ANNOUNCEMENT 29 Dec 2017
On December 29, 2017, the National Constituent Assembly of Venezuela issued the new Constitutional Law on FDI establishing the principles, policies and procedures that regulate foreign investment in goods and services.
NUMBER OF INTERVENTIONS
Official Gazette of Venezuela. aceta Oficial de la República Bolivariana de Venezuela. Gaceta Oficial No. 41.310: Ley Constitucional de Inversión Extranjera Productiva. Available at: http://dctos.finanzasdigital.com/Gaceta-Oficial-41310-Ley-Inversion-Extranjera.pdf
One of the key changes introduced in the Constitutional Law of Productive Foreign Investment issued on December 29, 2017, by the National Constituent Assembly of Venezuela referred to the rules concerning entry and ownership. In this sense, the new law reduced from five to two years the minimum term required for foreign investments to remain in the country.
Article 23 of the Constitutional Law of Productive Foreign Investment issued by the National Constituent Assembly of Venezuela on December 29, 2017, establishes that the new rules concerning this law will incorporate tax exemptions for investors.
In addition, this article also contemplates other financial incentives such as accelerated amortizations and special credit conditions.
Moreover, the Constitutional Law of Productive Foreign Investment also contemplates the possibility of incorporating import duties exemptions.
In contrast to the liberalising interventions described here, the Constitutional Law of Productive Foreign Investment issued by the National Constituent Assembly of Venezuela on December 29, 2017, increased the constitutive value of the foreign investment that has to be represented by tangible assets in Venezuela up to 100% whereas in the previous legislation it was limited to up to 75%.
In addition, the new foreign investment law forbids foreign companies to participate directly or indirectly in the national political debate, neither act as public opinion agents and interfere anyhow with topics of public interest.
In general, failure to comply with the Law may expose the investors to fines of up to 2% of the total investment.