If Cuba plays it right, thousands of tourists could eventually be swinging their clubs at an 18-hole golf course overlooking the turquoise waters and golden beaches just east of Havana.

They will moor their yachts at a swank marina and drive electric carts to luxury villas built around the course's scenic artificial lake.

The project, one of at least a dozen awaiting a thumbs-up from the island's authorities, appears closer than ever to becoming reality after Tourism Minister Manuel Marrero said last month that Cuba will go ahead with the construction of golf courses and marinas.

Letters of intent have already been signed between Cuba's state-owned tourism company Palmares and several investors from countries such as Spain, Canada,Britain and even communist ally Vietnam, said a source close to one of the deals.

Cuba currently only has two courses. But sitting just 90 miles off the coast of the United States -- the world's biggest golf market with 27 million fans -- its potential as a golf tourism destination is huge and so are the potential revenues.

"Cuba can be one of the strongest golf destinations in the Caribbean," said Peter Walton, chief executive of the London-based International Association of Golf Tour Operators.

Cuban leadership has overcome its long-time ideological prejudices against the most capitalist of sports, the fine print regulating future joint ventures and real estate ownership remains a mystery.

Golf courses are generally financed by surrounding real estate developments, so the first thing investors will be looking at is Cuba's willingness to sell or lease land to foreigners. To justify the investment, leases will have to extend for at least 50 years.

"They seem ready to accept the real estate developments. But at this point nobody knows the terms of the leases or the conditions Cuba may attach to the contracts," said a foreign businessman involved in one of the projects.

PERCEPTION OF RISK

Over the years, several projects have been pitched to the Cuban government,including proposals by British architectural firm Foster + Partners, French construction company Bouygues Batiment International and, more recently, the Vietnamese Housing and Urban Development Corporation.

Most of the developments are planned along Cuba's northern coast, including Havana and up-market resorts such as Varadero and Cayo Coco.

Besides villas and apartments, some of these projects worth hundreds of millions of dollars include full-scale, Western-style restaurants, supermarkets and shopping malls so far non-existent on the island.

But to see the rough hillsides of a suburb in Havana turned into smooth greens filled with foreign putters will probably take more than just reasonably long lease terms, says KPMG analyst Andrea Sartori.

"You need to have certain stability and guarantees to property ownership that I think the country currently doesn't have,"

said Sartori, the head of Golf Advisory Practice, a Budapest-based division of KPMG specialized in the industry.

"It is very much an issue of the perception and risk that an international investor will have in leasing a property in Cuba today."

Although Cuba's 1995 foreign investment law foresees the sale of real estate to foreigners, the experiment in the late 1990s was soon halted after limited sales of apartments.

Business sources say Cuba would seek to create joint ventures in which it would provide land in exchange for 51 percent equity, Foreign partners would then be responsible for a huge cash injection, a model similar to the one used two decades ago to develop the island's hotel industry.

"That tends to bring down the returns (on assets) to foreign investors below the 15 to 20 percent they will be looking for," said a businessman with experience in Cuba.

To break into the regional golf circuit Cuba would need to develop a cluster of at least 10 courses, foreign experts say.

YANKEE INVASION

Even if nobody says it, the investors behind these projects are betting on a future opening of American tourism currently prohibited by a Cold War-era U.S. ban.

President Barack Obama has lifted restrictions on the visits of Cuban exiles to the island but a Congressional bid to end the travel ban affecting other Americans seems stalled amid renewed political tensions.

"These golf projects will take time to develop and the relationship with the U.S can improve a lot in the next two or three years," said Tony Zamora, a Miami-based Cuban American lawyer familiar with some of the deals.

But the challenges facing Cuba's future golf tourism industry may also derive from the island's own domestic problems.

Before building thousands of luxury villas for foreigners, a businessman says, Cuba will have to address its overwhelming housing deficit.

"The key ingredients of a successful golf destination are there -- The climate, the proximity to a major market, the flavor," said KPMG's Sartori. "However there are key issues that need to be resolved."