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Lebanese set sights on Cuba investment opportunities

Lebanese set sights on Cuba investment opportunities
Elias Sakr| The Daily Star

BEIRUT: A recent agreement between the United States and Cuba to restore
diplomatic ties by the end of July has further bolstered interest among
U.S. investors who started scrutinizing business opportunities in Havana
as soon as the country was crossed off the U.S. terrorism list almost a
month ago.

But U.S. investors are not alone in looking to benefit from the
improvement in ties between the two countries. Investors worldwide are
anticipating a boom in the tourism and real estate sectors in Cuba once
the 53-year old trade embargo imposed on the country by the U.S. is lifted.

Although U.S. President Barack Obama has relaxed the embargo in terms of
restrictions on imports and telecommunications, Americans are still
banned from traveling to Cuba. Sanctions that remain in place also limit
banking transactions, making it enormously hard for Cubans to access
overseas financial markets and do business with the international community.

Almost a year ago, the flow of foreign investments into Cuba rose after
the government passed a more relaxed foreign investment law in 2014,
easing restrictions on foreign investments and providing tax incentives
to attract overseas funds.

Among the newcomers were a number of Lebanese businessmen who are now
looking to capitalize on the warming relations between the U.S. and
Cuba, says Ali Kazma, president of the newly formed Lebanese Cuban
Business Council.

The LCBC, an organization affiliated with the Beirut Chamber of
Commerce, Industry and Agriculture, was established in May with the aim
of promoting Lebanese investment in Cuba.

The council, which brings together 20 businessmen, kicked off its
activities with a visit to Havana in early June.

During their visit to Cuba, Lebanese business leaders met with their
Cuban counterparts and government officials to review investment and
business opportunities in the Caribbean country.

“The visit culminated in the signing of several agreements between the
Lebanese Chamber of Commerce and its Cuban counterpart,” Kazma says.

Discussions between Cuban officials and the Lebanese delegation, which
included a representative from the Economy Ministry, also touched on the
amendment of a trade agreement signed between the two countries in 1998.

While several members of the LCBC are already invested in Cuba, Kazma
says the council is particularly looking to capitalize on Havana’s
overture to foreign investments against the backdrop of improving
Cuban-U.S. ties.

Investment opportunities cover a variety of sectors, including tourism,
hospitality and infrastructure development. Kazma says some 254 business
opportunities across Cuba have been outlined in a booklet prepared by
the LCBC based on information provided by the Cuban government. To
further shed light on these business opportunities, the council is
preparing for the Lebanese-Cuban Economic Forum that will take place in
Beirut on Sept. 29.

Belal Malas, vice president of the LCBC, says the council is working to
actively engage businesses through sustained outreach, regular meetings,
active communication platforms and networking forums.

“At present, we are working on strengthening relations with potential
investors and working to attract new investors,” Malas adds.

The Lebanese-Cuban Economic forum will provide an opportunity to
introduce businessmen to investment laws in Cuba, Kazma says.

“The Cuban government is wisely opening up its economic system to
foreign investments as new laws and regulations have been passed to
create a more favorable business environment,” LCBC treasurer Marwan
Dimas says.

Cuba’s new foreign investment law allows 100 percent foreign ownership,
eliminates labor tax and cuts the tax on profits from 30 percent to 15
percent for most industries.

In addition to foreign ownership, foreign investments in Cuba can take
the form of joint ventures with the Cuban state or associations between
foreign and Cuban companies. Investors in joint ventures get an
eight-year exemption from all taxes on profits.

Of the many interesting ventures that the Cuban government has embarked
on is the creation of the first Special Development Zone in Cuba, known
as ZED Mariel.

Dimas explains that ZED Mariel, which retains its own favorable tax
laws, has succeeded – thanks to its business-friendly environment – in
attracting numerous investments since its establishment in 2013.

Every year, the government establishes a portfolio of foreign investment
opportunities across Cuba.

The latest portfolio issued by the state covers 11 sectors open to
foreign investment and comprises a total of 246 business opportunities
including 25 projects in the special economic zone of Mariel.

Lebanese businessmen are hoping to secure some of those deals by the end
of 2015, says Kazma, who is currently in talks with Cuban officials to
launch a boutique hotel and Lebanese restaurants in Havana. “Hopefully,
the deal over the hotel will be secured by the end of the year,” he adds.

Source: Lebanese set sights on Cuba investment opportunities | Business
, Local | THE DAILY STAR –
https://www.dailystar.com.lb/Business/Local/2015/Jul-07/305447-lebanese-set-sights-on-cuba-investment-opportunities.ashx

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