AuthorFulvio Italiani - Arnoldo Troconis - Carlos Omaña - Paula Serra Freire
Fulvio Italiani
Arnoldo Troconis
Carlos Omaña
Paula Serra Freire
D’Empaire Reyna Abogad os
Venezuela is one of the largest Latin A merican economies and one of the world’s
largest oil producers and expor ters, with the fi fth-largest proved oil res erves in
the world (the largest in the Western Hemisphere) and, if we include the e stimated
reserves of extra-heavy crude oil in the Orinoco B elt region, the largest hydroc ar-
bons reserves in the world.
The Bolivarian Republic of Venezuela is a federal republic. T he Venezuelan
government is divided into three levels: the n ational, state, and mun icipal levels.
The political str ucture of Venezuela is set forth i n the Constitution of 1999, as
amended in February 2009. At the national level, the Venezuelan government is
mainly divided into the exec utive, legislative, and judicial bra nches.
376 Chapter 10
Permanent Structures
The options available for foreign companies to set up business in Venezuela are
(i)the registration of a branch ; (ii)the corporation; (iii) the limited l iability com-
pany; (iv)the general partnership; (v)the limited partnership; (vi)the stock limited
partnership; and (vii) the consortium (in th is chapter, the term “company” indis-
tinctively refers to any of the options descr ibed in this parag raph, including the
branch, the corporation, or any of the pa rtnerships, but excluding the cons ortium).
Suitable Corporate For ms
The branch and the corporation are t he two most common options used by foreign
companies to do business in Venezuela. The corporate features of the companies
are set forth in the Venezuelan C ode of Commerce.
The registration of a branch (sucursal) in Venezuela by a foreign company does
not result in a separate legal entit y being formed in Venezuela. Therefore, the foreign
company (head office) will be liable for all the obligations assumed by the branch.
The branch must be registered with a Venezuelan commercial regis try located in
the city of domicile of the branch, a nd such registration must then be publi shed in a
Venezuelan newspaper. The foreign company can choose the domici le of the branch.
The branch must have at least one representative. The branch repre sentative
will have full powers to represent a nd manage the branch, except for the power to
sell or transfer the busines s (unless such power is expressly granted to the repre sen-
tative). Any limitations to the powers of the representative are not ef fective against
third parties.
The foreign company must assign a capital to the bra nch (capital asignado).
The branch capital does not constit ute a limitation of the liabil ity of the foreign
company (head office), since the branch is not considered a legal entit y separate
from the foreign company. The branch capital must be paid by the foreign com-
pany, either in cash or in kind. In cas e of payment in cash, an amount in b olivars
equal to the branch capital must be deposited i n an account opened with a Venezu-
elan bank under the na me of the branch. In case of payment in kind, assets for a
value equal to the branch capital must be contributed to the branch.
Unlike the corporation, t he branch is not required to appoint statutory auditors
or file annual bala nce sheets with the com mercial registr y. However, the branch is
required to keep accounting book s for tax purposes —that is, the jour nal, ledger,
inventory, and VAT books.
The Venezuelan corporation is owned by shareholders and is a lega l entity sep-
arate and distinct f rom its shareholders. The corporation is ind istinctively known
as compañía anónima (CA) or sociedad anónima (SA).
The liability of the sha reholders of a corporation is limited to the payment of
the nominal value (and premium, if a ny) of the shares such shareholder owns. As a

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT