The director of the Office of the Mariel Special Development Zone (ZEDM), Ana Teresa Igarza, spoke to Granma International and provided a review of the main developments of the first two years of existence of the most important space for foreign investment in Cuba.
Focused on attracting investors and boosting infrastructure works, the Office follows a strategy of promotion, based on market research and planning, to ensure progress and guarantee the specific conditions that have defined similar special development zones across the world.
Igarza notes that from the beginning, the potential of the ZEDM, created in November 2013, has been publicized among business sectors from various countries of interest, but without strictly defining investors.
However, during the past year, promotion efforts have been directed toward countries, sectors and companies that have the potential to establish themselves in the ZEDM and actively contribute to its development.
The director noted that today advances in infrastructure are being made across an area of 43.7 square kilometers, located west of Mariel Bay known as “Sector A”, while at the same time developments across other sectors are being evaluated.
In 2015, the first Cuban based commercial companies were authorized to operate in the ZEDM. Two of these are 100% Cuban ventures: the Mariel Container Terminal and Mariel Logistical Services; two are completely Mexican owned: Devox Caribe and Richmeat de Cuba; one is Spanish: Profood Service; while two further projects are 100% Belgian: BDC Log and BDC Tec. The joint Cuba-Brazil enterprise, Brascuba Cigarrillos, was also authorized to build a plant in the zone.
According to Igarza, there are now plans to attract companies that promote industrial development, using modern technologies that are friendly to the environment.
“While we contemplate the generation of exports, we are focused on replacing what is imported. Therefore, we are prioritizing the biotechnology and pharmaceutical sectors, as well as electronics, the production of containers and packaging, mechanical and light industry and food,” she explained.
The establishment of construction companies and financial and banking institutions is also encouraged, and the presence of companies known as “developers”, who focus on creating infrastructure and preparing areas for rent to other investors, is also being evaluated.
“To become a logistics hub of reference in the Americas, we must attract the companies that best offer these services internationally and that is what we intend to do to achieve high quality standards,” Igarza added.
What other facilities have been developed?
We have managed to ensure that the Zone has multimodal connections, which means that investors who are established here will have various means of transportation to move goods or personnel.
Likewise, the “Ventanilla Única” system (an all-in-one documentation processing office) has also been consolidated, implemented for the first time in the country and due to become more important in 2016. We work with the agencies of the central government, as the ZEDM entails specific regulations, which require streamlined procedures and, on that basis, legal norms have been issued.
The Ventanilla Única system benefits investors, allowing them to process all permits, licenses and authorizations required for the development of their projects in a single location, which simplifies the paperwork and reduces the time it takes to obtain documentation.
What aspects support the ZEDM as the best option for foreign investment on the island?
The first advantage of investing in the ZEDM, and in Cuba, is our skilled workforce. Another vital element is the geographical position. In the ZEDM, the Ventanilla Única system and the special regulations applied are much more attractive than those applied in the rest of the country for foreign and domestic investment.
For example, with regard to corporate tax, while across the country the rate ranges from 15% for joint enterprises and 35% for companies with 100% Cuban or foreign capital, entities in the ZEDM enjoy tax exemption for a period of ten years. Subsequently, they pay only 12% and this is encouraging many businesses to look to invest in the area.
What is the Office currently focusing on?
We are immersed in the evaluation of proposals and in the coming months there will be new approvals. Progress has been made in expanding the north-south road and works are beginning on that running east-west, which will cross Sector A across the north.
The first investors’ plots are ready. Over time, more flexibility in procedures and better conditions will be secured, as users are assured the location of their plots and the basic services required.
What challenges can be foreseen in the future?
We want to be a special zone of excellence. For that, internally, we have to grow professionally and secure the establishment of world-leading companies. Another challenge, which does not depend on us, refers to the existence of the U.S. economic, commercial and financial blockade against Cuba.
One element that we always have in mind is that the project is conducive to replacing imports and generating exports. Both must go hand in hand. Gradually, as investments increase, these will influence the growth of Cuba’s GDP.
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