Last week, Cuba’s Decree-Law 114/2025, which regulates partnerships between private and public companies, came into effect. The Cuban government announced the law in early March and emphasized the urgency of the legislation amid the tightening of the US blockade against the island through the fuel blockade which has created what experts are calling “a man-made humanitarian crisis”. Without oil, Cuba cannot operate its electrical, industrial, health, educational, and transportation systems.
“In light of this critical situation, Cuba has opted to enact Law 114/2025, which ‘establishes the legal framework for interaction between state and non-state economic actors through the creation of joint limited liability companies, the acquisition of equity stakes, mergers by absorption, and economic partnership agreements,” Cuba Debate reported.
The law aims to attract and facilitate investments from Cubans and foreigners, in an effort to improve an economic situation that has been severely impacted by foreign sanctions, a boycott of the national economy, and other factors.
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A constitutional mandate
Although several international media outlets have claimed that the law is being implemented as a desperate measure by the government, the truth is that its application is protected by the Cuban Constitution, which was reformed in 2019 and approved by a majority of the population through a referendum. According to Article 22 of the Constitution, “mixed ownership is recognized as a legitimate means of combining state and non-state resources for the purpose of economic development.”
Economy Minister Joaquín Alonso Vázquez told reporters that the law fills a legal gap. He also explained that joint ventures must contribute to regional development, create jobs, and promote science and innovation in the areas where they are established.
Alonso Vázquez also stated that private entrepreneurs – who may invest alone or alongside other private capital and who will enjoy business autonomy – will be able to partner with state-owned enterprises in any sector of the economy; in other words, there will be no restrictions. He further stated that the decentralization of mixed-capital economic activities will be promoted, provided that the principles of transparency, order, and efficiency are respected.
As he explained, there are four types of partnerships between private and public companies: “the formation of mixed limited liability companies, in which entities contribute assets or rights or transfer their corporate assets to a new company; the acquisition, by a state-owned entity, of shares in existing private limited liability companies; the absorption of a private company by a corporation with 100% Cuban capital or a state-owned limited liability company; and the conclusion of economic partnership agreements.”
He also noted that “State-owned business entities—state-owned enterprises, corporations with 100% Cuban capital, state-owned MSMEs (micro, small and medium sized enterprises), and budget-funded units with special status—as well as non-state entities, including private MSMEs, non-agricultural cooperatives, and agricultural cooperatives, may participate in these partnerships. The regulation does not provide for the participation of individuals engaged in commercial activities.”
In addition, the minister explained that labor rights will remain unchanged for joint-venture companies, thereby respecting the rights won by workers throughout the Cuban Revolution.
“These provisions drive economic recovery, reinforce the decentralization of powers and business autonomy, and promote the participation of local non-state entities in national and territorial development. Likewise, they contribute to productive sovereignty, innovation, and job creation, strengthening the country’s capacity to advance its development strategy,” concluded Alonso Vázquez.
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