Cuba Culture of Business

By | July 24, 2022
Basic data
Capital Havana
Population 1 million
Language Spanish
Religion Christian (59.2%), Atheist (23%), Afro-Cuban Religions (17.4%), Other (0.4%)
State system one party government
Head of State Miguel Díaz-Canel Bermúdez
Head of government Manuel Marrero Cruz
Currency name Cuban peso (CUP)
Travel
Time shift -6 hours
Economy 2021
Nominal GDP (billion USD) 147.4
Economic growth (%) 0.1
Inflation (%) 255.2
Unemployment (%) 3.7

Cuba is the largest island nation in the Caribbean, it is a socialist country with a communist regime and a total population of 1 million. President Miguel Díaz-Canel embodies the continuity of the communist leadership of his predecessors, the Castro brothers. The economy is centrally planned and the state has full control over the production processes. The significant drop in tourism due to the pandemic was manifested in 2020 by an 11.3% drop in GDP. In 2021, despite the efforts of the Cuban government, it was not possible to achieve more fundamental growth. GDP increased by just 0.1% year-on-year. Stronger growth is likely only in 2023-25. A significant source of income beyond tourism is the provision of medical services abroad and remittances. The currency reform introduced on January 1, 2021 and the critical shortage of foreign exchange resources resulted in a huge increase in inflation. Prices have increased by more than 250% year-on-year. The unemployment rate is stable, ranging up to 4%. In 2021, the EIU estimated public debt at 212.5% ​​of GDP, however, the Cuban government does not publish public finance data. The trade balance has been in deficit for a long time, as up to 80% of food and goods are imported to the island. The main export items are alcoholic beverages, tobacco, nickel. The way out of the current crisis is to increase production and exports, restart tourism and attract foreign investors. Despite the current difficult economic situation, Cuba remains an interesting market. Opportunities for Czech exports exist mainly in agricultural and food production, as well as in the healthcare, energy, construction and mining sectors and services. All foreign trade is conducted through state-owned foreign trade enterprises. Formality is expected in business dealings, contact with the Cuban side must be maintained regularly, it is always recommended in person. A good knowledge of the Spanish language is essential. Cuba has been struggling with a serious lack of foreign exchange reserves for a long time and has long been in the 7th, i.e. the worst, credit risk category of the OECD, which is reflected in the lack of attractiveness for potential Czech exports and investments. The US embargo remains in effect. The deteriorating economic situation in the country leads to nervousness of the communist regime and an increase in repression against independent journalists and representatives of civil society. Cuba is facing a strong wave of migration from the island and thus the loss of an economically active population.

  • Beautypically: Overview of Cuba, including popular places to visit, UNESCO World Heritage List, climate, geography and travel advice.

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public holidays

Introduction

In order to establish a good relationship with business partners in Cuba, a good knowledge of Spanish and frequent personal contact are essential. It must be remembered that the country is a centrally planned economy and negotiations take a long time. You can’t expect a deal to be closed on the first meeting. Formality is expected in business dealings, despite the fact that Cubans are very welcoming and friendly.

Addressing

It is addressed by an academic title or function. Two surnames are used in Cuba. First by father, second by mother. In business relations, only the first of them can be used for addressing, i.e. after my father.

  • Programingplease: Yearbook 2010 of nation Cuba, including population, politics, and abbreviations.

Business meeting

A business visa is required to attend a business meeting. Meetings take place at the company headquarters during working hours, usually 9-11 a.m. and 2-4 p.m. Invitations outside the company headquarters are usually politely declined. Punctuality and maximum professionalism are expected from the foreign partner. At the meeting, it is recommended to bring a small attention for the Cuban partner, e.g. typical Czech products, possibly advertising items, etc. When greeting Cubans, at the same time as shaking hands, they also often give a kiss on the cheek, which nowadays is rather implied. Usually at least two people participate for the Cuban side. Formal attire is recommended for the meeting, a tie and a suit are not required for gentlemen. The course of the meeting usually does not differ from the European way, coffee and water are served. It is recommended to focus on the topic of financing and maturity by the Cuban partner. Contact with the Cuban side must be maintained regularly, it is always recommended in person. Despite the appearance that a concrete agreement has been made, it is necessary to count on the fact that the Cuban side will have to be urged often and the negotiations usually last several months.

Communication

The official language in Cuba is Spanish, knowledge of which is essential for successful business with the Cuban side, as well as frequent personal contact. The other most commonly used languages ​​are English in business and tourist relations, French, Italian and German for relations with tourists, and knowledge of Russian from the past often persists. Visit Calculatorinc for more information about Cuba culture and traditions.

It is not recommended to talk about the political situation or comment on the economic situation of the country in the course of business relations.

Recommendation

For business negotiations with Cuban partners, it is important to remember that Cuba is a socialist centrally planned economy, where the so-called foreign trade enterprises have a monopoly on foreign trade. In business negotiations, the Cuban side is often bound by regulations on what business terms it can agree to. This means that it is not completely in the business partner’s power to decide on all the details of the contract. Sometimes, however, it also happens that the Cuban side deliberately refers to this circumstance in order to force the other side to make concessions in order to speed up negotiations. When negotiating the payment terms of the contract, it is a good idea to require high-quality payment security.

Public Holidays

January 1 and 2 – Victory of the Revolution (major holiday)

Good Friday

May 1 – Labor Day

July 25-27 – National Insurrection Day (Moncada Barracks attack on 7/26/1953)

October 10 – The beginning of the struggle for independence, the liberation of the slaves in 1867 (Grito de Yara)

December 25 – Christmas – declared a holiday since 1998 after the visit of Pope John Paul II.

December 31 – End of the year

Cuba Culture of Business