There's a new possible hotspot for entrepreneurship that might surprise you: Cuba.

Now that relations between the U.S. and Cuba are warming up, many entrepreneurs see the island nation as an intriguing choice. When former President Obama announced that he'd like to open up relations with Cuba, thoughts of tourism and trade arose.

For entrepreneurs, Cuba could be a land of untapped potential.

Cuba has a struggling economy, but it also has a population of roughly 11 million -- and is a short flight from Florida.

Not long after Obama's announcement, companies started to dip their toe in the Cuban market. While trade policies have been slightly relaxed, it's still not a situation where a U.S. company could open up in Cuba.

Tourism rose roughly 20 percent after Obama's 2014 announcement and more than 94,000 U.S. tourists visited Cuba in the first quarter of 2016, but it's still a complex web for businesses.

In 2015, American companies such as PepsiCo, Caterpillar, Boeing and American Airlines were present at the Havana International Fair, an event usually sparsely attended by the U.S.

However, the hurdles toward building a successful business in Cuba are endless. In addition to the lack of infrastructure in Cuba (it's still largely a cash-based society, with little availability for plastic), the U.S.-Cuba embargo remains in place.

There are still avenues for a determined American entrepreneur, though.

Experts have said that entrepreneurs who visit the island are more interested in real estate opportunities, the hospitality industry and establishing small factories in a 180-square-mile "free zone" outside of Havana. Foreign entrepreneurs are able to own and operate businesses in that zone, but only after being granted approval from the Communist Party.

Right now, most of the entrepreneurship is happening natively, as Cubans start to gain more economical power thanks to the influx of tourism dollars. The country's policies are still very insular, leading Americans and other foreigners to work more with entrepreneurial Cubans than trying to curry favor with the Communist Party in order to own a business.

Still, the seeds are being planted. Largely popular airline Southwest recently opened up routes to Havana, and Carnival Cruise Lines docks in the capital city, as well. It may take years for Western companies to operate out of Cuba, but these are promising steps toward that future.

There are ways for entrepreneurs to gain a foothold within Cuba, but it takes some coordination and teamwork. Americans are able to go into business with Cuban entrepreneurs, or cuentapropistas as they are known. The Cuban government allows these cuentapropistas to operate taxis, shops and restaurants.

Right now, they are the best conduit for American entrepreneurship in Cuba. Working with a cuentapropista is a great first step for the determined entrepreneur wanting to learn more about business operations in the island nation.

As more tourism comes to Cuba, that revenue could fuel a change in thinking. Currently, the Cuban government and the Communist Party strictly prefers that Western business practices stay away from the island. But with an influx of tourism money, that could change, especially if Cuba uses this money to build out infrastructure.

While it might be easier now (though still an arduous process) to travel to Cuba as a tourist, it does not seem that the land is totally open for business yet.

Published on: Jun 5, 2017