It is the latest stage of reforms begun when President Raul Castro took over from his brother, Fidel in 2008.
Raul Castro has been trying to stimulate Cuba’s stagnant economy but has faced resistance from Cuban Communist Party hardliners.
With the restoration of relations with the US last year, Cuba is also opening up to foreign investment.
The government currently allows self-employment in several hundred job categories from restaurant owners to hairdressers.
The Cuban economy has been stimulated by many of these becoming small businesses and employing other workers.
The latest reforms were published in a 32-page document detailing the party’s plan for economic development, and approved by Congress.
It did not specify what the new status for “private businesses of medium, small and micro size” would entail.
Neither did it mention if businesses would be given additional rights such as the ability to import supplies or export products.
But analysts say the new status is a sign of the government’s recognition that private enterprises will have a significant role in the future, although the main means of production could remain in the hands of the state.