Cuban Government Tightens Control Over Foreign Companies' Finances

The Cuban government has tightened its control over foreign companies' finances by implementing stricter banking regulations. According to Havana Times, foreign companies operating in Cuba have been informed that they cannot withdraw or transfer the currencies currently deposited in Cuban banks. This development has raised concerns about the stability of foreign investments in the country. The regime is offering these companies the option to open new types of accounts, termed 'real' accounts, which must be funded with foreign currency. However, reports indicate that even these accounts face hurdles when it comes to cash withdrawals and repatriation of funds. This action has been described as a tacit acknowledgment of a long-standing financial freeze affecting foreign entities in Cuba and extends a previously tested model that had already created difficulties for a select few companies earlier in the year.

CubaNet reports that the government’s measures are part of a broader anti-crisis plan aimed at addressing economic distortions, although the specifics of this policy remain vague. The Ministry of Foreign Affairs recently convened foreign diplomats to communicate similar financial mechanisms, hinting that a cutoff date for accounts would be established. After this date, only foreign currency received thereafter could theoretically be withdrawn or transferred abroad, leaving the status of previously accumulated funds uncertain.

The financial landscape in Cuba is increasingly precarious, with many foreign companies already struggling due to the severe liquidity crisis in the state banking system. The official exchange rate stands at 24 pesos per dollar, while the informal market sees the dollar trading for around 450 pesos. This discrepancy exacerbates the financial strain on foreign entities, which are also now required to pay rent and employee salaries in dollars, adding further pressure.

The overarching context includes Cuba's chronic external deficit, as the nation imports approximately 80 percent of what it consumes, largely due to the decline in local agricultural and production sectors. The government's monopoly on foreign trade means that access to hard currency is directly tied to state resources, complicating the ability of foreign companies to operate effectively. The decline in international tourism and reduced remittances through formal channels have further limited foreign currency inflow.

Experts believe that the Cuban authorities may be redirecting funds from foreign companies' accounts to meet external payment obligations, highlighting the government's reliance on these funds amid a severe economic crisis described by some analysts as the worst since the collapse of the Soviet bloc in the 1990s. The situation is compounded by ongoing structural issues, including chronic shortages of food, medicine, and fuel, along with frequent electricity outages and significant emigration of young labor force members. As the government continues to impose tighter financial controls, the implications for international relations and foreign investment in Cuba remain uncertain.