Government to legally recognize private firms

Cuba will recognize small and medium-sized private firms as legal entities, a ruling party document published on Tuesday showed, a move that could remove obstacles for businesses and foster the emerging private sector.

The government has relaxed restrictions on self-employment in recent years in an attempt to slash the state payroll and battle economic stagnation, leading to the creation of many independent businesses from hairdressers to restaurants.

President Raul Castro said at the Communist Party Congress last month that such businesses were working "without the necessary legal recognition", under rules designed for small, family firms only.