Hunton Retail Law Resource

The recent change in U.S. policy towards Cuba and a “thawing of relations” between the two countries has generated increased interest among U.S. companies in the potential for business in Cuba. Despite this increased interest, companies should proceed cautiously, as recent international investments in Cuba, often in the form of joint ventures, have yielded mixed results and experiences. British-Dutch multinational consumer goods company Unilever plc, for example, formed a 50/50 international economic association with state-owned enterprise Suchel in 1994, but subsequently left the Cuban market in 2012 due to government intrusion and labor issues.

Even before the changes in U.S. policy towards Cuba, Cuba had begun the process of amending its foreign investment and labor laws to address some of the issues encountered and raised by potential international investors. The enactment of updated Cuban investment laws in 2013 and 2014 appears to have encouraged certain foreign companies, such as Unilever, to return to Cuba. Furthermore, the progress made in U.S./Cuba relations since December 2014, which has resulted in multiple changes to the U.S. regulations relating to Cuba and expanded the types of authorized transactions with Cuba, has increased confidence for U.S. companies, like Alabama-based Cleber LLC, seeking to enter the Cuban market. As a result of all these recent changes, non-U.S. companies and U.S. companies alike are looking for opportunities to engage in business in Cuba and attempt to secure prime mover advantage.

Read the full alert.