to eliminate the country’s dual currency system to boost efficiency and trade.
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