Cuba has opened its real estate sector to foreign investment as part of a sweeping package of economic reforms aimed at tackling a severe crisis and attracting private capital.The reforms, announced by the communist government in June, began taking effect this week through a series of decrees, resolutions and regulations.

They come as Cuba struggles with shortages and an economic downturn following months of a US fuel blockade.Under the changes, foreign investors can now invest in Cuban real estate, marking a significant shift for an economy where the state has traditionally played a dominant role, reported AFP.The reforms also allow privately owned Cuban companies to work directly with foreign investors, hold accounts in overseas banks and import and export goods without going through government intermediaries.Previously, most foreign investors were required to form joint ventures with the Cuban state.The new measures further allow the creation of private companies employing more than 100 people and permit privately owned banks, pharmacies and gas stations.President Miguel Diaz-Canel has rejected suggestions that the reforms amount to a covert shift towards capitalism, saying they are intended to “preserve” socialism.

The changes come as Cuba’s private sector has expanded to fill gaps left by the struggling state economy. More than 15,000 small and medium-sized enterprises currently operate on the island and employ more than a third of the working population, according to official data.Private companies now account for a major share of food and fuel distribution, while the government is increasingly turning to private and foreign investment to revive the wider economy.