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Cuba offers incentives to develop the port of Mariel

Cuba offers incentives to develop the port of Mariel
In an effort to attract investor to develop an economic free zone around the new port of Mariel, the Cuban government is offering tax and custom breaks.

The government has published regulations that enter force 1 November and include significant tax and customs breaks for foreign and Cuban companies while maintaining restrictive policies, including for labour.

The first phase of the new Mariel terminal, located north of the island, is near completion and should be open for business in early 2014. Brazil ‘s Odebrecht construction company began building the 800,000 teu facility in 2011, funded by a $900m loan from Brazilian development bank BNDES.

The port management is being handled by PSA of Singapore. The terminal will have a draught of 17.9 m and four super post-panamax cranes have already been delivered.  Mariel will be dedicated to domestic imports and exports with all cargo operations, presently out of the city of Havana, moved to Mariel.

The Mariel special development zone covers 466 sq km west of Havana in Mariel Bay, 45 km from the Cuban capital.

The zone will be administered by a new state entity under Cuba’s Council of Ministers, and investors will be given up to 50-year contracts, compared with the current 25 years, with the possibility of renewal. They can have up to 100% ownership during the contract, according to Cuba’s foreign investment law. Investors will be charged virtually no labour or local taxes and will be granted a 10-year reprieve from paying a 12% tax on profits.

They will, however, pay a 14% social security tax, a 1% sales or service tax for local transactions, and 0.5% of income to a zone maintenance and development fund.

TAGS: Ports