The Council of State of Cuba approved the Decree-Law 128, which amends Law 118, "Foreign Investment Law," in effect since 2014, with changes that relax labor contracting, expand access to international banking, and grant greater autonomy to foreign capital companies to manage their profits.
The regulation, signed on July 28 by Juan Esteban Lazo Hernández, president of the National Assembly of People's Power, and took effect immediately.
The text of the decree itself justifies the reform by stating that "the approved economic and social transformations make it necessary to update Law 118 and its regulations, in order to continue flexibilizing the management of foreign investment modalities."
The regulation is part of the package of 176 economic and social transformations approved by the National Assembly on June 19, 2026, which the regime presented as the largest economic opening in decades.
Access to international banking
One of the most significant changes affects Article 25 of Law 118.
The new text establishes that joint ventures and national investors involved in international economic association contracts "can open and operate accounts in banks located abroad, which they notify to the Central Bank of Cuba; likewise, they can arrange credit operations with foreign financial institutions in accordance with the current regulations in this regard."
The , published in the same Gazette No. 73, outlines the specific regulations for the opening of those accounts abroad.
Autonomy in the distribution of profits
The amended Article 29 grants the governing bodies of joint ventures and wholly foreign-owned enterprises the authority to "determine the allocation of generated profits, including the establishment of an incentive fund."
Contracts for hotel management, production, or services, as well as those for the provision of professional services, are excluded from this provision.
The same article also opens the possibility for workers to receive "incentives in foreign currency, provided that the foreign investment model generates them."
Direct employment contracting
One of the most significant changes occurs in the workplace.
The original Law 118 of 2014 required hiring workers through intermediary state employer entities.
The new Article 30.1 modifies this scheme: Cuban workers or foreign permanent residents "can be hired directly by joint ventures, wholly foreign-owned companies, or by the parties of the international economic association contract, or through employer entities authorized by the Ministry of Labor and Social Security."
The and the , also published in Gazette No. 73, complement this modification with the applicable procedural norms.
Article 31.2 adds that when companies choose to hire through an employer entity, they may request the replacement of a worker if they believe that "he/she does not meet their work requirements."
Revocations and deadline for the agreed version
The decree removes sections 2 and 4 of article 30 and article 32 of Law 118, as well as article 19 of Decree 325, "Regulation of the Foreign Investment Law," from 2014.
The Final Provision Second orders the Minister of Justice, Rosabel Gamón Verde, to publish within a period of 30 working days a "properly updated, reviewed, and reconciled" version of both Law 118 and Decree 325.
This deadline began to run with the publication of the regulation in the , which includes a total of eight regulations related to foreign investment, tourism, and foreign trade.
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