How to open a company in Venezuela as a foreigner

Venezuela is located on the northern coast of South America. The Venezuelan government is working to diversify its economy, creating a favorable environment for foreign investment and business through attractive preferential policies. With abundant natural resources and a young, dynamic workforce, Venezuela promises to be an ideal location for companies seeking to expand their markets and achieve sustainable development.

Registering a company in Venezuela involves a number of legal and administrative steps. This process is overseen by various government agencies, and while it can be complex, understanding the requirements and procedures will help you successfully launch a business in this country.

Advantages of Opening a Company in Venezuela

• Strategic Location. Its favorable central location allows for extensive trade with nearby markets, including the Caribbean, Brazil, and Colombia. Its vast consumer base numbers over 332 million people.
• Available Natural Resources. Venezuela is rich in natural resources, including minerals, oil, gas, and arable land. The country is the fifth-largest oil producer among OPEC countries. It is one of the four largest international oil suppliers to the United States.
• Competitive labor costs. Companies can create local crews in Venezuela at a lower cost, as wages there are lower than in other Latin American countries.
• Investment policy. To attract foreign investment, the Venezuelan government has introduced a number of regulations, but compliance with them requires knowledge of local conditions. Foreign investor privacy is also strictly observed in Venezuela, as there is no public company registry disclosing details of shareholders and directors.
• Tax Incentives. Foreign investors may be eligible for tax advantages, such as preferential dividend policies and no branch profit tax.
• Opportunities for Diversification. The government is actively promoting diversification beyond the oil industry, opening up opportunities in industries such as food processing, construction, e-commerce, and more.
• 100% Foreign Ownership. Venezuela allows 100% foreign ownership for certain legal forms, such as branches and LLCs.

Company Registration Requirements in Venezuela

To register a business in Venezuela, a number of preliminary requirements must be met. Conditions:

1. For legally conducting business, foreign investors require a TR-N visa.
2. A distinctive business name must be registered and authorized by the Trade Registry.
3. At least one director and one shareholder are required (depending on the type of company).
4. Some business agreements may stipulate a minimum share capital, although this is not usually required.
5. To obtain a fiscal number (RIF), a business must be registered with both the national tax authority (SENIAT) and the Trade Registry.
6. An application for a business license issued by the municipal tax authorities must be submitted. This step is mandatory for companies established for commercial purposes. For example, if you plan to open a company in Venezuela operating as a professional enterprise, this step does not apply.
7. Open a bank account.

Documents for individuals:

• A valid identification card or passport (the latter is required for foreign investors not permanently residing in Venezuela);
• Taxpayer identification number;
• Details regarding the place of residence.

For companies:

• Articles of Association signed in Venezuela;
• Extract from the Commercial Registry confirming the registration of the entity.

When transporting goods, equipment, and other assets that will be used by your company in Venezuela, you will be required to pay applicable import taxes/excise duties depending on the nature goods.

As a foreign investor, you must apply for the most appropriate investment/business visa. Those planning to hire foreign labor must ensure visa formalities applicable to this category of employees.

Business Structures

• Corporation (Sociedad Anónima or SA)

In Venezuela, this is the most widely used structure for international investors. A corporation can be formed with just one director and one interested party (historically, a minimum of two shareholders was required to create such a company, but the Commercial Code contains provisions that allow the transfer of all shares to one person upon incorporation, if so provided in the company's articles of association). Shares are transferable at any time. The company formation process does not require a minimum authorized capital.

If a company has only one director and one shareholder, it can be registered as a "Sociedad Anónima Unipersonal" (SAU). The liability of shareholders depends on the amount of capital they have contributed.

• Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

Despite its availability, it is not as widely used as a corporation. The paid-up share capital must be at least US$4 and no more than US$400. A minimum of one shareholder and one director is required.

• Branch of a Foreign Company (Sucursal)

The activities of the branch are the responsibility of the parent company. Branches operating in Venezuela may be wholly foreign-owned. They can operate in the same economic sectors as local companies and have a local legal representative with full authority to represent the interests of the parent company in Venezuela in all matters.

• Partnerships and Limited Liability Companies

Businesses owned and managed by two or more individuals. Includes general partnerships (Sociedad en nombre colectivo) and limited partnerships (Sociedad en comandita).

• Joint Ventures (Contrato de cuentas en participación)

Created to share the risks, costs, and profits of a specific project or activity between two or more companies.

• Representative Office

Representative offices are not permitted to directly carry out the company's activities. They are available only to financial institutions, such as banks.

A company in which more than 49% of the shares are owned by non-residents of Venezuela is considered foreign. If foreigners own between 19.9% ​​and 49% of a company's shares, it is considered a joint venture, and if foreigners own less than 20% of a company's shares, it is considered a typical local company. A company is also considered a joint venture if at least 30% of its capital is owned by the state or a state-controlled entity.

Step-by-Step Guide to Registering a Company in Venezuela

• Step 1: Choose a business structure.

Choose the company type that best suits your business.

• Step 2:Reserve the company name.

Submit a name registration request to the National Registry of Commerce (SAREN). Ensure the name is unique and complies with local naming regulations.

• Step 3: Draft incorporation documents.

Prepare and notarize the incorporation documents defining the scope of activities, shareholder composition, and management structure. All documents must be translated into Spanish by a certified translator.

Obtain approval from SAREN and the Venezuelan Trade Registry.

Submit the "Declaration of Origin and Destination of Funds" (The "Authorized Declaration of Origin and Destination of Funds" is a mandatory document in Venezuela by which an individual or legal entity officially confirms the legal origin and intended use of their funds. Its authenticity is confirmed by an oath before a competent authority, such as a notary or a commercial registry.

• Step 4: Register for tax identification.

Obtain a Tax Identification Number (RIF) from SENIAT (Venezuela's tax office). Register for Value Added Tax (VAT), if applicable to your business.

• Step 5: Open a corporate bank account.

Deposit the required minimum capital into a local Venezuelan bank. Provide proof of company registration and shareholder agreements.

• Step 6: Obtain business licenses and industry permits.

If necessary, apply for additional licenses with regional and municipal authorities.

• Step 7: Register for social security and employment insurance contributions.

Enroll employees in Venezuela's social security and pension programs.

Tax Reporting and Payments

All foreign-invested enterprises are required to submit annual reports on compliance with their status as a foreign-invested enterprise, including:

• financial statements audited by independent Venezuelan certified public accountants;
• minutes of shareholder meetings on capital increases, decreases, or transfers, if any;
• minutes of shareholder meetings on dividend distributions and taxes due;
• investors must file a dividend remittance notification;
• foreign investors may remit dividends equal to 100% of the company's total annual income to Venezuela each year.

Registering a company with foreign investment in Venezuela takes up to two months.

The corporate income tax rate is the same for all companies in the country, with the exception of oil companies, which are subject to an additional corporate income tax (royalty). Venezuela's Ministry of Energy and Petroleum may reduce the royalty rate for labor-intensive oil projects.

Withholding tax varies depending on the type of payment, namely:

• payments for loans from financial institutions located outside Venezuela;
• payments for technology services;
• payments for technical support;
• payments for intermediary, marketing, consulting, and other support services.

Companies' gross profits are subject to municipal tax depending on the type of activity.

Companies also pay asset tax, capital gains tax, and value-added tax.

There are no exchange controls in Venezuela. Authorized banking institutions may buy and sell foreign currency without restrictions and for any type of transaction.

All transactions related to foreign investments, dividends, capital repatriation, as well as transfers of payments and remuneration for technology services, interest, and basic profits on foreign loans, are conducted at a floating exchange rate set daily by the Central Bank of Venezuela.

Venezuela is not a tax haven or offshore jurisdiction, and the concept of a Venezuelan tax-exempt company (and/or the registration of a Venezuelan offshore company, international business company, trust, foundation, etc.) does not exist as such in Venezuela. Company registration in Venezuela can be arranged through a professional registered agent providing incorporation, virtual office, and other corporate services. You can open a company in Venezuela by correspondence, but opening a bank account in Venezuela will most likely require an in-person visit.

• Corporate Tax: The standard corporate income tax rate in Venezuela is 34% of net profit.
• Value Added Tax (VAT): If your business sells goods and services, you are subject to VAT at 16%.
• Social Security Contributions: As an employer, you must contribute between 9% and 11% of employee wages for pensions, health care, and unemployment benefits.