Cuban parliament on Saturday approved a new foreign investment law aimed at attracting badly needed capital to the island country through tax cuts and facilitation measures.
The National Assembly passed the legislation unanimously in an extraordinary session chaired by President Raul Castro and National Assembly chairman Esteban Lazo, local news agency Prensa Latina reported.
The new law will be put into force in 90 days after being published by Official Gazette of the Republic.
The new legislation offers better tax advantages to investors by halving the capital income tax from 30 percent to 15 percent and exempting investors from paying it for eight years in cases of joint ventures with the Cuban state and partnerships linking foreign and Cuban companies.
The new law, which is to replace the current law that came into force since September 1995, also promises a climate of investment security including non-expropriation guarantees, according to official media reports.
Under the new law, all economic sectors will be open to foreign investment, except public healthcare, education and security, excluding the business side of the armed forces, officials said.
Cuba needs about 2 billion U.S. dollars in foreign direct investment annually to revive its economy, Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca, told local television on Friday night.
"If the economy does not grow at levels of about 7 percent of the gross domestic product ... we will not be able to develop," he said. "For this to happen, we need 2 billion to 2.5 billion U.S. dollars to come in foreign investment every year."
A week ago, Malmierca said the new investment law was aimed to spur economic development "without abandoning our socialist project," by offering "guarantees, incentives and better means to attract investment."
Cuban leader Castro said in February that Cuba has "a compelling need" to attract foreign investment to boost the country's economic and social development.