By Anne-Marie Garcia
HAVANA -- Cuban lawmakers on Saturday approved a law aimed at making Cuba more attractive to foreign investors, a measure seen as vital for the island's struggling economy.
Meeting in an extraordinary session, parliament replaced a 1995 foreign investment law that has lured less overseas capital than the island's Communist leaders had hoped.
Cuba's GDP expanded 2.7% last year, below targets and weak for a developing nation. Government officials say the economy needs 5% to 7% annual growth to develop properly.
"Cuba needs from $2 billion to $2.5 billion a year in direct foreign investment to advance its socialist socioeconomic model," said Marino Murillo, a vice president and the czar of President Raul Castro's economic reforms.
"Not using those sources would retard national development," Murillo told lawmakers in comments broadcast on state television, where news of the approval was announced.
Murillo said Cuba will especially look for agricultural investment.
Foreign media were not given access to the closed-door meeting.
Some details of the legislation emerged in official media in recent days. Among other things, it would cut taxes on profits by about half, to 15%, and make companies exempt from paying taxes for the first eight years of operation.
An exception would affect companies that exploit natural resources, such as nickel or fossil fuels. They could pay taxes as high as 50%.
Meanwhile, many foreigners doing business with the island would be exempt from paying personal income tax.
Cuban-born economist and University of Pittsburgh professor emeritus Carmelo Mesa-Lago said elements such as lower taxes, a shorter time line for approvals and the ability to invest in property send encouraging signals, but it's too early to tell.