Cuba OKs rules on commercial zone at Mariel Port

Posted on Tuesday, 09.24.13

Cuba OKs rules on commercial zone at Mariel Port
BY ANDREA RODRIGUEZ
ASSOCIATED PRESS

HAVANA -- Cuba has approved tax exemption rules for a special commercial
zone at a massive port under construction west of Havana, in hopes of
luring more foreign investment as the country tries to lift its economy
with a series of reforms.

Signed by President Raul Castro and published this week in the
government's Official Gazette, the law says commercial operators in the
industrial park at the Port of Mariel will be exempt from labor and
customs duties, won't have to pay taxes on sales or services for the
first year and will enjoy a 10-year tax holiday on profits. After that,
profits will be taxed at 12 percent.

The 180-square-mile (465-square-kilometer) special zone aims to create
jobs and "promote increased infrastructure and activities that permit
the growth in exports, and the substitution of imports," the decree said.

Cuban authorities have recently recognized the need to attract more
foreign investment, which has waned in recent years although the
government has not made figures public.

Local employees must still be hired through state-run agencies, a
practice that is often criticized by foreigners doing business on the
island.

The rules take effect Nov. 1.

Cuba experimented with small special economic zones in the 1990s, but
they fizzled out without having a significant impact on the economy.

Mariel, about 28 miles (45 kilometers) west of the capital, is due to
come online around the end of the year and replace Havana as Cuba's hub
of shipping activity.

Havana decided to build the port after determining in 2009 that the Bay
of Havana could not be expanded to accommodate larger ships that will
begin passing through the Panama Canal in 2015.

Two-thirds of Mariel's $900 million cost has been financed with
investment from Brazil, whose president, Dilma Rousseff, is expected to
visit in January for the inauguration of the first stage of operations:
770 yards (700 meters) of docks and a container terminal.

"It's not just a port, it's a logistical system for the exportation of
goods produced here in Cuba," Rousseff said while touring the
construction site in early 2012.

Andrea Rodriguez on Twitter: www.twitter.com/ARodriguezAP

Source: "HAVANA: Cuba OKs rules on commercial zone at Mariel Port -
Business Breaking News - MiamiHerald.com" -
http://www.miamiherald.com/2013/09/24/3647890/cuba-oks-rules-on-commercial-zone.html#storylink=misearch