Many unknowns lay in the wake of the U.S.-Cuba economic embargo changes. Attempting to navigate the workings of an economy which has been forbidden for the past 50 years raises important questions: How will the establishment of business relationships with Cuban entities and a communist political system be implemented? Are the potential economic gains worth the risk and stress of navigating unclear regulatory burdens and legal stipulations? How does the Cuban marketplace compare to similar global markets? JLL explores these concerns in a new Special Report: Assessment of the Cuban Marketplace.
U.S. building supplies companies may benefit from the new market by shipping construction materials to improve infrastructure to private sector contractors, but current governance presents substantial complications.
The hospitality sector may have the greatest long-term opportunity for U.S.-based companies to enter Cuba. Airbnb has expanded operations to serve visitors to the island, airlines are announcing new flights to the country, and four ferry services have been approved by the U.S. to embark from Florida ports.
New regulations allow for a broader range of goods to enter the Cuban market, possibly leading to increased goods exported from the United States. It is important to note; however, development plans and economic expansion would have to occur prior to any significant trade increases.
Telecommunications operators are extended extra flexibility to participate within the framework of the Portfolio of Opportunities for Foreign Investment. Currently access to the internet is strictly limited, highly censored and cost prohibitive; and private residences are not permitted to have internet access. The amended regulations allow for the importation of software and hardware necessary to increase telecommunications to and from Cuba.
While the announcement of relaxed trade relations with Cuba was received with great anticipation for what’s in store for American businesses and opportunities for investment, thorough analysis of the amended regulations and their practical application reveals limited potential. We have already seen numerous economic envoys to the island since the announcement was made, and while many report a positive and fruitful experience, no solid contracts or purchase orders have been reported. No location is keeping a closer eye on the situation and potential opportunity than Florida, particularly South Florida.
Find details on the present opportunities, challenges of each endeavor and realistic assessment of viability in the Special Report: Assessment of the Cuban Marketplace.
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