Registering a company in Venezuela

The Bolivarian Republic of Venezuela is located in the northern part of the South American continent. The country's economy is based on the oil industry. Registering a company in Venezuela can be a profitable decision due to the country's proximity to the large American market. Therefore, the government of the Republic seeks to create a comfortable environment for foreign entrepreneurs. Investors can choose the organization's scope in Caracas or any other city in Venezuela.

Advantages of registering a company

• low level of competition;
• availability of local resources;
• possibility of creating a company with one shareholder and 100% foreign capital;
• confidentiality of beneficiaries, shareholders, and directors.

Main forms of legal presence and doing business

• Limited Liability Company (Sociedad de Responsabilidad Limitada -SRL);
• an anonymous company (Compañía Anónima -CA);
• Public Limited Liability Company (Sociedad Anónima - SA);
• a joint stock company with share capital (Sociedad Anónima de Capital Autorizado -SACA);
• public limited companies registered with public money (Sociedad Anónima Inscrita de Capital Abierto -SAICA);
• partnership company (Comandita por acciones);
• sole proprietorship;
• partnership;
• branch.

Most foreign investors prefer to open a company in Venezuela as an SA. A limited liability company can be registered with one shareholder and one director. In this case, the company will be called Sociedad Anónima Unipersonal. The liability of each of the partners is proportional to the capital they have invested, and no minimum amount is set by law. The shares of the company are freely transferable as well as additionally issued after incorporation.

Registration procedure

• reserve a unique company name in the Commercial Registry;
• open a bank account and deposit the share capital;
• register the company in Venezuela at the Commercial Registry (Registro Mercantil);
• publish the articles of incorporation in a newspaper (Gaceta Forense del Registro Mercantil);
• register the corporate books (Book of Shareholders, Book of Minutes of Shareholders' Meetings, and, if applicable, Book of Minutes of the Board of Directors) and the accounting books (Inventory Book, Daily Book, and Book of Accounts) at the Commercial Registry;
• submit the details of the new company to the tax authorities (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) to obtain an identification number (Registro Unico de Información Fiscal - RIF);
• register with local administrative organizations: Seniat, Inces, IVSS, Banavih, Cuerpo de Bomberos, Alcaldía, Sanidad, Sunagro, Sencamer, SNC, INCES;
• obtain the necessary licenses and permits to do business.

Legislation and regulatory environment

The Constitutional Law regulates foreign investment in Venezuela on Foreign Capital Investment (LCIEP). It establishes the following requirements:

• 100% of the declared value of foreign investments must be represented by assets (physical or intangible) located in Venezuela;
• The foreign investment must remain in the country for at least two years;
• Investors may distribute dividends at the end of the first fiscal year, up to 100% of the profits or dividends received from their registered and renewed foreign investments.

Suppose you have decided to open a company in Venezuela. In that case, it is essential to remember that the National Executive Branch reserves the right to make temporary changes in legislation according to the current economic situation. For example, distributed dividends can be reduced to 80% or even 60%.

Tax system

• corporate tax - 34%;
• PIT- 34%;
• VAT -16%;
• dividend tax - 34%;
• capital gains tax is not levied.

Companies registered in the Commercial Register (including branches) are considered tax residents of the country. Therefore, the basis of taxation is worldwide income. In addition, the activities of non-resident companies, which derive their income from economic activities carried out within the country or from assets in Venezuela, shall be taxed.

To open a business in Venezuela: how the lawyers of Prifinance can assist

Registering a business in Venezuela can be complicated due to the abundance of bureaucratic procedures. Furthermore, setting up a company can take time due to the need for document translation into Spanish. The lawyers at Prifinance can help you buy a ready-made business in Venezuela or support you in your efforts to establish a new company. We will select the optimal organizational and legal form of organization per your interests and goals, prepare the necessary documents, and take care of administrative issues. In addition, Prifinance provides accounting services following local legislation.