The Sobering Truth About Business in Cuba

Monday, November 23, 2015
Last week, there was an article in Forbes entitled, "What You Need To Know If You're Considering Doing Business In Cuba."

Its author is Mike Coates, president and chief executive of Hill & Knowlton Strategies Americas, who had just returned from the Havana International Trade Fair.

Amid the fluff, here are two important (and sobering) excerpts, for those who -- wittingly or unwittingly -- plead ignorance:

-- From what we saw, the jubilant mood of the international community is clouding the reality on the ground that the Cuban government is unwilling to bend its existing rules for conducting business. Under those rules, a foreign business must partner with the government and most likely agree to be represented by a state-owned law firm. Once that hurdle is overcome, management at the local level presents another complication: The permit to establish an office takes three years to obtain, and labor must be hired and paid through a government recruitment agency. It is illegal for an investor to pay employees directly, as a Canadian businessman recently discovered when he was jailed for breaking this law.

-- Our advice to companies looking to invest in Cuba is: Assess the opportunity carefully, hire good advisers, accept that government will be your partner, and, most important, be patient while proceeding.

And that's just the tip of the iceberg.

Add the fact that your business "partner" is a totalitarian dictatorship that imprisons, beats and kills innocent people; that your "partner" works against American interests throughout the world, alongside Iran, Russia, Syria and North Korea; and that these "rules" violate nearly every international labor and corporate ethics code.

How this can be acceptable to any principled businessman is simply a question we can't answer.