That’s the advice from lawyers and entrepreneurs at a panel this week in Hollywood during a conference of the Association for Corporate Growth, a group focused on mergers and acquisitions.
The group discussed opportunities and obstacles stemming from the Obama administration’s decision to re-establish diplomatic ties and ease restrictions on commerce with the communist-led island of 11 million residents 90 miles from Florida.
Cuba has spelled out through laws and rules what it wants from foreign business: investment, technology, jobs, managerial skills, more renewable energy and projects that help reduce imports. Panelists advised potential business partners to make sure their venture fits into that framework and to expect Havana will be cautious after five decades of Cold War politics.
U.S. companies too often look at Cuba as a market open to their goods and services and not a cash-strapped nation slowly shifting from central planning to a mixed economic model, speakers said.
That misconception can come back to bite U.S. businesses exploring even the limited activities allowed under the U.S. trade embargo that remains in effect against the island.
“Your receivable might not get paid when you need it to be paid,” if your venture is not a priority for Cuba, said Olga Pina, an attorney at Shutts & Bowen specializing in international trade.
Showing respect for Cuba’s culture is critical to succeeding in a business venture there, said entrepreneur Saul Berenthal, 71, who was born on the island, built companies in the U.S. and now is working on what could be the first U.S. factory in the Special Economic Development Zone of Mariel. His factory would make small tractors to help private Cuban farmers boost food production, which would in turn help the nation reduce its food imports.
“A business in Cuba is not an economic entity. It has to accomplish a social and cultural purpose,” said Berenthal, who has been visiting Cuba for more than a decade, arranged exchanges with U.S. universities and earned preliminary approval from Cuba for the factory. He named the company’s first Cuban tractor model “Oggun” after the god or “orisha” of metal in the Afro-Cuban Santeria religion.
The five-decade-old U.S. trade embargo, which can only be lifted by Congress, limits U.S. companies to selling food, medicines, agricultural-related products, some telecommunications services and some travel services.
As the embargo is eased or lifted, opportunities will open for call centers, logistics and other service businesses that can employ Cuba’s educated workforce, said financier Hy Vaupen of Vaupen Financial Advisors.
There’s also potential for mining of marble, nickel, limestone and other materials and for heavy industry and construction, said Cuba-born Teo Babun, managing partner at BG Consultants and known for his studies on Cuban infrastructure and trade.
But developing opportunities will take homework, sensitivity to island ways and building trust, said Richard Graves, a marina consultant from Fort Lauderdale who has visited Cuba three times this year.
“You just don’t do business,” said Graves. “You have to build a relationship.”