Cuba, Vietnam seek to tap trade, investment potential

08:37 | 21/05/2019 Cooperation

(VEN) - The number of investment projects and the amount of capital, as well as bilateral trade between Vietnam and Cuba, remain incommensurate with their potential. The Cuban government has introduced preferences to appeal for foreign investment, including Vietnamese investment.

cuba vietnam seek to tap trade investment potential
Textiles and garments are potential exports to Cuba

Opportunities

Marcel Casas Blanco, an official from the Cuba Chamber of Commerce, said Cuba had enacted Law No. 118 on foreign investment, and the new constitution of Cuba offers preferences to encourage foreign investment in the country.

Cuba has also promulgated a law on taxation with specific regulations protecting foreign investors against any complaints and proceedings from third parties. It allows free-of-charge overseas remittances in foreign currency. Cuba’s Mariel Special Development Zone offers investors favorable conditions.

Cuba imposes no taxes on exports and applies an average import tax of 10.7 percent, which will be further decreased when the Cuba-Vietnam Trade Agreement signed in 2018 takes effect.

The list of projects for which Cuba is calling for investment has been updated on an annual basis through the Havana International Trade Fair. The list currently consists of 525 projects, an increase of 69 projects compared with 2018. Cuba is calling for total capital of US$11.6 billion for these projects, 45 of which are based in the Mariel Special Development Zone.

The Cuban government offers tax exemptions for the use of labor. Personal income and corporate income taxes are also exempted throughout the period of project construction. After putting their projects into operation, investors will be exempted from income taxes for the first eight years. Cuba also offers greater preferences to foreign investors in the Mariel Special Development Zone.

“Cuba can offer a bridge for Vietnamese companies to penetrate the Latin American and Caribbean markets,” Marcel Casas Blanco said.

Cooperation potential

Vietnam currently is Cuba’s second largest trading partner in Asia and Oceania. Bilateral trade has grown considerably in recent years but remains modest, more than US$200 million annually.

According to Vietnam Chamber of Commerce and Industry (VCCI) Vice Chairman Doan Duy Khuong, the two countries have yet to tap the potential of bilateral cooperation, especially in agriculture, telecommunications, consumer goods, textiles and garments, footwear, pharmaceuticals, medical services, biotechnology products and construction - fields where the two countries can assist each other.

Cuban Ambassador to Vietnam Lianys Torres Rivera said that in 2018, Vietnam and Cuba exchanged a number of high-ranking visits. During his March visit to Cuba, the leader of the Vietnam Communist Party, Nguyen Phu Trong, witnessed the signing of 22 cooperation documents, including four economic contracts. “The Cuban government is committed to protecting foreign investors and will continue creating favorable conditions, as well as a more flexible legal basis, to attract more foreign investment. At the same time, further efforts will be made to increase bilateral trade and investment,” the ambassador affirmed.

Vietnam and Cuba are implementing their new trade agreement and a financial protocol on implementing a

cooperation project on rice production during the 2019-2023 period.

Ca Huong