Saturday, August 8, 2015

Several caveats to be aware of before doing business in Cuba

Several caveats to be aware of before doing business in Cuba
12:00 a.m. Saturday, Aug. 8, 2015 | Filed in: Business

Get ready for another round of "Let's go do business in Cuba" enthusiasm
on Friday. That's when Secretary of State John Kerry is scheduled to
raise the Stars and Stripes for the ceremonial opening of the U.S.
Embassy in Havana.

Before you go rushing into a business venture on the island that was the
communist outpost in the Cold War, you might want to have a talk with
Ross Thompson at Classified Worldwide Consulting, which has an office in
West Palm Beach. Thompson, the firm's managing director, has a few
caveats to share.

In particular, Thompson cautions that Cuba's foreign investment and
business laws present six key challenges that Americans need to think
through ahead of time. They are:

1. The Cuban government will own a majority stake in the company. A
49-51 percent split is common, but Havana has required a larger share in
some sectors.

2. Your local workforce will be selected by the Cuban government. This
selection may not be based on skill or merit but by seniority or cronyism.

3. Cuban managers will be appointed to mirror your handpicked managers,
especially if your senior leadership includes Cuban exiles. The Cuban
managers will ultimately control many decisions, or influence them, when
dealing with your majority partner, the Cuban government.

4. Everything in Cuba is heavily influenced by Cuba's intelligence
service, the DGI. You must be very careful to guard your own corporate
proprietary information.

5. Vendors you may work with may be fronts, or "cutouts," for other
foreign intelligence services such as those from China, Russia, Iran or
North Korea. The capture and exchange of corporate confidential
information is a lucrative business, so guard your files.

6. The Cuban government's payment records and credit are poor. This
means your majority business partner essentially has bad credit, and
could present challenges for you when raising capital or seeking
contracts. However, it could also move you to the front of the line when
dealing with countries that have been historically friendly to Cuba.

All this being said, Thompson says he isn't trying to talk anyone out of
Cuba.

"There are a lot more difficult places in this world to do business in.
And there are a lot of companies making money in environments that are
more difficult. So don't be discouraged. Don't be dissuaded," he said.
"It's just, knowing about the pieces of the puzzle ahead of time will be
very important to operating down there with as few challenges as possible."

Source: Several caveats to be aware of before doing business in Cuba |
www.palmbeachpost.com -
http://www.palmbeachpost.com/news/business/several-caveats-to-be-aware-of-before-doing-busine/nnFkG/

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