Are there business opportunities in Cuba?
Posted by Melenco Team in Business Strategies 22 Apr 2015
At first glance, the recent changes regarding Cuba might make it seem as though the country offers a lucrative business opportunity for foreign businesses, especially American based enterprises. If you are already trading with central/south america, or are looking into starting to trade you may also be questioning yourself whether this is a good time for you to invest in Cuba. Are there business opportunities in Cuba for your business?
Cuba can definitely be considered to be a lucrative business opportunity for foreign companies because Cuba is home to more than 11 million consumers. Cuba has a strategic location and its main port, the port of Havana is only 198 nautical miles away from the Port of Miami. In addition European companies have already paved the way for foreign investment and business on the island.
However, there are currently fewer than 250 foreign companies doing business in Cuba. Foreign investors tend to fall into two groups either the companies have seized their activities in Cuba due to money losses, or they have made money in Cuba but have the Cuban government take over the profitable venture. This indicates that it is possible and can be lucrative to do business in Cuba, but it is not all smooth sailing.
A matter to take into consideration is that each and every country has its own business climate. Cuba has a relatively harsh business climate in which the Cuban government controls the factors of production. In addition, despite the fact that Cuba counts with over 11 million consumers, these have limited consumer purchasing power. The average wage in Cuba is significantly lower than in other parts of the world, which makes purchasing imported goods difficult.