The Bolivarian Republic of Venezuela is a state placed in the north of South America. It is the largest market in the entire Latin American region because the economy is based on oil production. Venezuela is a platform for new opportunities and favorable conditions for foreign investors, therefore it is a fairly practical jurisdiction for entrepreneurs from all over the world. If you are determined to create a business, then we recommend that you think about registering a company in Venezuela.
The economy in Venezuela is pretty steady and the conditions for opening an organization are quite acceptable.
To register a company in Venezuela, first of all, you need to choose the organizational and legal form for conducting business activities:
- Limited Liability Company.
- Branch of the company.
- Representation of a foreign company.
- Public limited company.
- The latter form of business activity is the most popular.
You must fulfill the requirements listed below and take into account the specifics for the registration of a company in Venezuela to be successful:
- The minimum number of directors: one.
- The minimum number of shareholders: one.
- The authorized capital is $ 400.
- Register a legal address or office space.
- Register a unique company name.
Maintenance and submission of financial statements are mandatory.
An audit is required.
Types of companies in Venezuela
There are several forms of enterprises: an open joint-stock company (SA), a limited liability company (SRL), or a branch. However, SRL is the most popular due to the minimum conditions:
- No minimum capital
- 1 director of any citizenship
- 1 shareholder
- 100% foreign ownership allowed.
SA is not as common as:
- minimum capital of no less than 4 and no more than 400 US dollars
- presence of at least one director and one shareholder of any citizenship
How to start a business in Venezuela: steps
- Register your company name in the Commercial Register.
- Prepare and legalize the constituent documents and the social charter of the company. The documents must comply with the requirements specified in Articles 211-215 of the Commercial Code.
- Open a bank account. The commercial register requires confirmation of the bank account.
- Register with the local commercial register (Registro Mercantil)
- Get TIN (RIF). To issue it, the company must submit an electronic form from the SENIAT website signed by a legal representative.
- Obtain an industrial or commercial license. Founders must submit copies of registration, certificate of sanitary inspection, and the latest balance sheet.
Taxation in Venezuela
The collection system is expressed in tax units, which determine the tax rates. The UT cost in 2019 was 50 VES.
Corporate income tax (CIT): progressive rate (from 0 to 2000 UT – 15%, from 2000 to 3000 – 22%, from 3000 – 34%)
Capital gains: taxed at the CIT rate, while capital losses are deducted from ordinary income
Dividends: levied at a flat rate of 34% on the positive difference between accounting profit and taxable income
Interest: 4.95% (paid to non-resident banks or firms) / standard CIT rates of 15%, 22%, and 34% (applies to 95% of gross income)
Royalty: 34% (applies to 90% of royalties paid)
Municipal taxes: payment from the professional activities of the company at a rate of 0.1% to 10%, depending on the location and type of activity.
Benefits of registering a company in Venezuela
- A foreign company can invest in any business sector without restrictions;
- Investor confidentiality is respected as there is no public register of companies disclosing information about shareholders and directors.