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Startup Report

Stripe Is Going To Help Cuban Startups Do Business In The U.S.

It's finally legal for Cuban entrepreneurs to incorporate and bank in the U.S. With its Atlas service, Stripe is seizing the opportunity.

[Photo: Flickr user Thomassin Mickaël]

Being an entrepreneur is never a cakewalk. Doing business in other countries is even tougher. And until the U.S. and Cuba restored relations in July 2015, the idea of a Cuban entrepreneur establishing a toehold in the U.S. would have been unthinkable.

In fact, it was only on Tuesday of this week that the Obama administration—ahead of the president's visit to Havana next week—announced a loosening of decades-old restrictions that permits U.S. banks to open accounts on behalf of Cuban nationals, with money flowing back to Cuba. And now payment-processing company Stripe is extending its new Atlas service, which helps foreign startups incorporate a Delaware company, set up a banking presence, and get tax and legal guidance in the U.S., to the suddenly available Cuban market.

The fact that Stripe is announcing its news right now, so soon after it became a legal possibility, is no coincidence. "A few weeks ago, the White House reached out to us," says John Collison, who cofounded Stripe in 2010 with his brother Patrick. As the White House had been making plans for the new banking policies and next week's trip, "people on the ground in Cuba suggested the president check out this Atlas thing," Collison told me.

After hearing from the Obama administration, Stripe moved quickly to prep a version of the service it could offer in Cuba. As in other countries, where it works with accelerators and incubators to reach entrepreneurs who might want to use Atlas, the company is teaming with a local partner: Havana-based Merchise Startup Circle.

The thawing of U.S.-Cuba relations, loosening of financial restrictions, and existence of Atlas don't mean that it will be easy to run a global startup from Cuba. Less than 4% of Cubans are online; until earlier this year, Collison told me, home Internet access was illegal in the country. Even the price of Atlas—$500 during its beta-test period, most of which goes to filing fees rather than into Stripe's pockets—is an obstacle in a place where state salaries of $22 a month are typical. But the Cuban government says it now has plans to bring broadband to 50% of citizens by 2020. And if the U.S.'s rapprochement with its long-ostracized neighbor helps to modernize the Cuban economy and increase civil liberties, Stripe will be ready to serve the new businesses that might begin to pop up.

Cuba, says Collison, "is a market with 12 million highly trained, educated people. That's three times the population of Ireland, which punches above its weight in the technology industry." (It's a logical point of reference: The Collisons were born in Ireland and began their careers as startup founders there before relocating to the San Francisco Bay Area and hatching Stripe.)

When I spoke to him, Collison still seemed almost as startled by Atlas's Cuban expansion as I was when I learned of it. "This was not something that was on our radar a few weeks ago when we launched Atlas," he told me. "But I can't think of a more perfect distillation of Stripe's mission."