Want to do business in Cuba? Focus on what island wants
To do business with Cuba, first consider the island’s priorities and
culture, panelists say.
To do U.S. business with Cuba, focus first on the island’s priorities
That’s the advice from lawyers and entrepreneurs at a panel this week in
Hollywood during a conference of the Association for Corporate Growth, a
group focused on mergers and acquisitions.
The group discussed opportunities and obstacles stemming from the Obama
administration’s decision to re-establish diplomatic ties and ease
restrictions on commerce with the communist-led island of 11 million
residents 90 miles from Florida.
Cuba has spelled out through laws and rules what it wants from foreign
business: investment, technology, jobs, managerial skills, more
renewable energy and projects that help reduce imports. Panelists
advised potential business partners to make sure their venture fits into
that framework and to expect Havana will be cautious after five decades
of Cold War politics.
U.S. companies too often look at Cuba as a market open to their goods
and services and not a cash-strapped nation slowly shifting from central
planning to a mixed economic model, speakers said.
That misconception can come back to bite U.S. businesses exploring even
the limited activities allowed under the U.S. trade embargo that remains
in effect against the island.
“Your receivable might not get paid when you need it to be paid,” if
your venture is not a priority for Cuba, said Olga Pina, an attorney at
Shutts & Bowen specializing in international trade.
Showing respect for Cuba’s culture is critical to succeeding in a
business venture there, said entrepreneur Saul Berenthal, 71, who was
born on the island, built companies in the U.S. and now is working on
what could be the first U.S. factory in the Special Economic Development
Zone of Mariel. His factory would make small tractors to help private
Cuban farmers boost food production, which would in turn help the nation
reduce its food imports.
“A business in Cuba is not an economic entity. It has to accomplish a
social and cultural purpose,” said Berenthal, who has been visiting Cuba
for more than a decade, arranged exchanges with U.S. universities and
earned preliminary approval from Cuba for the factory. He named the
company’s first Cuban tractor model “Oggun” after the god or “orisha” of
metal in the Afro-Cuban Santeria religion.
The five-decade-old U.S. trade embargo, which can only be lifted by
Congress, limits U.S. companies to selling food, medicines,
agricultural-related products, some telecommunications services and some
As the embargo is eased or lifted, opportunities will open for call
centers, logistics and other service businesses that can employ Cuba’s
educated workforce, said financier Hy Vaupen of Vaupen Financial Advisors.
There’s also potential for mining of marble, nickel, limestone and other
materials and for heavy industry and construction, said Cuba-born Teo
Babun, managing partner at BG Consultants and known for his studies on
Cuban infrastructure and trade.
But developing opportunities will take homework, sensitivity to island
ways and building trust, said Richard Graves, a marina consultant from
Fort Lauderdale who has visited Cuba three times this year.
“You just don’t do business,” said Graves. “You have to build a
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Source: Want to do business in Cuba? Focus on what island wants – Sun