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

4

  • 2 harmful
  • 0 neutral
  • 2 liberalising

SOURCE

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

Inception date: 29 Dec 2017 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

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.

 

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 29 Dec 2017 | Removal date: open ended
Still in force

FDI: Financial incentive

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. 

 
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Inception date: 29 Dec 2017 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

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%.

 
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Inception date: 29 Dec 2017 | Removal date: open ended
Still in force

FDI: Treatment and operations, nes

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.

 
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