HAVANA, Cuba - CUBA has formally authorised the creation of non-agricultural cooperatives, a measure that is expected to permit the growth of midsize businesses.
Such entities have not previously existed in Cuba, where the government has controlled nearly the entire economy for decades.
More than 200 co-ops will be established in an initial trial period in sectors such as transportation, construction, fishing, and services.
The state will also lease out businesses such as restaurants and repair shops for employees to run cooperatively.
It's the latest step in President Raul Castro's plan to reform the economy through some liberalisation measures.
The law took effect Tuesday with its publication in the government's Official Gazette.
Top Cuban leaders announced the imminent arrival of the non-farm co-ops in the summer, but the change did not take effect until five new governing statutes were published Tuesday in the government's Official Gazette.
The rules say a cooperative can be formed by three or more Cubans.
"They will not be administratively subordinate to any state entity, although they should conform to the guidelines established by the governing bodies that oversee their activities," Granma said.
The paper added that they will be free to do business with private citizens, other cooperatives or state entities, and to set their own prices "except those that the State determines".
While agricultural collectives have existed since the 1990s, these will be the first worker-run non-farm co-ops allowed after the Cuban state's control over nearly the entire economy for decades.
Castro's five-year plan of gradual reform has seen other measures like the leasing of state land to independent growers, the legalised sale of real estate and used cars and eased restrictions on travel.
Officials say they are not abandoning socialism and the state will maintain control of key sectors.