Answers to ten essential questions about doing business in Cuba:
1. Is it legal for us to retain IcarusCuba? For Americans, the short answer is yes. U.S. regulations allow for U.S. citizens and companies to hire privately employed Cubans to provide market research and education, as well as hospitality related services. For business executives from anywhere else in the world, the distinction is unimportant.
2. Why should we pay for someone in Cuba to do research when we can go to Cuba and do it ourselves? For many people around the world, there is still a great deal of pent-up curiosity surrounding Cuba. If you want to come and see the country for yourself, please be our guest. But getting a sense of the country on a limited visit is one thing. Serious market research is another. Some of our savviest clients never travel to Cuba at all, because they understand the costly, time-consuming nature of even “simple” searches for information in Cuba. That’s why they hire us to handle that for them.
Sometimes, once we explain the Cuban business process, people still don’t take our word for it and insist on doing their own investigation. Eventually, if they don’t give up in frustration, they return and confess that it was much harder than they imagined, and ask for help. We’re always happy to assist, at any stage. We just think it makes sense to save money upfront, rather than later on in the process.
3. We know consultants outside Cuba who claim to have plenty of connections on the island and travel there frequently. Where’s your advantage? We believe that having access to a deep bench of veteran industry experts inside Cuba with up-to-date, hands-on experience and connections speaks for itself. Our advantage is up-to-the-minute information, straight from the source, without intermediaries traveling back and forth to inflate the price, and most importantly, without the ideological bias that could taint an analysis.
It’s also important to understand the reality of your consultants’ business history in Cuba. As a test, try asking them about their concrete experience with the feasibility studies required by the Cuban government for any major capital investment. Ask about their experience in joint venture negotiations in Cuba. Take care to distinguish between politically motivated deals and the deals being negotiated in Cuba’s real business environment. A consultant that has experience in the first is not necessarily qualified for the second. Try to avoid the trap of choosing a consultant based on Cuban ancestry or prior residence in the country. The curve of change in Cuba is incredibly steep and someone who emigrated just six months ago has already fallen behind.
Cuban business directors are incredibly well-trained and shrewd. We choose the same kinds of project consultants, based not only on their professional training but their actual sector-specific work experience and competence as analysts and negotiators in Cuba’s real business world.
4. Who are your clients? What kinds of deals have you negotiated? The studies we perform for our clients are always exclusive and confidential. We have provided some general examples of our market study work – without identifying specific clients, save one – at our Projects page.
5. Everyone knows that U.S. policy toward Cuba is subject to change, and that the financial dragnet of the U.S. embargo is a heavy consideration for any foreign investor. Why pursue a market study now? Why not wait for that problem to be settled first? Foreign investment in Cuba has been underway for quite some time, ever since Cuba opened up to foreign capital in the late 1990’s. As a normalization process between the United States and Cuba was announced near the end of 2014, that investment accelerated. Businesses that have not yet invested in Cuba are already behind the curve. There’s absolutely no sense in voluntarily moving even further back on the train, which is what a wait-and-see approach does.
We see the embargo as a complex web of policy mandates that were constructed over very many years, and unlikely to disappear overnight. But the company that is willing to negotiate that web, market study in hand, is the one that will be able to make a better offer. And a better offer is the only thing that will compensate for the loss of first-mover advantage.
6. We know our business better than you or anyone else. Can you simply set us up with the decision makers in Cuba so we can negotiate the deal ourselves? We believe the customer is always right. We’re prepared to accompany our clients any distance, short or far. But we also know that the road to reaching decision makers in Cuba is not as easy as some consultants claim. First of all, it’s not a matter of simply making key Cuban contacts and convincing them through splendid sales tactics or financial inducements, to close a deal. Decisions in Cuba are made collectively, and this means that decision makers are a network, never a single person, and they must follow a thorough vetting process that includes market analysis and feasibility studies. One advantage to hiring IcarusCuba is the possibility of producing those studies for decision makers early in the process, increasing advantage and decreasing any time to business launch.
7. Aren’t there examples of foreign businesses that did set up shop through the back door or under the table? Yes. There are also examples of people prosecuted by both Cuba and the United States for that very thing.
8. The Cuban government also has official agencies who perform feasibility analyses and market studies. Can we hire them? Yes, you can. However, most clients tend to prefer third-party analysis, in order to avoid any potential bias or questions about conflicts of interest.
9. How much do your services cost? The cost of our services is directly related to the time we will need to spend to investigate, the ground we will need to cover, the logistics we will need to organize, etc. Tell us what you want to do and we’ll be happy to draft a proposal. That part is free.
10. Is there a magic formula for doing business in Cuba? Yes, and it’s quite simple: investment. You may have the world’s most amazing product, but the reality remains that Cuba’s purchasing possibilities are very limited without an improved economy and production. The companies who assist Cuba in this effort find that doors open with ease. Cuba is also a place where real, enduring relationships matter. That means that over the past half century, the businesses and countries who invested in Cuba have earned a loyalty premium that must be considered as part of any competitive analysis. These were people who not only seized first-mover advantage, they built trust. But plenty of opportunity remains, in all kinds of sectors. We can help you identify those opportunities and most of all, provide the followup you need to make them yours.