Cuba Legalizes State and Private Business Partnerships Under New Decree-Law

Cuba published Decree-Law 114/2025 in Gaceta Oficial No. 24 on March 3, formally legalizing associations between state-owned enterprises and private businesses for the first time in decades. The regulation, approved by the Council of State on December 10, 2025, and signed by National Assembly President Juan Esteban Lazo Hernández, takes effect 30 days after publication, placing its entry into force at the beginning of April 2026.

The decree's centerpiece is a new legal structure called the mixed Limited Liability Company, or mixed LLC, which allows a state enterprise and a private one to combine assets and operate jointly. According to reporting by El País, these entities gain the authority to decide what goods and services to offer, set prices and wages, operate bank accounts, and make their own import and export decisions. Beyond the mixed LLC, Decree-Law 114/2025 establishes three additional forms of association: a state enterprise acquiring shares in an already-existing private LLC; absorption, whereby a joint-stock company with 100% Cuban capital or a state LLC absorbs a private LLC outright; and economic association contracts, which create a common fund and profit-sharing arrangement without forming a new legal entity.

The decree fills a legal gap that opened in August 2021, when Decree-Law 46 legalized micro, small, and medium-sized enterprises but explicitly prohibited mixed companies between state and private capital. That earlier framework limited ownership to one enterprise per person and banned Cuban partners abroad, leaving MSMEs and cooperatives without a pathway to formally collaborate with state actors. Decree-Law 114/2025 directly addresses that void.

On the eligibility side, state-owned enterprises, state LLCs, joint-stock companies with 100% Cuban capital, and designated budgeted units can participate on the state side. MSMEs and both agricultural and non-agricultural cooperatives qualify on the non-state side. Natural persons engaged in commercial activities are explicitly excluded under the decree's terms, as reported by state broadcaster Radioguaimaro.

Implementation runs through the Ministry of Economy and Planning, which issued Resolution 8/2026 to govern the evaluation and approval of proposed associations. El País reported that every step taken by these new partnerships will be monitored by the ministry. Strategic sectors including health, education, and defense remain under state control and are not opened to the new partnership structures.

Economist Ricardo Torres, a former researcher at the Center for the Study of the Cuban Economy and now a professor at American University in Washington, cautioned that the measure still operates within a "framework of centralization and bureaucracy." That tension sits at the heart of the reform: the decree grants operational powers that Cuban businesses have not formally held in generations, yet routes every association through centralized ministerial approval before it can move forward.

Writing in Trabajadores, journalist Yamila Causse Despaigne framed the decree's ultimate significance as contingent on execution, noting that its "true scope will depend on how associations are implemented in practice and whether they translate into greater productivity, innovation, and social benefits." With the April effective date now days away, the first applications under Resolution 8/2026 will begin to reveal how much room the new framework actually creates.