IMPORT-EXPORT: AMERICAN BUSINESS RESOURCES
Your complete guide on how to start and do business with the USA, Central and South America. Information such as import/export regulations, customs information, tax , currency, copyrights, etc.

BUSINESS IN VENEZUELA
I. POLITICAL AND COMMERCIAL STRUCTURE

1. Political System
The Republic of Venezuela is a representative democracy with division of powers as follows: Executive Branch (referred to as the "National Executive") headed by the President and 22 Cabinet Ministers; Legislative Branch, comprised of two Chambers, Senate and Deputies elected every five years; and a Judicial Branch, headed by the Supreme Court of Justice. The National Territory is divided into 22 states, 1 Federal District and 72 islands. Caracas, the capital of the Republic and the Federal District, is the permanent site of the headquarters of the National Executive.

2. Economic System
The economic rights contained in the Constitution of the Republic of Venezuela include the right to exercise any lucrative or commercial activity. This right, however, is subject to the limitations stipulated in the Constitution and to those established by law with respect to security, health or other matters of national interest.
Notwithstanding, pursuant to foreign investment regulations and other related laws, there are some sectors of the economy reserved exclusively for national investors which will be discussed herein below. Monopolies are not permitted in Venezuela, although certain exclusive concessions may be granted for a limited period of time, for the establishment and exploitation of works and services of public interest.
The Venezuelan State may reserve to itself, the exploitation of certain industries or public services, e.g. the Organic Law which reserves the regulation of the Hydrocarbon Industry and Commerce to the State (also
known as the Oil Nationalization Law). Recently, Venezuela has opened its frontiers to foreign investment in such important fields of the economy as banks, insurance companies and, most notably, the oil sector. The oil opening has been made pursuant to Article 5 of the Oil Nationalization Law, through joint venture agreements with foreign companies and more recently through profit-sharing association agreements. In addition, Venezuela is going through a process of privatization.

3. Financial System
Due to the financial crisis of 1994, a significant part of the financial institutions are owned by the State. However, the Venezuelan Government is taking the necessary steps to sell these institutions to national or
foreign private investors. The financial intermediation in Venezuela is governed by the General Law of Banks and Financial Institutions, enacted in November 1993. This law is a permissive law that states the activities prohibited for banks and other financial institutions and allows those institutions to engage in any activity not expressly forbidden. In addition, the Law introduced important changes regarding banking matters, among these, the following:

a. The extension of the definition of financial intermediation to include the habitual fund taking to carry out investments. Under the former law, the definition of financial intermediation waslimited to deposit taking and lending.

b. The introduction of the unlimited foreign investments in the financial intermediation. Before this law, the foreign investment in the banking sector was limited to the 20% of the capital of the bank.

c. The universal banking. All Financial institutions are under the control, supervision and regulation of the Superintendency of Banks and Other Financial Institutions. Securities transactions are governed by the Capital Markets Law of 1975 and the supervising authority is the National Securities Commission.

4. Legal System
Venezuelan legal system has a legislative origin, founded on "written law" (civil law), as opposed to the "common" or "judicial" law which is the basis for the American, English and Canadian legal systems. The laws are acts which have been approved by Congress as the legislative body. When these laws
systematically include several rules pertaining to a specific matter, they are called Codes, as in the case of the Civil Code, the Commercial Code and the Organic Tax Code. The term "organic" refers to laws with
higher hierarchy than other laws. Therefore, any law approved on a matter regulated by an organic law, shall not be against the rules of the corresponding organic laws. Once a law has been approved by Congress it is sent to the President of the Republic for its promulgation and its publication in the Official Gazette of the Republic of Venezuela, together with the corresponding order of compliance issued by the National Executive. The laws become mandatory as of the date of their publication in the Official Gazette or at a date indicated in the respective text. Of particular importance to business is the Commercial Code. For all matters not resolved by the
Commercial Code, the provisions of the Civil Code shall be applied.

5. Court System
The judicial power of the Supreme Court of Justice and the other ordinary or special courts of law are determined by the respective laws. No recourse or appeal is heard against the decisions of the Supreme Court. The Supreme Court is empowered to: declare null laws which violate the Constitution; decide and resolve upon legal conflicts; decide on conflicts of competence among the courts; and to serve as the court of final appeal. First Instance Courts (lower courts) decisions may be appealed before Superior Courts.
Superior Courts decisions may only be revised by the Supreme Court of Justice on questions of law.
In Venezuela, the Public Ministry is endowed with the task of overseeing the due compliance with the Constitution and its laws. This is the duty of the Attorney General of the Republic, who is elected by the legislative chamber in joint session within thirty (30) days following the beginning of each constitutional period.

6. Culture
The Constitution provides for the right to education as a social right and, accordingly, the Government is obliged to build and maintain schools and institutions in order to make access to education and culture possible. Education in public schools to the completion of the secondary level, is free. The law may, however, establish certain exceptions with respect to superior and special education (universities and technical institutes).
There are several laws in existence in Venezuela which contain provisions concerning education, e.g. the Organic Law on Education and the Universities Law. The Organic Law of the Central Administration grants
the Ministry of Education power to plan and carry out the activities of the National Executive regarding educational matters and also, the promotion of the arts, cultural activities, and the conservation of the folklore, language and literature. Venezuela has thirteen national universities and six academies. It is noteworthy that cultural activities carried out by the National Library in various regions of the country in conjunction with public libraries. The National Council for Culture is charged with supporting our most important cultural activities in various fields.