Should US Entrepreneurs Make Their Way to Cuba?
Entrepreneurs: this could be big.
By James Paine
Founder, West Realty Advisors@JamesCPaine
There's a new possible hotspot for entrepreneurship that might surprise
Now that relations between the U.S. and Cuba are warming up, many
entrepreneurs see the island nation as an intriguing choice. When former
President Obama announced that he'd like to open up relations with Cuba,
thoughts of tourism and trade arose.
For entrepreneurs, Cuba could be a land of untapped potential.
Cuba has a struggling economy, but it also has a population of roughly
11 million -- and is a short flight from Florida.
Not long after Obama's announcement, companies started to dip their toe
in the Cuban market. While trade policies have been slightly relaxed,
it's still not a situation where a U.S. company could open up in Cuba.
Tourism rose roughly 20 percent after Obama's 2014 announcement and more
than 94,000 U.S. tourists visited Cuba in the first quarter of 2016, but
it's still a complex web for businesses.
In 2015, American companies such as PepsiCo, Caterpillar, Boeing and
American Airlines were present at the Havana International Fair, an
event usually sparsely attended by the U.S.
However, the hurdles toward building a successful business in Cuba are
endless. In addition to the lack of infrastructure in Cuba (it's still
largely a cash-based society, with little availability for plastic), the
U.S.-Cuba embargo remains in place.
There are still avenues for a determined American entrepreneur, though.
Experts have said that entrepreneurs who visit the island are more
interested in real estate opportunities, the hospitality industry and
establishing small factories in a 180-square-mile "free zone" outside of
Havana. Foreign entrepreneurs are able to own and operate businesses in
that zone, but only after being granted approval from the Communist Party.
Right now, most of the entrepreneurship is happening natively, as Cubans
start to gain more economical power thanks to the influx of tourism
dollars. The country's policies are still very insular, leading
Americans and other foreigners to work more with entrepreneurial Cubans
than trying to curry favor with the Communist Party in order to own a
Still, the seeds are being planted. Largely popular airline Southwest
recently opened up routes to Havana, and Carnival Cruise Lines docks in
the capital city, as well. It may take years for Western companies to
operate out of Cuba, but these are promising steps toward that future.
There are ways for entrepreneurs to gain a foothold within Cuba, but it
takes some coordination and teamwork. Americans are able to go into
business with Cuban entrepreneurs, or cuentapropistas as they are known.
The Cuban government allows these cuentapropistas to operate taxis,
shops and restaurants.
Right now, they are the best conduit for American entrepreneurship in
Cuba. Working with a cuentapropista is a great first step for the
determined entrepreneur wanting to learn more about business operations
in the island nation.
As more tourism comes to Cuba, that revenue could fuel a change in
thinking. Currently, the Cuban government and the Communist Party
strictly prefers that Western business practices stay away from the
island. But with an influx of tourism money, that could change,
especially if Cuba uses this money to build out infrastructure.
While it might be easier now (though still an arduous process) to travel
to Cuba as a tourist, it does not seem that the land is totally open for
The opinions expressed here by Inc.com columnists are their own, not
those of Inc.com.
PUBLISHED ON: JUN 5, 2017
Source: Should US Entrepreneurs Make Their Way to Cuba? | Inc.com -