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Cuba Dispatch
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Cuba lets foreign firms hire directly

3 min read
13:24UTC

Havana published a revised Decree 325 in the Gaceta Oficial on 4 September, permitting foreign-invested firms to hire Cubans without the state agency that has taken the hard currency since the 1990s.

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PoliticsDeveloping
Key takeaway

Cuba's new decree permits direct hiring by foreign firms, though no employer has used it yet.

Cuba's cabinet published a revised Decree 325, the implementing regulation for the 2014 Foreign Investment Law No. 118, as document GOC-2026-495-ES11 in the Gaceta Oficial, Cuba's official state gazette, on 4 September 1. It follows Decree-Law 128/2026, approved on 3 September, and the two instruments do different work. The decree-law introduces direct hiring and wider financial autonomy for foreign-capital enterprises, while the decree rewrites the procedure through which foreign investment is submitted, approved, monitored and wound up.

The state employment agency sits on the payment chain. A foreign employer pays the state in hard currency, the state pays the worker a fraction of it in pesos, and the state keeps the spread. Cuba built that arrangement in the 1990s to earn foreign currency from joint ventures, and if Decree 325 is applied as written, a foreign-invested firm may now contract Cuban staff without it. Washington's sanctions authority, OFAC, designated the Comercializadora de Servicios Médicos Cubanos (CSMC), the company that markets Cuban doctors' labour abroad, in July on exactly that reading of the same structure . Washington and Havana are pulling at one mechanism from opposite ends, one by designation and one by decree.

Nothing in the gazette says direct hiring is happening, and no foreign-invested firm has been reported using the new rule. The 176-measure package the National Assembly passed on 18 June authorised private banks and exchange houses, and no licence for either had been issued by 1 July . Decreto 160 took force on 4 August and required implementing provisions within seven days, which did not arrive. Until a ministry publishes a model contract that omits the agency, Decree 325 grants a permission rather than changing anyone's payroll.

The decree still tells a reader where Havana now stands. Writing down a willingness to give up a wage capture the state built to survive the loss of Soviet subsidy says something about what it has left to trade. The Ministry of Foreign Trade and Foreign Investment (MINCEX) oversees implementation 2.

Deep Analysis

In plain English

Until now, any foreign company operating in Cuba had to hire Cuban staff through a state employment agency. The company paid the agency in hard currency; the agency paid the worker in pesos, keeping most of the difference. The new rules make that agency optional rather than compulsory. A foreign-invested firm can now hire and pay a Cuban worker directly, in theory letting more of the wage reach the person doing the job. The change does not abolish the agency. It removes the requirement to use it, which is a smaller step than it may sound.

Deep Analysis
Root Causes

The state employment agency has functioned as a wage-skimming mechanism: foreign firms pay salaries in hard currency to the agency, which pays the worker in pesos at a fraction of the value and keeps the difference as state revenue. That revenue stream is why the agency was never abolished outright.

Decree-Law 128/2026 and the revised Decree 325 respond to a specific investor complaint, echoed in the parallel Comercializadora de Servicios Médicos Cubanos wage-capture dispute, that the skim has grown large enough to drive away the skilled staff foreign enterprises most want to keep.

What could happen next?
  • Consequence

    Foreign-invested enterprises that switch to direct hiring will need their own payroll and tax-withholding processes in pesos, an administrative cost the state agency previously absorbed.

Sources:Prisoners Defenders
Mentions:Cuba →MINREX →Communist Party →Washington →Havana →Granma →Gaceta Oficial →Vietnam →OFAC →CSMC (Comercializadora de Servicios Médicos Cubanos) →National Assembly of People's Power →
First Reported In

Update #14 · Havana makes the hiring middleman optional

Prisoners Defenders· 8 Sept 2026
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Causes and effects
Caused by
US sanctions hit Cuba's medical missions
OFAC's July designation of CSMC for the same wage-capture arrangement is the mirror Havana's direct-hiring decree answers from the opposite end.
Occurred 23 Jul 2026
Read story →
Decreto 160 flips Cuba's default to yes
Decreto 160's unimplemented seven-day deadline set the precedent for Decree 325's unpublished machinery.
Occurred 4 Aug 2026
Read story →
Cuba's private-bank law, no licence yet
The unlicensed 176-measure reform established the pattern of announcement without implementing machinery that Decree 325 repeats.
Occurred 1 Jul 2026
Read story →
Cuba opens its market in 176 steps
Decree 325 extends the market-opening path the National Assembly's 18 June package began.
Occurred 18 Jun 2026
Read story →
This Event
Cuba lets foreign firms hire directly
Havana has put on paper a willingness to surrender a hard-currency capture it defended for three decades.
Different Perspectives
China
China
Foreign ministry spokesperson Guo Jiakun called China-Cuba cooperation open, transparent and legitimate on 11 August, after the 6 August designations reached Cuban military attachés posted to China and Russia. The statement named no new assistance.
Russia
Russia
The Russian embassy in Havana said on 31 August that expanding BRICS full membership is not on the agenda, declining the upgrade Cuba had sought before the New Delhi summit. Moscow remains Cuba's most reliable outside supplier but stopped short of the diplomatic step Havana wanted.
Dominican Republic
Dominican Republic
The Dominican Republic ordered nine Cuban diplomats and their families to leave on 13 August without stating a reason, a rupture Havana has not been given an explanation for. Neither government has since clarified what prompted the expulsion.
Observatorio Cubano de Derechos Humanos
Observatorio Cubano de Derechos Humanos
OCDH's Madrid-based survey found 94 per cent of Cubans in extreme poverty and 84 per cent distrusting Havana's own reform measures, fieldwork closed three weeks before Decree 325. The group monitors from exile because independent rights monitoring cannot operate legally on the island, and Lowdown could not reach a comparable on-island voice.
Cuban government (Foreign Minister Bruno Rodríguez Parrilla)
Cuban government (Foreign Minister Bruno Rodríguez Parrilla)
Rodríguez answered the 3 September designations on Cubadebate the same day without naming any of the five sanctioned entities, calling the wave collective punishment. Havana has used the same anti-blockade framing for each prior wave rather than contesting individual designations.
US Treasury (OFAC) and State Department
US Treasury (OFAC) and State Department
OFAC designated Banco Exterior de Cuba and four traders on 3 September; its SDN entry links the individual named alongside them only to Alejandro Castro Espín. The State Department's own announcement, not OFAC's listing, called that individual "a grandson of Raul Castro" and the designated entities exploiters of Cuba's resources "for the benefit of the regime."