Check out restrictions and the tax situation. And, most important, choose a business in which you have prior experience. It’s much more difficult to familiarize yourself with a new type of business in a foreign country.
Remember, a trustworthy partner or manager can mean the difference between success and failure. Make sure you choose a partner with local experience. Do not trust anyone until you know him or her and have seen them perform in the workplace.
However, the person moved back to the United States and put a couple of employees in charge, and everything eventually fell apart: sales began to lag, money went uncollected, checks began to bounce, expenses were unaccounted for and incompetent salesmen were hired. Their potentially successful business just could not be run from abroad.
You have to stay on top of your business affairs. At times it is hard to find reliable labor, and the bureaucracy can be stifling. If you have a business with employees, be aware of your duties and responsibilities as an employer. To avoid problems, know what benefits you need to pay in addition to salary to avoid problems. Remember that the more employees you have, the more headaches.
In case things get rough, be sure you have enough money in reserve, in case of an emergency. You should have an ample reserve of capital to fall back on during the initial stage of your business.
Newcomers should not count on obtaining financing in Cuba for a new business. Neophytes should learn not only the language but also the rules of the game.
One option is to buy an existing business from someone else if there is a business worth buying, which is probably not the case in Cuba. In principal, this can save you lots of time and trouble, which means you can bypass most of the cumbersome start-up procedures and usually save a lot of time and energy.
While this is a definite advantage over starting a business from scratch, there is a downside. You can be taken advantage of by an unscrupulous seller trying to dump his problems on you. These problems may include unpaid back wages to employees, loss of a license or lease, or other legal problems that may not be apparent at first.
The best thing to do is to have a good lawyer check into the legal status of the proposed purchase and investigate potential problem areas. He can then tell you whether he thinks the business is feasible and if there is any unwanted baggage.
Any one of these items could cause untold headaches if not detected before you buy the business. Taking care of these matters is the best investment you could possibly make.
Talk to people, especially the “old-timers,” who have been successful in business, and learn from them. Profit from their mistakes, experiences and wisdom. Do not rush into anything that seems too good to be true. Trust your intuition and gut feeling at times. However, the best strategy and rule of thumb is, “Test before you invest.”
Newcomers find themselves seduced by the country’s beauty and friendly people and are often lured into business and investment opportunities that seem too good to be true, and often are.
People have impossible dreams about what business will be like in Latin America. It is a gigantic mistake to assume that success comes easily in here. Initially, starting any business usually takes more time and more money. Also, many unforeseen problems are surely, to arise.
If you decide to purchase an existing business, make sure it is not over-priced. Try to find out the owner’s real motives for selling it. Make sure you are not buying a “pink elephant.” Ask to see the books and talk to clients if you can. To ferret out a good deal, look for someone who is desperate to sell his business. Finally, make sure there are no lawsuits, debts, unpaid creditors or liens against the business.
Business tip: dealing with people is always the best way to develop a business relationship. When dealing with all government officials it is a good idea to treat them to a snack, a drink and chat. You will be amazed at the difference.
After reading the above information, if you still have questions or are confused, we advise you to consult a knowledgeable Cuban attorney for further information.
Beware of the So-called Experts and Overnight Gurus
Someday Cuba's popularity and potential business opportunities will bring whole slew of enterprising foreigners. Unfortunately, some of these people will lack qualifications in their fields of endeavor. Expat “carpetbaggers” seem to come out of the woodwork when a new place to live or retire is discovered.
The word “expert” will be used very loosely on numerous expatriate web sites, English publications and on business cards. We have observed this in expatriate havens like Costa Rica, Panama and Nicaragua
Do not get me wrong; there will be some highly qualified English speakers. Nevertheless, one should be extremely cautious when dealing with foreigners who consider themselves experts in Latin America. Just because a person was a professional in his home country or has gone through the process of moving here does NOT qualify him to be an expert. A few foreigners consider themselves experts just because they have lived in Latin America for a short time. Remember, anyone can build a web site and say anything about themselves.
We know people who have moved to Latin America, and go into business and miraculously become experts overnight.
Many naive newcomers have been taken advantage of by other foreigners who call themselves “experts,” but are really incompetent imposters. So, be careful!
We suggest that if you happen to come into contact with any foreigner who calls himself an “expert,” no matter how convincing he may be, do all of the following:
- Ask for references from other foreign residents who have used the expert’s services. Don’t rely on the testimonials that appear on a person’s web site. They may be slanted. If your expert will not give you any references, you will know immediately you are being duped or sold shoddy second-rate services. Also, try to contact the person’s last employer before they moved to Cuba. Again, if they will not give you the contact information, you can bet the person is hiding something. If a person who is not of retirement age claims to have been highly successful in his or her former country, they may be trying to cover up something about their background.
- Enter the person’s name in a search engine such as Google to see what comes up. There are even companies you can pay to do a background check if you suspect something.
- Ask how long the person has lived in Cuba or other Latin American countries. If they have lived in the region for less than 10 years, be careful. It takes years to understand any region or country. It takes more than a year or two to know the ropes. Many of these neophyte relocation gurus and entrepreneurs mean well but just don’t have enough experience under their belt.
- Find out what the person’s educational background was when they lived in their home country and if they have any formal training in the Latin American culture, studies or foreign investments. If someone was a plumber, janitor, welder or doctor, for example, prior to moving to Cuba, this does not qualify them to give professional advice.
- Beware of colorful, well-designed web sites built by the so-called experts to express their admiration for the country to attract naive foreigners.
- Be cautious of publications or websites that appear to be helpful on the surface but incessant hype the services of the person(s) or organization behind them.
- Most important find out if the person is truly fluent in Spanish. There is no way a person can have expertise unless he or she can communicate with the locals and understand the nuances of the local humor, culture and language.
Beware: there are many foreigners who say they speak fluent Spanish with a vocabulary of only a couple of hundred words. The author has run into many of them in his nearly 50 years of living in Latin America.
