Communist Cuba will allow foreign investment in all sectors except education, health and "armed institutions" and offer tax exemptions to overseas companies, the official daily Juventud Rebelde reported Wednesday, disclosing details of a bill proposed by Raul Castro's government.

The new legislation "aims to provide foreign investors with full protection and legal certainty," guaranteeing that their investments "will not be expropriated except for reasons of public or social interest previously declared by the Council of Ministers," the newspaper said.

Any expropriation would take place "in conformity with the constitution and relevant international treaties the country has signed, with due compensation worked out through mutual agreement," the daily added.

The draft bill provides tax exemptions on the personal income "of foreign investors who are partners in joint ventures or a party to international economic association contracts," the newspaper said.

The new legislation will modify an existing foreign investment law that dates back to 1995, bringing it in line with the government's broader project of "updating" its socialist economic model.

Although the Communist-ruled island began opening its economy to foreign investment in the mid-1980s, the crisis triggered by the loss of subsidies after the collapse of the Soviet bloc led it to pursue that option more vigorously.

Cuba is currently seeking to attract foreign capital through projects such as the recently established Special Development Zone at the Mariel port, touted as the island's most important development initiative. EFE