HAVANA - Cuba's parliament unanimously approved a new law on foreign investment Saturday aimed at boosting sputtering economic growth on the communist-ruled island.
President Raul Castro, who was scheduled to speak to the assembly, has called the bill "crucial" to the Cuban economy, which has so far failed to show gains from his gradual reforms of the Soviet-style system.
The new legislation will go into effect 90 days after it is published.
Although the text has not been made public, officials have said it would offer foreign investors tax breaks and guarantees against expropriation, a persistent fear after the widespread government takeovers in the 1960s.
"The new Foreign Investment Law is the last chance for the reforms to reach the growth goals planned," said Cuban economist Pavel Vidal of the Universidad Javeriana in Cali, Colombia.
Despite reforms pushed by Castro opening up the economy to private enterprise on a small scale, the island's economy grew barely 2.7 per cent in 2013, well short of a 3.6 per cent target and similar to the anemic growth of recent years.
The new law will replace rules on foreign investment that have been in effect since 1995, passed by Fidel Castro amid a severe economic crisis that followed the Soviet Union's collapse.
The new rules this time come amid worries about the uncertain political situation in Venezuela, a close ally that replaced Moscow as Havana's economic lifeline.
In order to attract capital to Cuba, which has been under a US embargo for half a century, the new law offers foreign investors an eight-year tax exemption on earnings.
After eight years, investors will pay a 15 per cent tax on earnings, half the current rate, but can continue to enjoy the full exemption if they reinvest their earnings in Cuba, according to the Juventud Rebelde newspaper.
Natural resource investments, however, can still be taxed at rates of up to 50 per cent.