As of Monday 20 September, the regulatory package approved by the Cuban government on the legalization, regulation and operation of micro, small and medium-sized enterprises (MSMEs), as well as provisions on non-agricultural cooperatives, came into force.
According to the Economic Actors Channel of the Ministry of Economy and Planning, as of 5:30 p.m. local time on the 20th, the Economic Actors Platform had reported 75 applications for the creation of these new business modalities.
Although these structures can cover a diversity of economic activities (except for the 112 prohibited by the authorities), in the first phase of their constitution, the priority is food production and manufacturing (transformation of raw materials and supplies into food products).
“It was a measure long awaited by the non-state sector of the economy, since it guarantees the constitution of entities with their own legal capacity and its peculiarity lies in the face that these institutions may be state, private or mixed,” Antonio Romero, PhD in Economic Sciences, told Negolution.
Their classification will depend on the number of people employed, including partners: between one and 10 people in micro enterprises; between 11 and 35 in small enterprises; and between 36 and a maximum of 100 in medium-sized enterprises, modalities already existing under the denomination of self-employed work.
Romero assured that this regulation responds to the central documents of the economic transformation and to the recently approved Constitution, which clearly establishes that the Cuban economy is socialist and includes a diversity of agents: state, cooperative, mixed and private enterprises.
There are total of 1,400,000 non-state workers, occupied in the private, cooperative and a small group of joint enterprises (Cuban and foreign-owned), which currently occupies about 30% of sources of employment.
The professor also clarified that the regulations “close a parenthesis that has been open for a long time to institutionalize the existence of a non-state sector of the economy hit today by the pandemic and by the severe sanctions imposed by the U.S. government against the island.”
Official sources reveal that there are currently 602,000 self-employment licenses in the country, and with the implementation of the new provisions, many holders will change from self-employed workers to MSMEs or non-agricultural cooperatives.
