HAVANA, Dec. 3rd (AP) In less than three months of application of a package of laws that allowed the opening of small and medium-sized private companies in Cuba after almost five decades of prohibition, the authorities approved almost 900 of them.
A report from the Ministry of Economy and Planning indicated that there are 901 new ventures approved under the rule that came into effect on September 20. Of these, 854 are private individuals, 18 state-owned and 18 cooperatives. Together they generate 14,162 jobs, the agency reported in a statement.
The opening of small and medium-sized enterprises (SMEs) was the last step in a series of gradual openings to the private initiative closed in 1968 when workshops, stores, warehouses or businesses were absorbed by the State or closed as part of a centralization similar to the of the allied Soviet Union.
Since then, private enterprises were socially stigmatized or clandestine until a package of measures was approved by former President Raúl Castro in 2010 -which allowed independent work but not the constitution of firms- in order to help an economy with low productivity and oversized state facilities.
The face of cities changed and thousands of Cubans began to open cafes and restaurants, start their cars to turn them into taxis or reform their houses into small hostels. Garages were transformed into workshops and small factories were set up. In 2019 there were almost 600,000 self-employed workers, many of them actually small and unrecognized medium-sized companies.
Currently, the Caribbean nation is suffering an economic crisis aggravated by the pandemic, its own inefficiencies and the sanctions of the United States that seek to suffocate the island by pressing for a change in the political model.
“It is a completely digital (registration) process. Altogether it takes less than a month, ”Carlos Miguel Pérez, the director of Dofleini, one of the newly authorized firms dedicated to software development with six partners and 47 employees, told The Associated Press.
“Then the Ministry of Economy reviews it looking for problems and inconsistencies … If you do not have errors in the application, as was the case with mine, it is approved in the same week.”
Pérez indicated that then you have to make a deposit account in the bank, go through the notary’s office and register in the tax office, among other administrative steps.
Dofleini also became a state contractor, setting up for the Ministry of Economy itself the platform that new entrepreneurs use to interact.
According to the new law, SMEs must be constituted as a Limited Liability Company and can have between three and 100 employees. These small companies can be private or state – for example depending on a university or ministry. The rule also makes the constitution of cooperatives more flexible.
“It has had various benefits,” added Pérez, who explained that now he can legally hire his employees, access a wholesale market – in his case the state telecommunications company ETECSA offers him business treatment -, exports and bank loans. “It has opened a bigger market for us. State and foreign companies see Dofleini as more attractive thanks to having legal personality ”.
Some entrepreneurs commented that the new laws and regulations for SMEs still have “gaps” such as the unionization of employees, procedures for cases of conflicts or inheritance and difficulties in registering names, among others.
The list of firms offered by the Ministry of Economy showed that among the approved SMEs there are dedicated to the repair of automobiles, agricultural or dairy production, construction materials, manufacture of furniture or mattresses, textiles or design services and even park maintenance.