Cuban lawmakers OK key foreign investment law

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Associated Press

Posted on March 29, 2014 at 4:03 PM

HAVANA (AP) — Cuban lawmakers have approved a law aimed at making Cuba more attractive to foreign investors.

Meeting in an extraordinary session, parliament replaced a 1995 foreign investment law that has lured less overseas capital than the island's Communist leaders had hoped.

Foreign media were not given access to the closed-door meeting. But some details of the legislation emerged in official media in recent days.

Among other things, it would cut taxes on profits by about half, to 15 percent, and make companies exempt from paying taxes for the first eight years of operation. An exception would affect companies that exploit natural resources, such as nickel or fossil fuels. They could pay taxes as high as 50 percent.

Meanwhile, many foreigners doing business with the island would be exempt from paying personal income tax.

The changes are seen as vital for the island's struggling economy.

Cuba's GDP expanded 2.7 percent last year, below targets and weak for a developing nation. Government officials say the economy needs 5 to 7 percent annual growth to develop properly.

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