Invest in Venezuela

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Legal Environment / National Legal Framework

National Legal Framework

Legal Environment

The Constitution of The Bolivarian Republic of Venezuela provides as a principle of national economy development and the joint participation of the State y private initiative (Art. 299) and equal treatment of national and foreign investments in the country (Art. 301).

  1. National

The first investment regulation in Venezuela named Promotion and Protection of Investments Law was the first decree given by the president Hugo Chávez in the year 1999, under Investment Legislation Model of The United Nations for Development (CNUDMI in Spanish), under standards and international principle of treatment and promotion to productive investment.

In November or 2014, the regulatory framework about foreign investment was reformed in the country through. 1434 decree over the Foreign Investment Act  (LIE in Spanish),  published on Extraordinary Official Gazette  # 6.152 from November 18th, 2014, leaving with no force the following regulations: #1103 decree over 1990 Common Regimen on Foreign Capital Treatment and Brands, Patents, Licenses and Royalties; #2095 1992 decree which contains the Common Regime on Foreign Capital Treatment on Brands, Patents, Licenses and Royalties Regulation;  The Register Regime on Investments made with the proceeds from the selling of Dominated Titles in currencies issued by the Republic in 1995; The 1999 Promotion and Protection of Investments Act  1999 and its 2002 regulation.

Article 1 of LIE defines as investment:

“All those resources lawfully proceeds y bounds by a national or foreigner investor to the production of goods and services that include raw material or intermediate products with an emphasis on those origin or national manufacturing, in proportions and conditions established in this current decree with rank, value and law strength, that contributes in job creation, promotion of small and medium industry, endogenous production links, as well as productive development innovation.”

Competent Bodies

  • Popular Ministry with Competence in Commerce (Minco in Spanish), principal
  • National Center of Foreign Trade (Cencoex in Spanish), implementer
  • Popular Power Ministry with Financial Competence, sanctioning.
  • Concurrent in special subjects:
    • Petroleum (including petrochemical) and Mining: People´s Power with competence in Petroleum and Mining  (Mpetromin in Spanish)
    • Banking: Banking Institutions Sector Superintendence (Sudeban in Spanish)
    • Insurance: Insurance activity Superintendence (Sudeaseg in Spanish)
    • Stock Market: National Stock Market Superintendence (SNV in Spanish)

Reserved Sectors

The reserved sectors are strategical conforming national interest in accordance with the Constitution and Laws.

 IE modalities

  1. Currency financial investment and/or any other exchange media or compensation instituted on the integration framework.
  2. Tangible or physical capital goods such as industrial plants, new or refurbished machineries, new or refurbished industrial equipment, raw materials and intermediate products that make the productive process of the receiver subject of the investment.
  3. Immaterial or intangible assets constituted by industrial and intellectual property rights, including technical assistance and technical knowlegments related to process, duly supported through physical supply of technical documents, user´s manuals and instructions.
  4. Capitalization of debts
  5. Reinvestment

 

Minimum Investment

The mínimum investment is USD $1.000.000 or its equivalent in foreign currency. The value of the investment will be determined at the current official exchange rate at the time of the corresponding exchange operation and will be only tabulated with the presentation of the corresponding receipts.

Dwell Time

A minimum of 5 years of stay is required for the investment, starting from the grant of the Investment Register Licensure to carry out capital remission.

In the case of referral currency by the concept of utility/dividends, will be carried out from the first closing of the fiscal year of the Company, prior compliance of the stablished requirements at LIE

Investment Conditions

Every IE Project in Venezuela in accordance with LIE must accomplish with the following general conditions.: Contribute with the development of the country, covering the domestic demand and the exports increment; local incorporation and technological contribution; development of local providers; social responsibility under international standards; channeling resources through National Financial System; Ensure compliance of external or internal credit contracts; Meet the objectives of economic policies; Provide any information CENCOEX, among others.

Record and Qualification

The requirement of approval and record of Foreign Investment by the corresponding bodies. Usually, CENCOEX prior binding opinion of the Ministry with Trade Competence. Only applies to foreigner investors.

Conflict Solutions

LIE refers conflict solutions in IE local jurisdiction matter, with the possibility of using alternative conflict resolution mechanisms in Latin-America and The Caribbean integration framework.