As of the time of this writing, July 25, 2018, Venezuela has been in economic and political turmoil. In 2017, the GDP of the country declined by 17%. Hyperinflation is currently destroying the Venezuelan economy, with inflation at 43,000% over last year and one cup of coffee costing 1,000,000 Venezuelan bolivars in June 2018 (Source). According to a recent (Gallup Survey), Venezuela ranked as the most dangerous country in the world and violence is rampant, worse than conflict-ridden areas like Afghanistan and South Sudan. Caracas, the Venezuelan capital, ranks as the second-most dangerous city in the world. This is not a good time to be doing business in Venezuela.
On another level, doing business is incredibly difficult, as of July 2018 the local currency is basically worthless, and individuals have to store value in foreign currency and quickly transfer out of it to even be able to do any transactions. Even the laws are uncertain, as the former Venezuelan National Assembly was rendered powerless last year with power given to the government-alligned National Constituenty Assembly, which has given itself legislative powers in addition to the ability to reqrite the constitution (Source). No one can tell how the political situation will unfold in Venezuela and it may change drastically in a few months or a year as of July 2018. It is no surprise that Venezuela is the lowest Latin American country on the World Bank Group’s Doing Business ranking and almost the lowest in the world, at 188th place out of 190 countries globally. A Forbes article called Venezuela the hardest place in the world to be an entrepreneur.
A failed economy is an interesting time for cryptocurrency in Venezuela. As the local currency loses value, a small minority of people have found usage in crypto as a currency, a store of value, and as an income source through mining (Source). Cryptocurrency is bringing some relief to some families caught in the crisis, but companies looking to provide crypto services to Venezuela are advised to set up in other countries, such as Colombia, which is the third highest country in Latin America on the World Bank Group’s Doing Business Ranking, after Mexico and Peru.
This guide is geared towards those still interested in setting up a company in Venezuela (perhaps after the political and economic situation clears down significantly). Although it is impossible to forecast the political and legal situation that far in advance, we will do our best to sketch out the overall legal framework that persisted in Venezuela in the preceding years in the hopes that it will not change too much after the crisis.
The most popular forms of company incorporation are public companies limited by shares (Sociedad Anonima) and limited liability companies (sociedad de responsabilidad limitada). Venezuela also has general partnerships (sociedad en nombre colectivo), simple limited liability partnerships (sociedad en comandita simple), and stock limited liability partnerships. (Source).
To set up a company, the list of requirements is found in Article 215 of the Venezuelan Commercial Code. You need to:
There are two types of nonprofits in Venezuela, Civil Associations and Foundations. Foundations must engage in activities that contribute to the public benefit such as scientific, literary, or artistic endeavors, while associations may engage in a broader type of activity. Not all organizations are tax-exempt; organizations participating in charitable, social service, religious, artistic, scientific, conservation, environmental, technological, cultural, sports, or professional activities are tax-exempt. (Source). To found a civil association in Venezuela, prepare articles of incorporation and submit them with payment to the public registry in the municipality that you are incorporating in. Then, receive the Tax Registration Information. Finally, prepare the statues and internal regulations for your organization.
It is reiterated that the presence of laws and procedures may not translate to actual ability to implement them in the present 2018 situation in Venezuela.
[Bitcoin Lessons from Venezuela, Where Hyperinflation Reigns | Lathrop Gage - JDSupra](https://www.jdsupra.com/legalnews/bitcoin-lessons-from-venezuela-where-80856/) |
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