HAVANA: Cuba and Iran, nations that have been mostly off limits to U.S. visitors for decades, are on the brink of opening up. And companies are clamoring to explore new commercial frontiers.
Cuba and Iran are uncharted terrain. Many governmental hurdles remain in place, and there is a gaping need for both nations to develop regulations and infrastructure to accommodate new trade.
“What we have now are companies chasing dreams as opposed to chasing reality,” John Kavulich, president of the U.S.-Cuba Trade and Economic Council, says of Cuba. “It’s important to be excited about a new market opportunity . … But it’s equally and necessarily responsible to make certain that the opportunity that is being sought is reasonable for the existing environment.”
Corporate interest in Cuba and Iran is high. Both countries are “about to be infused with a lot of money, which means a lot of investment and a lot of infrastructure and opportunity,” says Ed Daly of iJET International, which provides risk management for businesses operating internationally. “Those who get in early … are likely to fare better and have better relations with locals, which is key to establishing a long-term presence.”
In December, President Obama announced that the United States and Cuba would work toward fully normalizing relations, ending a 54-year stalemate and sparking a series of measures to ease interactions between the nations. The U.S. Embassy in Havana was reopened this month.
For U.S. companies, potential business opportunities include the telecommunication and Internet industries, sales of consumer electronics such as TVs and mobile phones and the provision of construction and agricultural materials authorized by the Commerce Department.
Options for getting to the island are increasing. JetBlue, which offers chartered flights to Cuba from Fort Lauderdale, Tampa and most recently New York, says its planes have been near capacity in recent weeks. American announced Aug. 18 that it will launch the first charter flights between Los Angeles and Havana starting Dec. 12. It will ultimately have 22 weekly trips from the USA to various Cuban destinations.
Miami-based businessman Ralph Gazitua has flown to Cuba twice this year. His logistics company, WTDC, a designated “foreign trade zone” that handles the shipping of goods to international destinations, consults and handles shipping for companies looking to send state-approved commodities to Cuba.
“I jumped on it,” he says of the new opportunity. “We want to be able to break ground . … That’s why we decided to go there.”
Kavulich says conducting business in Cuba can be difficult. He says the country has not changed its own regulations to allow local entrepreneurs to purchase American products.
Cuba remains mired in bureaucracy Gazitua has witnessed firsthand.
“The challenge is Cuba doesn’t have the infrastructure, the technology,” Gazitua says.
Cuba requires company representatives to have a business visa, which can be obtained at the recently reopened Cuban Embassy in Washington, Kavulich says. Business travelers should be aware that although it’s legal to use U.S. credit and debit cards in Cuba, that payment method is not available.
Iran also piques the interest of American businesses. A pending agreement would reduce economic sanctions against the nation in return for it getting rid of the means to build nuclear weapons.
Business prospects include oil, energy and engineering to help upgrade the country’s roads and buildings.
“There’s a lot of interest from clients who want to know what they can do, when they can do it, (and) what’s going to happen with this nuclear deal,” Daly says.
Businesses are in a holding pattern, waiting to see whether the deal goes through.
Even if the deal is approved, it remains to be seen when sanctions would be lifted. Then Iran will have more work to do preparing for U.S. business travelers and other visitors.
“From the planes flying in, to the hotels, to the taxis … to established guides, all of that is something that has languished in Iran since the revolution,” Daly says.
