Cuba's Economic Opening
Cuba implements sweeping economic reforms, expanding private sector roles in tourism, banking, and food services.
Key Points
For tourism-related private services, the package would “put an end to decades of state exclusivity” and remove concrete limits for private firms, including lowering the operational barriers that previously included a “limit of 100 workers” and a ban on a single individual owning more than one company.
In the foreign-currency banking reform, Cuba’s government says deposits must be accompanied by a “declaration of the legal origin of funds and the right of withdrawal,” and the policy explicitly reverses the Central Bank’s June 21, 2021 decision to stop accepting U.S. dollar cash deposits—an earlier move that “severely impacted private businesses” reliant on foreign currency from tourism and remittances.
The currency-focused changes are framed against a widening peso crisis: one report cites the dollar trading at about “685 Cuban pesos” in the informal market versus “558 pesos” at the Central Bank official rate—an over “127 pesos per dollar” gap—said to be driving informal operations and undercutting the state’s ability to collect foreign currency.
The business-capitalization overhaul includes specific provisions: Measure 12 would “allow and encourage companies (including private companies) to make financial investments,” Measure 13 calls for instruments enabling capitalization “without the participation of the State budget,” and Measure 14 orders a National Program to value and title state assets—covering tangible and intangible assets—creating “executable property certificates” for bank-credit collateral and enabling state firms to monetize underutilized assets via long-term leasing (including to foreign investment).
On the food-service front, Prime Minister Manuel Marrero said Cuba will permit “the creation of restaurant chains, networks of light gastronomy of recognized brands or new ones developed here, extending across the country,” and he added the government intends to “invite international light food franchises” to invest and expand nationwide; the report notes this is a shift from previous rules that barred private firms from expanding beyond a single location and that Cuba previously had no official international fast-food franchises, despite local businesses mimicking brands under alternative names.
Cuba's National Assembly unanimously approved 176 sweeping economic reforms on June 18, ending decades of state exclusivity in tourism, banking, and food services, Reuters reported. Prime Minister Manuel Marrero Cruz presented the package, which lets private businesses run travel agencies, hire tour guides, operate car rentals, and build nationwide restaurant chains for the first time.
The reforms come as Cuba faces its worst economic crisis since the 1990s. Tourism has collapsed, with only about 1.8 million visitors in 2025 — less than half of pre-pandemic levels, according to CubaHeadlines. Hotel occupancy across the island averaged just 18.9% in 2025. The informal exchange rate has hit 685 Cuban pesos per U.S. dollar, versus the official Central Bank rate of 558 pesos — a gap of over 127 pesos per dollar driving a massive black market.
Tourism Opened to Private Hands After Decades of State Control
The reforms would end what Marrero called state "exclusivity" in tourism. Private firms can now operate travel agencies, tour guide services, and car rental businesses — sectors the state has controlled for generations, CubaHeadlines reported. The package also scraps the old rule barring any one person from owning more than one company.
Private companies will also be allowed to build restaurant chains and café networks across the island. Marrero said Cuba plans to "invite international light food franchises" to invest and expand nationwide, according to Market Screener. Cuba previously had no official international fast-food franchises. Local businesses had mimicked foreign brands under different names to get around the ban.
U.S. Sanctions and the GAESA Hotel Exodus Forced Havana's Hand
The timing is no accident. In May 2026, President Trump signed an executive order imposing secondary sanctions on foreign firms doing business with GAESA, Cuba's military-run business conglomerate. By June 5, major hotel chains had pulled out. Spain's Meliá left 15 hotels. Canada's Blue Diamond abandoned 62 properties, according to the research briefing. That left thousands of rooms empty with no international marketing partners.
Cuba's electrical grid has also nearly collapsed. Provinces are reporting blackouts of 20 to 30 hours a day. GDP is projected to shrink 6.5% in 2026, according to CubaHeadlines. President Miguel Díaz-Canel framed the reforms as "prosperous socialism," but acknowledged that "reality imposes urgent and necessary changes."
Banking Rules Reversed to Let Private Firms Hold Foreign Currency
Cuba will now let private companies, cooperatives, and small businesses deposit and withdraw foreign currency without forced conversion into pesos. The policy directly reverses a June 2021 Central Bank decision that stopped accepting U.S. dollar cash deposits — a move that "severely impacted private businesses" relying on tourism income and remittances, CubaHeadlines reported.
The government also plans to authorize private currency exchange houses and a real-time digital currency market. New rules will allow non-banking financial institutions to handle remittances. The peso crisis is a core reason: the 127-peso gap between the official and informal dollar rates has pushed roughly 90% of remittance activity into the black market, according to Market Screener.
Analysts Warn Reforms Mean Little Without Real Implementation
Economist Daniel Torralbas said the measures represent a "tacit recognition of the failure" of Cuba's command economy. But he cautioned that "Cuba hasn't been short of announcements; what's been missing is implementation." He questioned whether a "big private enterprise" could truly operate free of state interference, according to AFP.
In Miami, reactions ranged from cautious optimism to outright rejection. Dr. Andy Gomez of the University of Miami warned that investing in Cuba remains high-risk because "laws to protect investments and facilitate business" still do not exist, Market Screener reported. The Trump administration, meanwhile, views the reforms as proof that sanctions are working — but says only full "regime change" will ease pressure on Havana.
Sentiment
Mostly NegativePublishers
13
Articles
22
Reach
35
