Doing Business in Venezuela

02/25/1999

Introduction

The election of former Colonel Hugo Chavez as President of Venezuela in December 1998 has brought international attention to Venezuela, a Latin American country possessing the world's third largest oil deposits and a population of more than 23 million people. Chavez won the election by campaigning on a strong populist platform that promised a reduction in state corruption and constitutional reform, while keeping market reforms in place. Venezuela is currently recovering from this past election year and business is cautiously returning to normal.

In recent years, Venezuela has been hurt by slumping oil prices on world markets, an economic crisis precipitated by a failed policy of currency controls that has placed Venezuelan financial institutions in a state of crisis, and allegations of corruption among public officials. However, despite recent setbacks Venezuela remains a potentially attractive target for foreign investors. Deregulation of certain key sectors such telecommunications and financial services, privatization of former states industries, and the opening of the oil sector to private investment in the form of joint ventures with PDVSA, suggest that Venezuela is ripe for increasing foreign investment.

This article serves as an overview to doing business in Venezuela.2 Part II is an introduction to the Venezuelan legal system. Part III addresses substantive areas of law of particular interest to foreign investment such as company law, foreign investment regulations, labor law, taxation, intellectual property law, and other issues. The final part reviews the legal framework for specialty areas such as the oil industry, financial services, and telecommunications.

For the complete publication please download the PDF below.

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