Cuba's first special economic zone spreads its wings
Driving 45 kilometers west from Havana, the capital of Cuba, you will see an open park in front of you. Under the blue sky and white clouds, factories rose from the ground, trucks roared and roared, and workers were busy at the container terminal. This is the Cuban Mariel District, known as the largest economic project in Cuban history. A person in charge of the special economic zone said loudly: "Dear investors, we are here waiting for you."
Economic projects have taken shape
The Mariel Special Zone, covering an area of 465 square kilometers, was launched in 2013. Cuba, which has implemented a planned economy for a long time, announced that it will create the country's first special economic zone, attract foreign investment through preferential tax policies, and promote the sustainable development of the country's economy through technological innovation and industrial agglomeration.
Here, you can see that the office of the administrative staff of the special zone and the three-story business center have already started operation. Banks, customs, telecommunications companies, legal consulting companies, etc. are all providing services to customers; the first logistics block has been formed, for The special zone provides services; large freight trucks are constantly heading to the important part of the special zone-the container terminal of the port of Marlère; many areas are still under development and construction, showing vitality.
Oscar Perez-Oliwa, Director of Business Evaluation of the Special Zone, said: "In the past three years since the establishment of the Marel Special Zone, it has developed 23 authorized users, including 13 wholly foreign-owned companies, 4 wholly-owned Cuban companies, and 5 joint ventures. The company and an international economic association, the project value is 960 million US dollars, will create more than 4,000 direct employment opportunities. Our investors come from Cuba, Brazil, Mexico, Spain, France, Portugal, Belgium, the Netherlands, Vietnam and South Korea, approved 8 of the users have already started operations."
The Iberoamerican Financial Corporation, a joint venture between Cuba and Spain, provides financing for special zone projects. The company’s commercial director Jose García said that Mariel is the main stage for Cuba’s economic development, and the Cuban market is full of opportunities. He said: "We must support enterprises, provide financing for them, help them gain a foothold in Cuba or the SAR, and provide funds for development projects."
In November last year, Unilever Zuher, a joint venture between Cuba and the Anglo-Dutch multinational consumer goods company Unilever, and the Brazil-Cuban Tobacco Company, a joint venture between Cuba and Brazil, began construction in the development zone. The business includes the production of cigarettes for export. Unilever used to sell sanitary products in Cuba, but later withdrew due to equity conflicts. The return to Cuba now marks Unilever's new development in this island country.
To be the new engine of the economy
Cuba promulgated a law in 1994 to allow foreign investment. In 2014, Cuba's highest authority-the National People's Power Congress passed a new foreign investment law to provide a preferential economic environment for foreign companies investing in Cuba. Cuba hopes to attract about 2 billion U.S. dollars in foreign investment each year, but so far this goal has not been achieved. Cuban leader Raúl Castro is vigorously promoting the development of economic and trade ties with countries in different regions, and Marlel shoulders the role of an engine driving the Cuban economy.
Here, all companies can enjoy special tax policies, such as exemption from 10 years of profit tax and related taxes on hired workers and imported equipment, and exemption from sales and service taxes in the first year of operation; in addition, Cuba’s political situation is stable, and human resources are sufficient and available. With professional capabilities, the SAR is quite attractive to foreign investors.
Perez-Oliwa said that the main areas that meet the needs of Cuban industry in the special zone are logistics services and biotechnology. “We are particularly interested in projects in the pharmaceutical industry and biotechnology, because this is our country’s more than 30 projects in the past. Areas where important achievements have been made during the year".
The SAR also encourages the use of advanced technology to develop food, consumer products and packaging materials. According to the characteristics of the Cuban labor force, Cuban workers can quickly and accurately absorb these technologies, thereby increasing Cuba's overall productivity.
Vietnam's Taiping Investment and Trading Company has been selling products in Cuba for 20 years. The company has decided to expand its business to the investment field, producing baby and adult diapers and feminine sanitary napkins, which are in high demand in Cuba and the region.
South Korea’s ArCo33 company mainly produces medical devices. President Li Jishi said: “Cuba imports 100 million disposable syringes every year. There is a huge market potential here.”
To inject confidence into the Chinese business community
China is Cuba’s second largest trading partner, but no Chinese company has entered the Marlère SAR.
Perez-Oliwa said that the SAR and other Cuban institutions have visited China many times for promotion and exchanges, jointly assessing the possibility of investing in the SAR, and also have regular meetings with Chinese delegations visiting Cuba. At the Havana International Expo held in November last year, many Chinese companies contacted the SAR. "There are already Chinese companies interested, and we are also discussing different projects."
According to the nature of the project and related laws and regulations, the Special Zone project needs to be approved by the Director of the Office of the Marel Special Zone and the Cuban Council of Ministers. The Director of the Special Administrative Region Office usually gives the approval results within 30 days of receiving the materials, and the maximum approval time for projects requiring the approval of the Council of Ministers is 60 days.
The industrial parks, modern ports, and container terminals in the Marlene Special Zone have all been activated. The port of Marlère is a natural port. The launch of the port of the Special Zone marked the formal "embedding" of the Port of Marlère into the port transportation system of Cuba and even the entire Latin American region, and injected a boost into the integration process of Latin America and the Caribbean.
It is worth mentioning that both the port’s digital operation operating system and the container terminal’s heavy-duty handling machinery come from China’s Shanghai Zhenhua Heavy Industries (Group) Co., Ltd. China's Huawei has also provided communication technology and equipment for the terminal, all of which have promoted the modernization and efficiency of the terminal. At present, every container entering and leaving the terminal can be weighed using the latest technology and scanned to determine the content.
Perez Oliva repeatedly expressed his expectations for Chinese companies. He said that Cuba needs to further inject investment confidence into the Chinese business community and familiarize them with the preferential policies and practices of the special zone.
The economic and trade potential of China and Cuba is huge. In 2015, bilateral trade exceeded US$2 billion. China’s “Yutong” buses, “Geely” cars, “Huawei” communications equipment, “Yituo” agricultural machinery, and “Haier” and “Midea” household appliances are well-known in Cuba. Cuba also sees China as a strategy to update its socio-economic model. partner. Perez Oliva said: "Cuba and China have too close economic and political relations, and I sincerely look forward to Chinese companies coming to the special zone for development."