New rules for Cuba's business sector. We explain what they mean in practice—and how to prepare.
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In June 2026, the Cuban government approved a package of 176 economic and social reforms. This is not a development plan designed for times of prosperity—it is being introduced under the most challenging circumstances imaginable.
The original document, spanning more than 40 pages, represents an ambitious undertaking. It is unrealistic to expect all the measures to be implemented at once. The government is likely to prioritize reforms that remove restrictions and create new opportunities, as these carry lower political costs. More complex structural changes—such as transforming state-owned enterprises into joint-stock companies, establishing private banking, or introducing VAT—will likely take longer to materialize.
Deputy Prime Minister Oscar Pérez-Oliva has announced that a first group of reforms will be implemented within the next thirty days, covering areas such as economic actors, central government administration, energy, agricultural recovery, pricing, labor and wages, trade and services, and the partial dollarization of the economy. As discussed during the recently concluded 22nd Congress of the Cuban Workers’ Federation, several new regulations are expected to be published before the end of July.
At AUGE, we have chosen to highlight the reforms we believe are most relevant to private businesses and entrepreneurs. This is not intended to be a comprehensive summary of all 176 measures, but rather a curated selection based on our experience supporting companies and entrepreneurs over the past several years. We have prioritized those changes that, because of their scope, potential impact, or ability to reshape the business landscape, deserve to be at the center of the conversation.
However, these reforms cannot be understood without considering the environment in which they are being introduced. Two important gaps are likely to emerge: the gap between political announcements and the regulations that are ultimately enacted, and the gap between those regulations and how they are implemented in practice. The first is common in many contexts, but in Cuba it carries particular significance, as official discourse often presents reforms as broader than the legal texts ultimately reflect.
The second gap is even more consequential. The wording of a regulation does not always translate into consistent implementation, since local officials responsible for enforcing it often have considerable discretion. Their interpretation can accelerate, delay, or even undermine what the regulation intends to achieve.
Key Transformations
The first major shift concerns foreign investment. Measure 119 promotes foreign participation in private businesses and cooperatives through joint ventures and international economic association agreements. In practical terms, a Spanish investment fund, a member of the Cuban diaspora, or a foreign company could acquire an ownership stake in a Cuban private business. However, this is far from a simple transaction: it requires due diligence, asset valuation, joint venture structuring, and approval from the Ministry of Foreign Trade and Foreign Investment (MINCEX).
The opportunity is clear, but so is the risk. Foreign investors often have greater financial resources, technology, and negotiation experience than local entrepreneurs. Without adequate preparation, Cuban businesses may find themselves at a significant disadvantage during the negotiation process.
The second major change is the reduction of prohibited economic activities. Measure 27 shortens the list of sectors reserved exclusively for the state, opening areas such as agriculture, energy, finance, and tourism to non-state economic actors.
This creates opportunities to enter industries that were previously off-limits. At the same time, greater openness may eventually allow well-capitalized domestic and international players to enter these markets—particularly if relations between Cuba and the United States evolve in the future. For smaller entrepreneurs, competing in sectors such as energy or banking could prove extremely difficult without sufficient scale, capital, or specialization.
A third major development is the opening of the financial sector. The reform package includes ambitious measures such as expanding private banking and non-bank financial institutions (Measure 84), allowing foreign currency accounts without prior authorization (Measure 86), introducing new credit products and restoring commercial lending (Measures 89 and 92), and creating a digital foreign exchange market with private exchange houses and auction mechanisms (Measure 99).
In theory, these measures should improve access to financing and foreign currency. Businesses may be able to open U.S. dollar accounts more easily and obtain financing from new private financial institutions. In practice, however, private banks are likely to prioritize larger and more profitable clients. Smaller SMEs may continue facing limited access to credit. Furthermore, the planned currency devaluation (Measure 100) will increase costs for businesses operating in foreign currency, while loans denominated in hard currency may become difficult to service if revenues remain in Cuban pesos.
The fourth significant reform is the elimination of the 100-employee limit. Measure 20 removes the cap that previously defined micro, small, and medium-sized enterprises. Businesses exceeding this threshold will simply be classified as private companies.
This removes an important legal barrier to growth, but scaling up also requires more sophisticated organizational structures, clearer governance, human resources policies, compensation systems, and stronger corporate culture. Growth creates opportunities—but also introduces new operational complexities and financial risks.
The fifth reform allows individuals to own or invest in multiple companies. Measures 21 and 23 eliminate the previous requirement to concentrate all business activities within a single legal entity. Individuals will now be able to own several private companies and hold equity stakes in multiple businesses simultaneously.
This creates opportunities to diversify investments, enter different industries, and build personal holding structures. However, diversification without a clear strategy can also dilute management attention, financial resources, and competitive focus. Owning several businesses is not necessarily better than building one exceptionally well-managed company.
The sixth major reform introduces new corporate structures, including joint-stock companies (corporations). Measure 22 expands the legal forms available to private businesses by allowing companies to organize as corporations capable of issuing shares and attracting outside investors without necessarily relinquishing operational control.
While this could significantly improve access to capital, corporations also require stronger corporate governance, greater transparency, and higher regulatory and tax compliance standards. Whether this becomes an attractive option will largely depend on how the implementing regulations are ultimately designed.
Finally, perhaps the most consequential reform is the announced currency devaluation. Measure 100 establishes a process of successive devaluations of the Cuban peso, while also stating that businesses unable to withstand the new economic conditions may ultimately be liquidated.
As the peso loses value against foreign currencies, operating costs are expected to rise. Businesses whose expenses are largely denominated in foreign currency while their revenues remain in pesos will face mounting pressure on their profit margins. For many companies, this could become the defining challenge of the reform process.
Periods of liberalization naturally generate optimism. New opportunities, fewer restrictions, and more flexible rules create expectations of growth. Yet these reforms should be viewed with pragmatism. What is truly changing is the competitive environment in which businesses operate.
Whenever the rules of the game change, some organizations adapt while others fall behind. This is not pessimism—it is realism. Success will not be distributed evenly. The businesses that thrive will be those capable of adapting quickly, accessing reliable information, and making well-informed strategic decisions. In the years ahead, preparation—not optimism alone—will be the decisive competitive advantage.
This is not about reacting; it is about building a process. We propose four practical steps.
First, conduct an internal analysis. Before looking at the market, look at your own company. Calculate your currency exposure by breaking down your fixed and variable costs in local currency and foreign currency. If the mismatch is significant—revenues in pesos, costs in dollars—that is your first red flag. Also evaluate your capital structure: Do you depend on a single partner? Do you have access to credit? Does your corporate purpose reflect all the activities you actually carry out? This internal assessment is the foundation of any decision.
Second, study the regulations. The measures will be published gradually. Do not speculate: read the legal texts as they appear in the Official Gazette. Do not rely on newspaper headlines or political announcements. Identify which changes directly affect your business and which are simply noise. If you are engaged in commerce, Measure 117 (elimination of price caps) matters more to you than Measure 104 (VAT), at least for now. Prioritize.
Third, assess opportunities and risks on two specific fronts. Regarding the reduction of prohibited activities: make a list of the sectors that are opening up and ask yourself whether you have a real competitive advantage to enter them. Having experience in logistics is not the same as launching a fuel distribution business. If you do not have an advantage, do not enter simply because the door has opened. Regarding foreign investment: if your company is in a position to receive foreign capital, prepare in advance. Organize your finances, clean up your tax records, and document your assets. A serious investor will conduct due diligence; if your records are not in order, you will lose the opportunity before negotiations even begin.
Fourth, establish an action plan with milestones and responsibilities. This is not a 50-page business plan. It is an operational document of one or two pages with three time horizons: what you will do over the next three months (survival: adjust prices, renegotiate debt, update your corporate purpose); over the next six months (preparation: evaluate conversion into a joint-stock company, explore partnerships, study VAT); and over the next twelve months (strategic: internationalization, acquisition of assets, corporate governance). Assign a person responsible for each action and set a review date.
The implementation of the 176 reforms will gradually shape a new operating environment for every business. They are not a magic wand. The government will likely move quickly on measures that open new opportunities, while the more structural reforms will take longer. The course of negotiations with the United States may also influence the pace and scope of what is ultimately implemented. Opportunities will be concentrated among those with capital, connections, and management capacity; the rest may be left behind in a process of consolidation
These reforms are only the beginning. In the months ahead, new regulations, interpretations, and implementation practices will shape the real operating environment for businesses.
At AUGE, we will continue to analyze these developments and share practical insights as they emerge. And if you would like tailored guidance for your specific business, we have the experience to help you navigate the road ahead.
