Cuba’s new real estate visa

Cuba's new real estate visa

By José M. Pallí, Esq.



The Cuban Interior Ministry (MININT) chose May 20, Cuba's independence

day, to publish Resolución No. 4/14, which lays out the procedure for

foreign real estate owners to obtain a visa.



Foreign individuals (personas naturales extranjeras) who want to invest

in "owning" or renting houses in Cuba can obtain a special visa that

makes them a Cuban resident for such purposes, since only Cuban

residents can hold title to housing in Cuba under the present state of

Cuban law. The status lasts one year, but can be renewed yearly, without

a limited number of renewals. This MININT resolution also sets the

conditions affecting the visa holder's residence in Cuba.



Before we begin hollering and casting stones at this latest example of

moral turpitude on the part of the Cuban authorities (how dare they sell

to wealthy foreigners the 'right' to live in Cuba!!??), we may want to

take note of the fact that this is precisely what the United States has

been doing under its investor-type visas for many years.



At about the same time Resolución No. 4/14 showed up in the Gaceta

Oficial, our local authorities in Miami were celebrating our Magic

City's designation as an "EB-5 regional center."



When U.S. laws created this Immigrant Investor Pilot Program back in

1992, regional centers were meant to be in areas that were among the

poorest and in need of more assistance in the country. Miami, where real

estate prices are way beyond the reach of the average Miamian's income,

proudly claims to be the first city in Florida and in the Southeastern

United States to be so designated.



In the smallest of nutshells (since this column isn't about U.S. laws),

an EB-5 visa gives green cards to foreign investors and their family

members under 21 years of age who invest a minimum of $500,000 into a

project that, within two years, creates at least 10 jobs in the United

States. If those 10 jobs are not created within two years, the investor

may lose his investment and must go back home.



I know of no statistics showing winners and losers in this game, but I

don't even want to think about the trouble I might get into if I were to

tell you how I believe these investments compare, risk-wise, with

investing, say, in Mexico (or dare I say Cuba?). And that was before the

'program' evolved — the creativity of my fellow lawyers is limitless —

into what now covers investment in fancy real estate products. This is a

field that, especially in Miami, historically tends to be of a highly

speculative nature.



The Cuban visa for real estate investors requires, just as many of our

visa types do, a petitioner: Cuba's Tourism Ministry (article 2 of

Resolución 4/14). Together with the other elements you usually present

to obtain a visa anywhere (passport, pictures etc.), you need to present

a letter from the ministry, asking the MININT to issue you one of these

real estate-related resident visas.



The migratory category Cuba assigns to the holder of this visa type is

called Residente de Inmobiliaria (article 3), which, at first glance,

seems to suggest that the 'real estate resident investor' needs to be

housed at, say, the offices of Pedro Realty or some other realtor's

headquarters. And the reference found in the first of the 'whereas'

clauses at the beginning of Resolución 4/14 to houses in complejos

inmobiliarios, or real estate developments, suggests the petitioner may

not be likely to petition you for one of these visas if what you want to

buy or rent is one of these beautiful Vedado mansions in Havana. But I

would give it a try, nonetheless.



If you get one of these visas, you will have to request and carry always

with you an ID document (articles 8 to 13 of Resolución 4/14) that says

you are a real estate resident investor (something Americans are often

inimical to but is quite common in many places). You will not need to

live in Cuba all the time; you can spend a year abroad, without setting

foot in Cuba and still not lose your status as a Resident de

Inmobiliaria (article 6), and even extend your absence for a longer time

by asking for a waiver at a Cuban consular office.



During your stay in Cuba under this migratory status, you will be able

to engage in pre-authorized touristic and/or business activities of the

kind Cuba's law allows (article 14), and travel anywhere in the island

(wow…) in pursuit of such activities (article 15).



You lose your real estate resident investor migratory status (a) when

you are no longer an owner or tenant of a house in Cuba, (b) when you

stay away from Cuba beyond the time prescribed in article 6, mentioned

above, or (c) if your behavior is found contrary to Cuba's constitution,

its laws, or the conditions the visa places upon your stay (article 17).



In the same edition of the Gaceta Oficial (No. 25 Extraordinaria de 20

de mayo de 2014), you can read another resolution, this one from the

Ministry of Tourism. In Resolución 47/14, you will find your bearings as

to how you get this dependency of the Cuban government to become your

petitioner for one of these visas. This resolution also describes what

happens when a visa holder in this category does something (any of the

three situations listed in article 17 of the MININT resolution) that

leads to his losing his status as a Residente de Inmobiliaria. Article

11 of the Tourism Ministry resolution tells us that it is the

responsibility of the head of the entity that administers the real

estate development where the house or apartment in question is situated

to report to the Ministry of Tourism the circumstances affecting the

status of the visa holder who occupies that dwelling. The Tourism

Ministry then must, within three working days, report the situation to

the MININT explaining why the reasons behind the issuance of that

particular visa do not hold water any longer under those new

circumstances (article 12). After that, my impression is sayonara could

be just around the corner.



This Tourism Ministry Resolution also contains, in my personal opinion,

a strong indication that these visas will only be used for those who buy

or rent housing in a certain type of real estate development (and not

for isolated pieces of real property); the recurrent reference in the

two resolutions commented here to "el complejo inmobiliario donde está

ubicada la vivienda" strengthens my perception that this visa may not be

suitable for those foreigners who want to simply buy an old apartment in

a pre-1959 building in Old Havana: They will still have to buy it under

someone else's name, if they themselves are not permanent residents in

Cuba. Article 1 of Resolución 47/14 defines complejo inmobiliario as

"aquellos construidos por entidades cubanas autorizadas, con la

finalidad de la venta o arrendamiento de viviendas." ("those built by

authorized Cuban entities, with the goal of the sale or lease of dwellings")



But the thing I regret most is that neither of these two resolutions

shed any new light on the nature and extent of the rights of those

foreigners who buy real property in Cuba will get; what I wrote in a

previous column almost exactly a year ago still is, to the best of my

knowledge, all we know about that important topic.



Before there is a crystal clear answer to the question "what does

'owning' residential real property in Cuba by a foreigner entail?", it

will be hard to think of Cuba as a competitor for the US$550,000 each of

the many Chinese EB-5 aspirants must chip in to bet on a permanent and

unconditional green card. But even as things stand today, I would

hesitate to say who is the wiser investor. So who knows? Maybe some

people from China will still prefer to take the risk on Varadero than on

Brickell Avenue.



José Manuel Pallí is president of Miami-based World Wide Title. He can

be reached a jpalli@wwti.net.



Source: "Analysis: Cuba's new real estate visa « Cuba Standard, your

best source for Cuban business news" -

http://www.cubastandard.com/2014/05/27/analysis-cubas-new-real-estate-visa/