“If you’re in business, you need a Cuba plan in the next six to 12 months – it will move that fast.”

We are living interesting times. It has been said that an island only 90 miles away from Florida once seemed like it was million miles away. But now it’s getting closer. As we know, Cuba and the United States have had a problematic relationship since 1961. For long, U.S. has maintained a commercial, economic, and financial embargo, which has made it illegal for U.S. companies to do business with Cuba. However, December 2014 brought promising changes to this situation that have heavy implications on businesses in Florida, too. On December 17th, 2014 U.S. President Barack Obama and Cuban President Raul Castro announced a framework of an agreement to normalize relations between the two countries. This agreement is expected to eventually end the longstanding embargo, lift some U.S. travel restrictions, fewer restrictions on remittances, allow U.S. banks to access to the Cuban financial system, and establish a U.S. embassy in Havana. As of January 2015, the restrictions on travel by Americans to Cuba have already been significantly relaxed as well as the limited import of items such as Cuban cigars and rum to the U.S. allowed. Also, it is now possible to export American computer and telecommunications technology to Cuba.

However, there is still a long way to go for the relations of the two countries to completely normalize. Cuba’s interest in the U.S. is obvious: The small communist country is in desperate need of foreign capital as it aims to modernize its economy and infrastructure. Now the question is, how will the changes in Cuba policy affect Florida’s economy?

Florida is obviously well-positioned to take advantage of the historic changes. WLRN Public Radio and Television interviewed an economic analyst Hank Fishkind on the economic implications for Florida with U.S.-Cuba policy changes last December. According to him, the economic impact on Florida won’t be very significant at first. In the short-term, there will most likely be some expansion of Cuba’s agricultural economy. For example, Cuba could provide competition with Florida’s sugar production. Fishkind argues that it will take a substantial change in the regulations to get a major change in investment. However, this change might just be coming. Some economist have, in fact, predicted that especially South Florida, home of the nation’s largest community of Cuban refugees would undoubtedly benefit from the easing trade with Cuba.

In the long-term, however, easing of the relations between Cuba and the U.S. could, for example, boost opportunities to improve Cuba’s long-neglected infrastructure. Cuba is in need of many capital-intensive goods the country can’t produce itself and, thus, companies in Florida could take an advantage of this need. Furthermore, Cuba’s old automobile stock would need a major upgrade, in which U.S. can also help. Health and education are other fields that could pose potential opportunities to companies in Florida.

Relaxed travel restrictions to Cuba are likely to trigger a boom in hotel and resort development in Cuba. A recent study published by Herald Tribune in June found that about half of the surveyed Americans wanted to visit Cuba. This is an opportunity for Florida but also a threat: In a few years, Cuba can become a major competitor for Florida for meetings, conventions, and big resort casino business. On the other hand, South Florida could serve as a hub for travel to and from Cuba: “It’s going to be tremendous for Florida. It will be seen as an add-on to a Florida vacation – come to Florida, go to Cuba and then come back here”, said Virginia Haley, president of Visit Sarasota County. However, structural and political changes will have to happen in both Cuba and the U.S. before large-scale investment and trade can happen. These changes include changes in Cuban laws governing property ownership, banking and imports.

“It’s going to be tremendous for Florida. It will be seen as an add-on to a Florida vacation – come to Florida, go to Cuba and then come back here.”

Meanwhile, Florida is already getting engaged with Cuban businesses. In May, 2015, a group of Cuban entrepreneurs visited the Greater Miami Chamber of Commerce. All the Cubans taking part in this exchange had their business cards ready and they were excited to learn about new practices and techniques that could be incorporated to their businesses. The aim for the Greater Miami Chamber of Commerce is to create and enforce more permanent contacts with Miami entrepreneurs to create mutually beneficial relationships. Moreover, a team of lawyers from the Florida Bar made a first trip to Cuba around the same time exploring emerging business opportunities in Cuba. A vice president of IMG, a global sports, management and media company, argued that “If you’re in business, you need a Cuba plan in the next six to 12 months – it will move that fast”.

Likewise, ferry companies are already starting to provide services between Florida and Cuba. It’s now up to the companies to negotiate port access with the Cubans. U.S. manufacturing companies are also starting to test waters in Cuba by making filed trips to the island. They have already found that there is a great demand for American products. However, Cuba seems a bit overwhelmed by all the delegations that want to visit and lacks capacity to deal with all the changes necessary to take advantage of the business opportunities opened up by a new relationship with the U.S. On the other hand, experts suggest that U.S. companies in industries still blocked from entering Cuba may want to engage in philanthropic work in Cuba to build brand recognition for the future.

So does this situation have any implications for Finnish companies wanting to do business in Cuba? After all, Florida would be an easy base location from where the business could be conducted. The main sectors for investment in Cuba are agricultural forestry and food, sugar industry, industrial sector, tourism, energy, mining, transportation, pharmaceutical and biotechnological industry, health, and construction sectors. Finnish companies already operate in Florida in many of these sectors and, thus, moving to Cuban markets from Florida could potentially lower the risks since Florida has already been watching the situation in Cuba closely and establishing networks and relationships in Cuba. Finnish companies could take advantage of this ground work or partner up with companies from Florida who have already been testing the waters in Cuba.

Cuba has also made changes that encourage investments in the country such as the investment law adopted in 2014. It means that the country has favorable tax conditions for foreign firms. Further, Cuba has an excellent location being positioned in the middle of emerging markets as well as North and South American markets. Accessing Cuba from Florida would give Finnish companies a good access to these emerging and South-American markets, too. It’s now time to decide how much of an opportunity Cuba is and then go ahead and put together a Cuba plan for your business.

Sources: Sun Sentinel, WLRN, Herald-Tribune, FinnCham, Miami Herald, Herald-Tribune, Daily Business Review, Reuters