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The Prime Minister Manuel Marrero Cruz announced this Thursday that Decree-Law 114, which regulates associations between state and non-state business entities in Cuba, has come into effect.
"Today, Decree-Law 114 came into effect, regulating associations between state and non-state business entities, creating new business modalities to invigorate the economy and foster greater collaboration among the various actors," wrote Marrero on his X account.
The regulation was approved by the Council of State on December 10, 2025 and published in the Official Gazette on March 3, 2026, with a 30-day period for it to come into effect.
The decree establishes four forms of association: the formation of mixed Limited Liability Companies, the acquisition of shares in existing private companies by state entities, the absorption of private companies by state enterprises, and economic association contracts without the need to create a new legal entity, according to CubaDebate.
On the private side, micro, small, and medium enterprises with up to 100 employees and agricultural and non-agricultural cooperatives can participate, while individuals engaged in commercial activities are excluded.
However, state control remains a central focus: all operations require an explicit resolution from the Ministry of Economy and Planning, which has 10 days to respond.
Mixed entities will not be subject to the Economic Plan, but they must report to the State strategic indicators in areas such as energy, investments, foreign currency, and food.
Associations in the fields of health, education, and activities related to the Revolutionary Armed Forces and the Ministry of the Interior are expressly prohibited.
Economists have received the measure with skepticism. Elías Amor warned that no small and medium-sized enterprise should get excited or celebrate, as without changes in the general legal framework for business activities in Cuba, the private sector will remain subordinate to the State.
Ricardo Torres from the American University criticized the framework of centralization and bureaucracy of the decree, while Daniel Torralbas pointed out that the regulation might be more in response to immediate needs to strengthen state enterprises rather than a long-term strategy.
The Decree-Law 114 addresses a legal gap that has existed since the legalization of small and medium-sized enterprises (mipymes) in August 2021, when Decree-Law 46 explicitly prohibited mixed enterprises between state and private capital.
Since then, the government has approved nearly 10,000 SMEs as of January 2024, which employ 15% of the workforce and contribute 14% to the Gross Domestic Product, although the Cuban economy is facing a deep crisis marked by inflation, fuel shortages, and the collapse of the electrical system, a result of 67 years of communist dictatorship.
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