Hola amigos! If you are a business owner based in Cuba but operating in the USA, you may be familiar with the unique challenges that come with navigating compliance, legal, and beneficial ownership reporting requirements. From the bustling streets of Havana to the vibrant markets of Santiago de Cuba, you understand the importance of staying informed and up-to-date on the regulations that impact your business operations. In this blog, we will explore the key considerations and best practices for ensuring that your business remains compliant and successful in both countries. ¡Vamos a empezar!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Cuba must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Cuban Company in the US

Even if none of the specific criteria apply, a Cuban company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Cuba. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Cuban companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Cuban businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Cuba need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Cuban Businesses:

Tax Treaties

As a Cuban business operating in the United States, it’s crucial to understand that there is no tax treaty between Cuba and the USA. This absence of a tax treaty means that your company may face double taxation on income earned in the United States. You’ll likely be required to pay taxes on your U.S.-sourced income to both the U.S. government and the Cuban government, without the benefit of tax credits or exemptions typically provided by tax treaties. This situation can significantly impact your company’s profitability and should be carefully considered when planning your U.S. business operations.

Trade Considerations

As a Cuban business looking to engage in trade with the United States, it’s crucial to be aware of the ongoing trade embargo imposed by the U.S. government. While some restrictions have been eased in recent years, significant limitations still exist on most commercial activities between the two countries. Cuban businesses should carefully research the specific regulations and licensing requirements that apply to their industry, as exceptions may exist for certain sectors such as telecommunications, agriculture, and medical supplies. It’s advisable to consult with legal experts specializing in U.S.-Cuba trade relations and stay updated on any policy changes that may affect business opportunities. Additionally, Cuban companies should be prepared to navigate complex financial regulations, as U.S. banks are generally prohibited from processing transactions involving Cuban entities. Thorough due diligence and compliance with all applicable laws and regulations are essential for any Cuban business considering trade with the United States.

Your Path to Compliance: Key Takeaways for Cuban Businesses in the U.S.

Operating a Cuban business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.