Venezuela

FDI in figures

During the period of political and economic crisis of 2000 to 2004, the country saw an important flight of capital. With the nationalizations carried out in the fields of oil, telecommunications and electricity, many investors withdrew from the country, by obligation or through fear. But since 2004, the country's economy has become more dynamic and investment started up again with, in 2005, a spectacular rise of 187% in comparison with 2004. In 2006, investment other than in oil dropped considerably, going from about 914 million USD in 2005 to 93 million. Of course, this figure must be viewed in the context of 2005's spectacular increase, but it was also the presidential elections of 2006 that revived investors' fears. Since then, Venezuela has made every effort to combine regional and revolutionary policy, while keeping the door open for foreign investors who it knows it badly needs. In 2007, FDI represented 23.7% of GDP. The country's world ranking (regarding investment) is 124 out of 141 (Indicator of performance of incoming FDI flows, calculated by UNCTAD).

Why you should choose to invest in Venezuela

Strong points

Despite their nationalization, ports and airports are being privatised: important markets should therefore be developed in these sectors. The oil sector is very dynamic and propection and exploitation remain attractive, even though the government has made conditions of exploitation more difficult. Numerous markets remain unexploited in the country, namely concerning the production of finished products that are mostly imported. The technological sector remains little developed. In the recent years, a policy of assisting production has given a new impetus to the agro-food industry: coffee, tropical fruit, rice, tobacco, cacao, alcoholic drinks, car industry, component parts and audiovisual production.

Weak points

The statist mode of development advocated by the present-day government could bring about a commercial environment unattractive to foreign investors. Infation, corruption, unemployemnt, the importance of the informal sector, poverty and violence may all impede 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 now 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.

Finding assistance for further information

Investment aid agency

Venezuelian Council for Investment Promotion
Website for investment aid