9 Obstacles To Doing Business In Cuba

That article is about 9 Obstacles To Doing Business In Cuba. On the one hand, the U.S. trade embargo against Cuba would seem to be an excellent argument that there’s less competition in Cuba, making the island country a great potential market.

9 Obstacles To Doing Business In Cuba

On the other hand, there are significant obstacles to doing business in Cuba. Obstacles you have to consider, and deal with, before you earn your first peso.

Supply Difficulties

Essential supplies must usually be imported via the Cuban government. Not an easy task when financial considerations significantly reduce the warehousing of goods for quick delivery. Some business owners cite a six-month delay in receiving essential supplies, saying the only way to get by is to order in advance-way in advance.

Low Productivity, Theft, and Poor Customer Service

Two factors combine to create this problem. While the socialist model may offer a survival-level safety net and a measure of job security, there is little opportunity for earning raises or performance bonuses. And a lack of opportunity leads to a lack of incentive. Meanwhile, meager wages leave little disposable income, and both employees and customers may feel forced to turn to theft to survive. All in all, this creates a negative environment which will either express itself in low productivity (passive) or hostility to customers, coworkers, and management (aggressive).

Utility and Transportation Costs

Both utility and transportation costs are high. And the low income of the natives may disqualify them as potential customers, meaning you will have look elsewhere for customers, having to export from this tropical island. Probably through the Cuban government. Through a bureaucratic maze. At no small expense.

Conflict Resolution

In most Cuban businesses, the state is a majority partner. And what if there’s a conflict between partners? The state will provide a judge to decide. I’m sure you can see the problem with that.

Red Tape

Visas and work permits need to be renewed periodically. Cuban bureaucracy is notoriously slow, and tight controls make it essential for foreigners to keep their paperwork in order. And the Cuban government isn’t the only dispenser of red tape. Business that operates both in Cuba and the US may face sanctions from the US.

The Cars Aren’t the Only Thing from the 50s

Most 21st century businesses rely heavily on computers for everything from communications to record-keeping. But in Cuba it’s illegal to own a computer without a permit. For the lucky few who own computers, email is carefully monitored. How long has it been since you used a typewriter? Or kept your books on paper?

The Romance is Gone

While there was a period of time when Cuba welcomed foreign business, that welcome has cooled in the past few years – and there’s much more need for social work than there is for new foreign business. Observers have noted that small business is discouraged as “unneeded”, while the government still welcomes big businesses with huge influxes of cash to invest.

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