Cuba lets foreign firms sell wholesale and hire staff without a state agency

Cuba on Friday let branches of foreign companies import, export and sell wholesale inside the country, and allowed their commercial offices to hire Cuban workers directly. The rules appeared in the Official Gazette. Deputy Minister of Foreign Trade and Investment Deborah Rivas said the change is meant to cut the intermediaries who have sat between a foreign supplier and a Cuban buyer.

Until now a foreign firm could supply goods, and a Cuban importer cleared them, moved them and sold them on. Rivas told a news conference that the new text lets the foreign supplier do the wholesale distribution itself. She said fewer hands in the chain should mean lower prices. That claim is a ministry forecast, not a published price list. The operational change is clearer than the price effect: a branch can now hold stock and invoice a Cuban customer without handing the shipment to a state trading company first.

The hiring rule builds on Decree-Law 128, published in September, which amended Foreign Investment Law 118. That decree let businesses with foreign capital choose whether to hire through a state employment agency or to hire directly. Friday's provisions extend the same choice to commercial representative offices, which sit under a different regulation from joint ventures. An office that previously had to request staff from an agency can now put a Cuban employee on its own books.

Cuban legal entities also get a route around the old intermediary. They can apply for permission to import and export through the Foreign Trade Single Window, an online platform open across the country. The application still needs authorisation. What changes is the desk it goes to. A factory that wants a spare part no longer has to ask a trading company to file the request.

Rivas framed the package as a supply measure. Havana has spent two years trying to get inputs into domestic production after a collapse in imports. Foreign firms have complained that they can sign a contract and still wait on a Cuban intermediary for customs, trucks and a warehouse slot. Giving the branch those steps does not create foreign currency. It removes one state company from a transaction that was already short of dollars.

The employment piece is the part with a labour-market effect. State agencies have taken a cut for placing workers in foreign offices, and they have been the formal employer. Direct hire moves the contract, the wage negotiation and the dismissal decision to the firm. Decree-Law 128 opened that door for foreign-capital companies in September. Friday's gazette text is the extension to representative offices, which are more numerous than joint ventures and have been the usual way a foreign supplier keeps a person in Havana.

None of this is a general opening of retail. The gazette text, as described by Xinhua and by Rivas, covers wholesale distribution by branches, not shopfront sales to households. A foreign firm still cannot open a public store on the strength of this notice. What it can do is sell a container of inputs to a Cuban producer and employ the clerk who handles the invoice.

The same week, the UN's emergency fund assigned Cuba $4 million, the smallest envelope in a 12-country allocation. That grant and Friday's gazette notice answer different problems. One is humanitarian cash scored by OCHA. The other is a trade rule aimed at the cost of moving goods the state can no longer intermediate. The price effect Rivas predicted will show up, if it shows up, in the invoices branches issue after the Single Window starts approving the new permits.