Private enterprises in Cuba, previously allowed to engage in wholesale trade, are now compelled to clear out their inventories following the abrupt termination of their licenses. This move by the regime is yet another step to tighten its grip on the economy and undermine private sector growth.
The government, through its official social media account, announced that self-employed individuals involved in the wholesale trade of both domestic and imported goods are required to liquidate goods that are in transit or in stock, adhering to a specified deadline. Meanwhile, an extension until September 30 has been provided for other economic actors still engaged in this activity.
While the government has maintained that retail trade is still permitted for all non-state actors with approved activities, it also announced the approval of six new joint ventures between state entities and private enterprises. Last December, the regime unilaterally canceled all wholesale trade permits for private enterprises and non-agricultural cooperatives that had this activity listed as a secondary one in their business objectives.
The measure, which came into effect on December 5, is part of an alleged effort to "regulate" both wholesale and retail trade within the private sector, as stated by the Minister of Domestic Trade, Betsy Díaz Velázquez. According to the new regulations, companies that do not choose to establish partnerships with state entities must liquidate their inventory within a maximum period of 120 days. They are permitted to sell their products on a retail basis, provided this is authorized in their business objectives and they possess the necessary commercial license.
This crackdown on wholesale licenses delivers a significant blow to private initiatives on the Island, further complicating the growth of a sector striving to establish itself amid state-imposed restrictions. The government asserts that state-run socialist enterprises remain the cornerstone of the economy, while non-state management forms play only a supporting role.
Notably absent from the discourse is any mention of the inefficiencies of state-run enterprises. Instead, the government emphasizes that alliances with non-state economic actors offer the advantage of utilizing state infrastructure, transportation, and commercial expertise. The Ministry of Domestic Trade clarifies that private businesses can continue engaging in retail trade—selling to the public or providing services to the population—so long as it is approved within their business objectives or projects and they hold the appropriate license.
The resolution explicitly states that self-employed workers are prohibited from engaging in wholesale trade. It automatically cancels their registration for the wholesale trade of national or imported goods. Although officially presented as an effort to "organize" Cuba's trade sector, this decision is widely seen as an attempt to centralize economic activity and weaken the private sector.
These restrictions are being enforced amid a severe economic crisis on the Island, marked by acute supply shortages and a state sector struggling to meet the basic needs of the population.
FAQ on Cuba's Private Sector and Wholesale Trade Restrictions
Why did Cuba revoke wholesale trade licenses for private enterprises?
The Cuban government claims the revocation is part of an effort to regulate and organize wholesale and retail trade. However, it is perceived as a move to centralize the economy and weaken the private sector.
What options do private enterprises have following the cancellation of their wholesale licenses?
Private enterprises are required to liquidate their inventory within 120 days. They can sell their products on a retail basis if their business objectives and licenses permit it.