MSMEs 2026: Key Elements of a Revitalized Process

Since the door was opened in 2021 to the establishment of private companies in Cuba, the nongovernmental sector has been on a path of learning, adaptation, and resilience. Those who have attempted to navigate this process are well acquainted with the evolution of the legal framework, the practical environment, the Economic Actors Platform, the importance of articles of incorporation, and the delicate wording of the corporate purpose—whose requirements have changed on more than one occasion. However, during 2024, 2025, and part of 2026, many applicants faced a slowdown that virtually halted the pace of approval for new applications, creating uncertainty within the business community.

Today, that landscape has changed radically. Spurred by the announcement of the 176 measures to update the economic model and decentralize authority, the process of creating MSMEs has entered a new phase of practical revitalization. Municipal governments have taken the lead in reviewing, coordinating, and approving applications, restoring to the process the efficiency and stability that the law always promised.

As of September 2, 2026, new legislation has been published that specifies many of the elements announced in the 176 measures: Decree -Law 133/2026, which amends Decree-Laws 88, 89, and 90, together with Resolution 2/2026 of the National Institute of Non-State Economic Actors, establishes the definitive procedure for the creation of MSMEs.

At AUGE, we’re seeing it firsthand: a clearer process, a shorter path, and a landscape that has shifted in favor of those who want to formalize their businesses. Responses are starting to come in within weeks, not what feels like an eternity. If you’re a self-employed worker (TCP) thinking about making the leap to a legal entity, or if you have a business project in mind, now is the time to act.

Municipalities now have practical responsibility under the Municipal Development Directorate

The legal framework governing this process, established by Decree-Law 88/2024 and detailed in Resolution 148/2024 of the Ministry of Economy and Planning, has always provided that the Municipal Administration Councils (CAM) would be responsible for approving private MSMEs. The new legislation, which takes effect on September 2, 2026, reaffirms and clarifies this process: it is the responsibility of the Municipal Development Directorate, which reports to the Municipal Administration Council, to receive and process applications for the creation of MSMEs through the Economic Actors Platform.

Following a lengthy two-year transition period, this authority has been implemented in practice. Management now takes place at the municipal level. It is at the municipal level where applications are reviewed, changes are made, and approvals are granted. This decentralization has enabled municipal governments to become familiar with the projects intended to be developed within their territory and to interact with prospective partners. According to Resolution 2/2026, the Municipal Development Office has up to twenty (20) business days from the date of receipt of the application to approve or deny it. Once approved, a digital signature is applied to the document certifying the establishment of the MSMEs.

The applications pending on the platform are currently being reviewed, and applicants are being contacted. In our recent experience assisting clients, we have observed that the response time—including review, contact, and partner validation—typically ranges from 2 to 3 weeks before we receive the first indication that the municipality is reviewing the application.

It has been encouraging that we have documented full approvals in about two months, including a recent record of just 22 days from application to formal approval. This case confirms that processing times can be significantly shortened when the application is well prepared.

We can say there are signs that the process is back on track; while each application has its own particularities, these cases confirm that the process has moved forward and responses are beginning to arrive within weeks, not what used to feel like an eternity.

Interaction with municipal authorities is an advantage. A well-prepared application, with complete documentation and proactive communication, makes the difference between approval in 22 days and a process that gets stalled.

Even so, although municipal governments are responsible for reviewing and approving applications through the Economic Actors Platform, the subsequent steps required to achieve the goal of incorporating a company do not proceed smoothly. The bank, notary, and Commercial Registry handle, in that order, the opening of a bank account, the drafting of the company’s articles of incorporation before a notary, and registration to conduct commercial operations. In this stage of the process, there are reports of delays, limited office availability, delays in the appointment of notaries, and procedures that are not yet being completed within the expected timeframes.

Flexibility returns to the Corporate Purpose and the Work Plan

The wording of the corporate purpose has served as a barometer of legislative changes. In 2021, an almost unlimited range and combination of activities was permitted. Then, the 2024 regulations required that all secondary activities be strictly linked to a single primary activity, limiting diversification. Today, the pendulum has swung toward a more intelligent and flexible approach. Municipal authorities, supported by the National Institute of Non-State Economic Actors, have come to understand that diversification is synonymous with business sustainability.

It’s not just about which activities you apply for, but how you’re going to carry them out. The Business Plan requirement—which explains the operational aspects, the synergy between activities, and the positive impact of the business—has become the definitive tool for articulating a broad and diverse corporate purpose. We’ve seen how applications involving multiple activities, when well-supported by a solid business plan, have been approved without objection.

What’s working?

• Business purposes that combine complementary activities
• Work plans that clearly explain feasibility and impact
• Applications that demonstrate consistency among the proposed activities
• Entrepreneurs who can diversify their sources of income from the start

Don’t underestimate the importance of drafting the Business Plan. It’s not just any document; it’s your opportunity to explain your company’s vision, viability, and social impact to the municipal government.

The range of activities is expanding significantly

Every entrepreneur must understand the boundaries of the terrain they are navigating. While Decree 107/2024 set a benchmark, the landscape has expanded significantly with the entry into force of Decree 160/2026 (GOC-2026-412-O62), “On Activities Not Authorized or Subject to Conditions for Private Companies.” This new legal framework represents a substantial change: it broadens the range of businesses permitted for non-state actors, removing barriers that were previously insurmountable and establishing clearer categories, such as “authorizable or conditional activities.”

What has actually changed? Decree 160/2026 introduces regulations differentiated by type of economic actor, clearly distinguishing between:

• Activities subject to absolute prohibition: Not authorized for any non-state economic actor
• Unauthorized activities: Reserved for the State due to its sovereign function or critical infrastructure
• Conditionally authorized activities: Those that may be carried out upon prior authorization or certification
• Permitted activities: Everything not included in the list of prohibitions

Thanks to this expansion, sectors that were previously off-limits or highly restricted are now accessible. Examples of businesses that can now be established include a broad range of commercial activities (including medicines and fuels), the ability to offer professional services (still subject to certifications and permits), potential complementary educational services (without official certification), and broader logistics activities involving warehousing, among others.

The remaining challenge is that, although the range of opportunities has expanded, practical implementation still requires regulatory agencies to issue supplementary regulations to authorize certain specific professional or technical activities. Nevertheless, the general principle is one of openness: if your activity is not expressly prohibited or subject to conditions with no workaround, it has a place within your corporate purpose.

What was once prohibited may now be “authorizable under certain conditions.” Having advisors who monitor the supplementary regulations issued by the relevant ministries is vital to ensuring that no opportunities are left on the table.

At AUGE, we build projects

At AUGE, we understand that starting a micro, small, and medium-sized enterprise (MSME) is not just an administrative process. It is the realization of a dream, the formalization of an effort, and the first step toward sustainable business growth.

That’s why we don’t just fill out paperwork: we start by assessing the current reality and future prospects of the business to ensure that the applications submitted by prospective partners accurately reflect the company they aim to build. For us, starting a business involves:

1. Comprehensive consulting: We don’t just fill out forms. We analyze the business landscape, your strengths, your opportunities, and your medium- and long-term goals.
2. Strategic Planning: We help you design a corporate purpose that not only complies with current regulations but also allows you to grow and diversify in the future.
3. Robust Documentation: We prepare articles of incorporation and business plans that accurately reflect your business vision and convince municipal authorities from the very first review.
4. Support: We’re with you every step of the way, from the initial concept to final approval, answering questions and fine-tuning details based on any feedback that arises.
5. Up-to-date expertise: We constantly monitor legislative changes and municipal practices to provide you with the most accurate advice.

Our results are the primary source of the criteria we set forth. Every approval, every time record, and every satisfied customer is proof that our method is a proven approach in the field.

Every project deserves to become a reality

The period of uncertainty—during which some even considered “buying” an already-established MSME due to the slowness of the process—seems to be behind us. The 3 practical keys to your success:

1. Trust the current process: Deadlines are being met, and municipal governments are responding. The new timeline shows that you can receive approval in two months—or even less if everything is well prepared.
2. Diversify strategically: Take advantage of the flexibility of the corporate purpose and the expanded range of permitted activities, but back this up with a solid, well-reasoned Business Plan.
3. Update your knowledge: Base your application on the current regulatory framework (Decree-Law 88/2024 and Decree 160/2026), not on myths or limitations from the past.

If you’re considering starting your own business, diversifying your corporate purpose, or need to validate the feasibility of your business plan, our team of specialists is ready to advise you. It’s not just about filling out forms; it’s about laying the foundation for your company with the necessary rigor.