Cuba opens door to more private business, but red tape looms

HAVANA (AP) — Opening a small business is a bureaucratic headache in many parts of the world. In Cuba, it's an adventure in largely unknown territory.

Most sorts of private businesses have been banned for more than 50 years, even if hundreds of thousands of Cubans in recent years have taken advantage of reforms that opened up cracks for small private enterprise in the once-solid wall of the state-dominated socialist economy.

Now, after five years of waiting, a new legal system takes effect on Sept. 20 that could greatly expand the scope of private businesses, and give them greater legal certainty in efforts to help an economy in crisis.

Cautious or enthusiastic, business executives are concerned about an inefficient credit system, the requirement to have U.S. dollars that the state itself does not sell and limitations on hiring professional services.

“Knowing that I can have a company, a business in Cuba, in my country, invest, take risks in the markets and that this is supported by law ... is peace of mind for me,” said Carlos Gómez, the 35-year-old owner of the audiovisual production company Wajiros Films.

The company has made at least 35 films since its opening in 2017, short, long and international co-productions, all under the label of “artistic creation collective” but without a legal status. That carries negative consequences such as the impossibility of having bank accounts, the lack of distinction between business and family assets, and the impossibility of importing equipment.

At the end of August, Cuban authorities published in the Official Gazette about 20 norms that allow and regulate small and medium-sized enterprises (SMEs), which were eliminated in 1968 in a revolutionary offensive against the last vestiges of private property.

At that time,...