Venezuela: Investing

FDI in Figures

Despite the attractiveness of the country due to its godsend oil, the large size of its domestic market and the richness of its natural resources, the inflows of FDI in Venezuela have been smaller in the last few years. During the period of political and economic crisis from 2000 to 2004, the country experienced a significant capital flight. Likewise, the economic and political crisis set off by the international financial crisis has provoked a significant back-flow of FDI.  The uncertain climate born from the "Bolivarian" reforms (infringement of private property rights, foreign currency control, increasing regulations, nationalizations, etc.), Chavez's anti-American speech, the ineffectiveness of the port system are some of the many hindrances to investment.  Venezuela is combining regional and revolutionary politics, without closing its doors to foreign investment, which it needs badly.  In 2009 the net FDI flows represented almost 0.4% of the GDP.

Why You Should Choose to Invest in Venezuela

Strong Points

Ports and airports are being privatized and important markets should develop in these sectors. The oil sector is very dynamic, prospecting and exploitation remain attractive, even if the government has made the conditions of exploitation more difficult. Numerous markets remain unexploited in the country, mainly those concerning the production of finished products which are mostly imported. The technological sector has developed very little. In the recent years, a policy of aid to production has given a new impetus to the agro-food industry: coffee, tropical fruits, rice, tobacco, cacao, alcoholic drinks, as well as to the car industry and audiovisual production.

Weak Points

The control of the state developed and promoted by the current government could steer into an unattractive commercial environment to foreign investors. Inflation, corruption, unemployment, the importance of the informal sector, poverty and violence are all restraints to the establishment and prosperity of a business.   

Government Measures to Motivate or Restrict FDI

Venezuela has adopted the Decree 2095 on foreign investment, which is encouraged and protected by a new legal framework. In addition to this, there is a policy supporting production activities that are particularly dynamic or potentially good for exports. The government also gives fiscal bonuses, ranging from tax exemptions to special credit treaties, in order to encourage investment in the so-called "strategic" sectors, or in order to stimulate the establishment of businesses in the country's five least developed states.

Procedures Relative to Foreign Investment

Freedom of Establishment

Freedom of establishment is guaranteed, but new barriers have been set up, notably in the oil sector (a percentage taken off the highest profits).

Acquisition of Holdings

Acquisition of a majority stake in a local company's capital is authorized in Guatemala. There are however restrictions concerning certain sectors such as the press, aviation, shipbuilding, for the obvious reasons of security and independence.

Obligation to Declare

Foreign investments are encouraged in Venezuela, and protected by a new legal framework, especially through the dispositions stipulated in the Decree 2095.

The country's agency promoting foreign investment provides information about the permits necessary to business establishment.

Competent Organization For the Declaration

Venezuelan Council for Investment Promotion

Requests For Specific Authorizations

None. In strategic sectors a special authorization is needed.

Investment Opportunities

Investment Aid Agency

Venezuelian Council for Investment Promotion
Website for investment aid

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Venezuela
Globaltenders, Tenders & Projects from Venezuela
Inter-American Development Bank, Tenders in South America
DgMarket, Tenders Worldwide

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