The Cuban economist Pedro Monreal published an analysis this Friday warning that the latest reform to Cuba's foreign investment law relaxes operational aspects, but fails to address the question that matters most to any investor: if the investment fails, will it be possible to collect?
The analysis, titled "Foreign Investment Law: the Cuban diaspora, invited to invest and unprotected when litigating," focuses on the Decree-Law 128/2026, signed by the Council of State on July 28, 2026, and published in the Official Gazette No. 73 just one day earlier, on September 3.
Monreal clarifies from the outset that the regulation does not create a new foreign investment law, but rather modifies specific articles of Law 118 of 2014, and that his observations come from the perspective of an economist, not a legal expert.
Among the specific changes introduced by the decree are the removal of the requirement to hire workers through state employment entities—allowing for direct hiring—, the replacement of the prior authorization from the Central Bank of Cuba to open accounts in foreign banks with a simple notification, and the authority granted to the management bodies of mixed companies and wholly foreign-owned capital to decide the destination of their profits.
However, the economist points out that none of these modifications address Chapter XVII of Law 118, which governs the resolution of conflicts between investors and the Cuban state.
"The revised regulation relaxes banking services, utilities, and contracting, but does not redesign the procedural guarantees for investors. In fact, it does not modify Chapter XVII 'On the regime of conflict resolution,'" Monreal wrote.
That chapter establishes that conflicts are resolved according to what is agreed upon in the constitutive documents, with the possibility of resorting to the Economic Chamber of the Provincial People's Court or to arbitration instances in accordance with Cuban legislation, without guaranteed access to independent international arbitration.
"In practical terms, Chapter XVII of the revised Law 118/2024 states that if a conflict arises, it will be difficult to submit it to a neutral arbitrator and enforce a favorable decision," the economist warned.
The analysis comes amidst a wave of legal reforms that the Cuban regime has portrayed as a historic opening to attract capital from the diaspora, against the backdrop of a severe economic crisis.
In April 2026, the Council of State approved Decree-Law 117/2026, which established the migratory category of "Investors and Businesses" for Cubans residing abroad, published in the Official Gazette on May 5. This designation allows expatriates to invest in MSMEs, open foreign currency accounts, participate in investment funds, and develop agricultural businesses on leased land.
In July, Decree 153/2026 amended the regulations of Law 118 to expedite the evaluation and approval of investments. Despite this series of openings, Monreal has consistently maintained throughout 2026 that without real legal guarantees — independent arbitration, guarantee funds against political risks, protection against expropriation, and commitments to non-retroactive regulation — many emigrants would prefer to continue sending remittances rather than risking capital on the island.
The subtitle he chose for his analysis summarizes his position: "Flexibilization of foreign investment without reducing the risk of default."
"The recent review of the Cuban foreign investment law does not clearly answer a decisive question for any investment committee: 'if this goes wrong, will we be able to collect?'" concluded Monreal, who left the door open for legal experts to complement the analysis from their area of specialization.
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