In February 1960, Fidel Castro announced that foreign investment in Cuba would be accepted only if delivered to the government to be used as it saw fit. The enterprises in which this capital would be invested were to be "national enterprises," so that Cuba would not be dependent on foreigners. Any new foreign investments were to be controlled by the Central Planning Board. From mid-1960s, US holdings in Cuba were systematically seized, partly for political reasons and partly because US corporations refused to accept Cuba's terms of nationalism. Some of the investments of other foreign nationals were left operating under stringent governmental regulation.
Between 1960 and the early 1970s, foreign investment activities were restricted to limited technical and economic assistance from East European countries and the then-USSR, with which Cuba concluded over 40 cooperation agreements between 1963 and 1983. Limited investments from the non-communist world were sought with some success in the mid-1970s. In 1982, in a further effort to attract investors from Western Europe, Canada, and Japan, Cuba passed its first foreign investment law, permitting foreign companies to form joint ventures with the Cuban government, but to own no more than 49% of the stock. In 1985, however, direct investment in Cuba by OECD countries totaled only $200,000.
Since 1990, the Cuban government has seen the necessity to open its recessed economy to foreign investment, either via joint ventures or other forms of association. In 1992, Cuba further intensified its efforts to attract foreign investment in several key areas of its economy, including sugar, tourism, textiles, tobacco, pharmaceuticals, nickel, and shipping. In 1995, full repatriation of profits and 100% foreign ownership was allowed in Cuba.
The annual inflow of foreign direct investment (FDI) into the more liberalized Cuba reached a peak of $15.2 in 1998, up from $1 million the year before. As of 1998, there were 322 joint ventures in force, with partners from over fifty different countries. In addition, many foreign contracts were being sought for oil drilling. FDI inflow dropped to $9 million in 2000 and turned into divestment of -$10.3 million in 2000. Inflow was $4.6 million in 2001. Principal sources of foreign investment include Canada, Spain, France, Italy, the Netherlands, and Latin America.
In April 2002, after President Chavez of Venezuela was returned to power following a coup supported by the Bush administration, oil shipments to Cuba on concessional terms were cut off. In April 2003, there appeared to be a decisive shift away from further opening of the economy as the Castro regime rounded up dissidents and executed by firing squad three men who attempted to hijack a passenger ferry to take them to Florida, accusing the US Mission Chief of trying to organize political opposition to the regime.