The Official Gazette of the Republic published this Tuesday, March 3, the Decree-Law 114/2025 “On the association between state and non-state business entities”a norm approved by the Council of State on December 10 and that completes, with considerable delay, a piece that was missing in the legal architecture of the Cuban economic model: the legal regime for the formal integration between the socialist state company and the national private sector.
The norm creates the figure of the Mixed Limited Liability Company (mixed LLC)non-existent until now in domestic commercial law, and also establishes the mechanisms for the acquisition of shares in already existing private companies, the absorption of a private LLC by a state entity and the conclusion of economic association contracts that do not imply the creation of a new legal entity.
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The need for a norm of this type had been pointed out for some time in Cuban economic debates.
In March 2024the economist Omar Everlenyin OnCuba, identified, among the main obstacles to the so-called productive chains, precisely “the absence of a legal norm that establishes and promotes joint ventures between Cuban legal entities.”
Prime Minister Manuel Marrero had anticipated some concepts of the future regulation in the National Assembly in December 2023, but the rule did not materialize until the end of 2025.
“How is it possible for a state company to rent its workshops, instead of chaining itself? That is giving up its productive capacity. What future do these workers have?” Marrero had commented then.
“We propose chaining, but the true productive chaining. ‘I have the workshop, the mechanics, but not the parts. And you, from the MSME, have financing to fix machinery and get things going as a whole, distribute benefits, rescue underutilized capacities,” added the prime minister.
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What does the law allow?
The decree recognizes as possible partners state companies, state LLCs, public limited companies with 100% Cuban capital and budgeted units with special treatment. On the non-state side, private MSMEs and cooperatives, both agricultural and non-agricultural, can participate.
Contributions can be monetary or in kind, and partners freely set the percentages of participation in the share capital, with no initial minimum required. When it comes to real estate or intangible property owned by the state, the appraisal is mandatory and must be certified by the Ministry of Finance and Prices.
The mixed LLCs will enjoy a set of business autonomy powers that include the possibility of exporting and importing directly, defining their prices within the framework of the provisions of the Ministry of Finance and Prices, determining salaries, operating bank accounts and opening establishments anywhere in the national territory or abroad.
A notable element is that these entities will not be subject to the Economy Plan, although they must report indicators of national interest such as energy carriers, currencies or food production.
The ministerial filter
The approval of any association falls on the Ministry of Economy and Planning, which has 30 calendar days to evaluate each request, with the possibility of extending that period to 60 days when socialist-owned assets of the entire town are involved. He National Institute of Non-State Economic Actors participates as a consultant in all processes.
Each operation—constitution, merger, spin-off, absorption, modification of partners or capital—requires a ministerial resolution. The decree stipulates that if a consulted body does not respond within ten calendar days, it is deemed to have agreed with the consultation and assumes responsibility for its inaction, a clause that seeks to avoid the bureaucratic blockages that in the past have delayed similar processes indefinitely.
The Resolution 8/2026 of the Ministry of Economy and Planningalso published this Tuesday as a complementary rule, creates an internal commission chaired by a vice minister to assist in the evaluation and approval processes.
Limited autonomy
Article 29 of the decree proclaims the “business autonomy” of the new companies, but the rule as a whole reflects the tension that has characterized Cuban economic policy in recent years: the search for greater productive dynamism within a control structure that is not abandoned.
As Everleny pointed out in another article about joint venturescompanies of this type usually have advantages that strictly private MSMEs do not have – such as access to foreign currency or export capacity – but they also face restrictions regarding prices and commercial margins that are not always compatible with the viability of the business. The prohibition of operating in health, education and armed institutions—except in the business systems of these sectors—additionally delimits the scope of the opening.
A pending step from 2021
Decree-Law 34 of 2021, which regulates the Cuban state business system, already contemplated the possibility of state entities partnering with non-state actors to create new legal entities, but the rule that would make it operational was never promulgated.
Decree-Law 114 covers that gap four years later, in an economic context marked by inflation, the energy crisis and the urgent need to articulate productive capacities that the State cannot activate on its own.
The decree comes into force 30 days after its publication in the Official Gazette. From that moment on, interested entities will be able to submit their applications to the Ministry of Economy and Planning to establish the first internal mixed companies in the recent economic history of Cuba.
