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Bolivarian Republic of VenezuelaMinistry of Production and Trade

Superintendency of Foreign Investments

Venezuela: Land of Opportunities

Legal Security of your Investment

web:http//www.siex.gov.ve

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¿ Who are we?

The national agency responsible for

carrying out the Ministry of

Production and Trade’s policies

related to the promotion, protection

and registration of foreign direct

investment and subregional

investment. We qualify the foreign

character of all firms, except in the

case of financial and oil sectors

firms, and we register the

technology transfer contracts

entered into in all non-oil sectors.

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Venezuela’s Legal Regime for the Promotion and Protection of Investments

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Constitution de la Bolivarian Republic of Venezuela

Title IV

Of the Socioeconomic System

Chapter I

Of the Socioeconomic Regime and the State’s role in the economy

“Article 301. The State reserves to itself the use of trade policy to defend the economic activities of national enterprises, both public and private. No foreign person, enterprise or organization shall be granted regimes that are more advantageous than those established for nationals. Foreign investment shall be subject to the same conditions that prevail for domestic investment. ”

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LEGAL FRAMEWORK

National Regulations

Decisions 291 and 292 of the Andean

Community

Decree 2.095

March - 3 -1992

Common regime on the treatment of foreign capital and on trademarks, patents, licenses and royalties.

Decree 356

Nov - 18 - 1999

Decree with the rank and force of Law for the Promotion and Protection de Investments.Decree 1867

July - 22 - 2002

Regulation of the Law for the Promotion and Protection de Investments

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DECREE WITH THE RANK AND FORCE OF LAW FOR THE PROMOTION AND PROTECTION OF INVESTMENTSDECREE Nº 356 October 03, 1999

HUGO CHAVEZ FRIAS

President of the Republic

• The purpose of this Law-Decree is to provide investments and investors, both domestic and foreign, with a stable and predictable legal framework through which they can operate in a secure environment, by regulating the State’s actions towards these investments and investors, in order to achieve an increase, diversification and harmonic complementarity of investments that contributes with the nation’s developmental goals.

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•Direct Foreign Investment: All contributions of foreign origin, by either individuals or companies, to the capital of a firm, delivered either as convertible currency or as physical or tangible goods such as industrial plants, new or refurbished machinery, new or refurbished equipment, spare parts, raw materials or intermediate products. Also included are investments in national currency from resources that are eligible to be sent abroad, as well as the reinvestments carried out in accordance with this regime.

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•International investments shall have the right to be treated in a just and equitable manner according to the norms and criteria of International Law, and shall not be subjected to arbitrary or discriminatory measures that hinder their presence, administration, use, enjoyment, expansion, sale or liquidation.

•International investments and investors shall have the same rights and obligations that apply to national investments and investors in equivalent circumstances; the only exceptions to this shall be those mentioned in special laws and the limitations set forth in this Law-Decree.

•International investments shall need no prior authorization, except in those cases in which they are explicitly required the law.

•International investments and investors shall not be discriminated against on the basis of the country of origin of the invested capital.

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• In keeping with the laws, regulations and policies on the entry

and presence of foreigners in the country, temporary entry will be

allowed for persons that provide services to the enterprise in

which the investment has been made, its parent company, its

affiliate or its subsidiary, and that are either employed in

administrative or executive positions, or involved in tasks that

require specialized know-how essential for the investment’s

normal activities, without prejudice of the limitations set forth in

national labor laws.

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• Any foreign direct investment or subregional investment that fulfills the conditions set out in this Regime and in the respective national legislations of the Member Countries shall be registered before the appropriate national agency, in freely convertible currency.

•Owners of a direct foreign investment and subregional investors shall have the right to transfer abroad, in freely convertible currency, the proven net profits earned by the operation of the foreign direct investment, in the manner contemplated by the legislation of each Member Country. •Transfers are to be made without delay, in convertible currency, at the exchange rate prevailing on the date of the transfer and in accordance with the foreign exchange regulations in force at the time of the transfer.

•The appropriate national agency may also register, in freely convertible currency, the investment of funds left over after the distribution of dividends.

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•The National Government shall put in place specific regimes to grant the

incentives or benefits contemplated herein. Those regimes shall take into

account the manner in which any given investment contributes with

development objectives, particularly those related to the training of human

resources, productive development and the insertion of the Venezuelan

economy in the world economy, by means such as:

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Human resource development and scientific and technological research;Enhancement of productive sector competitiveness;Expansion of the value added content of export activities, including the provision of services with substantial knowledge content;The promotion of business networks, complexes and chains of production that contribute to the addition of value;The strengthening and development of small and medium-sized firms;Export promotion in general;Infrastructure development, particularly of infrastructure that contributes to competitiveness and international trade; and The development of activities that promote conservation and environmental protection.

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•The Republic may subscribe juridical stability contracts through which the investor is offered guarantees that certain economic conditions shall remain stable during the life of the contracts.

Minimum requirements for the subscription of JSCs

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Depending on the sector of economic activityinvolved, the contracts shall be subscribed with

the National Agency in charge of applyingthe regulations that rule the particular sector

SIEX

SUDEBAN

SUDESEG

MEM

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What is the purpose of a JSC?

To guarantee the stability of certain economic conditions, such as:

1) Stability of the national tax regimes in forceat the time the contract is signed.

2) Stability of export promotion regimes.3) Stability of one or more of the specific benefits

or incentives invoked by an investor or by the company in which an investment has been made, as the case may be.

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How can an investor obtain the benefits of a JSC?

He must comply with one or more of the following requirements:Create fifty (50) or more new direct jobs, or;Present a program for the development of the production and competitiveness of the firms involved, or;Present a contract by which the owners of an investment, or the participants in the enterprise that receives the investment, transfer the technology to be used for the investment project, or;Make a commitment to train the firm’s human resources and carry out research and development directed towards the discovery of production process innovations, in collaboration with Venezuelan universities.

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•Juridical stability contracts:

Must be entered into before the investment is made and shall be effective for no more than ten (10) years after their signature;

May only be subscribed by companies or investors, as the case may be, that agree to carry out specific investment programs in which they provide other compensations, in ways that shall be specified in the Regulations for this Law-Decree

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Who can be a beneficiary of a JSC?

Natural persons or legal entities, business groups or corporations, whether they be Venezuelan, mixed or foreign, who are fully enabled to engage in economic activities and can offer proof of their economic, financial, technical and professional viability.

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To be eligible for a juridical stability contract an interested investor, or an enterprise that receives an investment, must file, along with the investment project to which the contract would be applied, a request before the appropriate Agency presenting the appropriate supporting arguments. When filing its request, the interested enterprise must also provide the following documents:

A copy of the identification document of the representative of the enterprise that receives the investment, and of the documents that certifying he is authorized to enter into commitments in the enterprise’s name. If he is acting as an authorized representative, he must present a copy of an authenticated power of attorney.

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If new laws are approved after the entry into force of a juridical stability

contract that set forth regimes more beneficial than those guaranteed in the

contract, the parties may adjust the terms of the contract, but only in matters

affected by the adoption of the new regime. In any case, the period for which

the contract remains in force shall be the same as originally agreed.

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Superintendencia de Inversiones Extranjeras SIEX

ACTIVIDAD ECONOMICA MONTO

Agricultura y Cria 16.764.868,91Comercio 29.553.364,06Construcción 5.344.996,58Electricidad, Gas y Agua 21.471.002,02Industria Manufacturera 164.432.567,29Inv. Inmobiliaria, Serv. Finan. y Otros Servicios 35.857.350,56Servicios Comunales, Sociales y Personales 11.161.584,01Transporte, Almacenamiento y Comunicaciones 889.654.344,76

TOTAL 1.174.240.078,19

Ministerio de Energía y MinasMineria 1.636.584,45Carbón 581.201,36Hidrocarburo 4.233.287,00Petroquímica 21.487.713,00Gas 6.759,00

TOTAL 27.945.544,81

Superintendencia de Bancos SUDEBANBanca 115.779.418,14

TOTAL 115.779.418,14

TOTAL SIEX, MINAS, SEGUROS Y BANCA 1.317.965.041,14

Fuente: SIEX, Ministerio de Energía y Minas, Superintendencia de Bancos

Registro de Nueva Inversión Extranjera Directa Cifras Consolidadas por Actividad Económica de Organismos Registrales

Venezuela Año 2003 en Dólares (USD)

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1.174,24

27,95 115,78

0,00

200,00

400,00

600,00

800,00

1.000,00

1.200,00

Mill

ones

de

USD

Registro de Nueva Inversión Extranjera Directa Siex, Energia y Minas y Banca Año 2003

en Millones de Dólares (USD)

SIEX

MINAS

BANCA

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Registro de Nueva Inversión Extranjera Directa Participación porcentual por Actividad Económica Año 2003

Comercio2,24%

Agricultura 1,27%

Construcción 0,41%

Elect., Gas y Agua1,63%

Ind. Manufacturera12,48%

Inv. Inmobiliaria, Serv. Finan. y Otros

Serv.2,72%

Petroquímica1,63%

Hidrocarburo0,32%

Mineria0,12%

Carbón0,04%

Transp., Almacenamiento y Comunicaciones

67,50%

Serv. Comunales, Soc. y Personales

0,85%

Banca8,78%

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PAIS Agricultura Comercio Construcción Electricidad, Gas y Agua

Industria Manufacturera

Inv. Inmob., Serv. Finan. y Otros Serv. a las Empr.

Serv. Sociales, Comunales y Personales

Transporte, Almacenam., y Comunicac..

TOTAL

EE.UU. 15.754.636,41 3.678.758,33 6.606,49 0,00 78.561.838,70 5.168.478,95 4.575.528,03 888.146.663,81 995.892.510,72

Países Bajos-Holanda 0,00 9.977.259,30 0,00 18.878.725,76 475.257,23 20.143.655,13 0,00 1.045.356,00 50.520.253,42

Panamá 0,00 3.452.178,54 0,00 0,00 17.607.212,52 985,00 0,00 196.656,84 21.257.032,90

Colombia 0,00 8.813.411,85 0,00 0,00 8.283.840,22 466.537,15 27.498,23 81.163,69 17.672.451,14

Francia 0,00 0,00 498.995,61 0,00 15.347.499,65 90.121,42 0,00 100.655,22 16.037.271,90

Caiman Islas 751.668,42 0,00 0,00 0,00 5.159.192,00 0,00 6.049.797,75 0,00 11.960.658,17

España 258.564,08 527.785,09 271.087,56 0,00 8.477.602,28 1.618.916,18 3.594,54 479,94 11.158.029,67

Alemania 0,00 33.054,10 4.568.306,92 0,00 1.156.566,25 4.059.816,48 0,00 0,00 9.817.743,75

Bélgica-Luxemburgo 0,00 0,00 0,00 0,00 9.744.726,32 0,00 0,00 0,00 9.744.726,32

Japón 0,00 0,00 0,00 0,00 6.300.536,00 2.788.713,91 0,00 0,00 9.089.249,91

Virgenes Británicas Islas 0,00 0,00 0,00 0,00 4.350.601,15 21.748,91 0,00 0,00 4.372.350,06

Suiza 0,00 467.610,73 0,00 0,00 2.000.000,00 901.363,80 0,00 0,00 3.368.974,53

Uruguay 0,00 0,00 0,00 0,00 2.804.463,89 0,00 0,00 0,00 2.804.463,89

Reino Unido-Inglaterra 0,00 673,71 0,00 2.592.276,26 12.500,00 18.796,99 0,00 1.009,49 2.625.256,45

Costa Rica 0,00 0,00 0,00 0,00 1.764.011,05 0,00 0,00 0,00 1.764.011,05

Bahamas Islas 0,00 1.434.180,66 0,00 0,00 0,00 0,00 0,00 0,00 1.434.180,66

Resto países 0,00 1.168.451,75 0,00 0,00 2.386.720,03 578.216,64 505.165,46 82.359,77 4.720.913,65TOTAL 16.764.868,91 29.553.364,06 5.344.996,58 21.471.002,02 164.432.567,29 35.857.350,56 11.161.584,01 889.654.344,76 1.174.240.078,19Fuente: Superintendencia de Inversiones Extranjeras SIEX

SIEX

Registro de Nueva Inversión Extranjera Directapor País de Orígen / Actividad Económica

Año 2003 en Dólares (USD)

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Registro de Nueva Inversión Extranjera DirectaParticipación Porcentual por País de Origen

Año 2003 en Dólares (USD)SIEX EE.UU.

84,81%

Francia1,37%

Colombia1,50%

Panamá1,81%

Países Bajos-Holanda4,30%

Caiman Islas1,02%

Resto Paises5,19%

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Superintendencia de Inversiones Extranjeras SIEXACTIVIDAD ECONOMICA 1999 2000 2001 2002 2003 TOTAL

Agricultura y Cria 16.679.971,06 4.099.594,15 595.510,97 3.755.546,40 16.764.868,91 41.895.491,48

Comercio 254.403.018,49 196.901.902,16 279.521.183,99 14.747.271,94 29.553.364,06 775.126.740,64

Construcción 42.529.623,32 64.788.819,78 1.886.644,46 20.949.786,96 5.344.996,58 135.499.871,10

Electricidad, Gas y Agua 37.017.344,14 35.740.801,25 2.998.554,25 0,00 21.471.002,02 97.227.701,66

Industria Manufacturera 79.966.382,55 153.646.682,11 28.261.781,90 120.304.447,99 164.432.567,29 546.611.861,83

Inv. Inmobiliaria, Serv. Financieros y Otros Servicios prestados a las empr.

40.400.637,19 42.626.601,41 31.860.213,62 106.804.372,56 35.857.350,56 257.549.175,34

Servicios Comunales, Sociales y Personales 6.640.856,18 10.553.385,22 1.464.580,34 1.081.929,08 11.161.584,01 30.902.334,83

Transporte, Almacenamiento y Comunicaciones 38.114.998,92 77.121.052,75 381.087.469,30 28.859.047,81 889.654.344,76 1.414.836.913,53

TOTAL 515.752.831,86 585.478.838,82 727.675.938,82 296.502.402,74 1.174.240.078,19 3.299.650.090,43

Ministerio de Energía y MinasHidrocarburo 233.906.058,30 285.844.377,28 110.473.256,78 41.032.726,27 4.233.287,00 675.489.705,63

Minas 0,00 0,00 0,00 0,00 1.636.584,45 1.636.584,45

Carbón 0,00 0,00 0,00 0,00 581.201,36 581.201,36

Petroquímica 2.848.171,38 3.647.954,38 109.888.011,00 0,00 21.487.713,00 137.871.849,76

Gas 76.696,80 76.696,80 0,00 0,00 6.759,00 160.152,60

TOTAL 236.830.926,48 289.569.028,46 220.361.267,78 41.032.726,27 27.945.544,81 815.739.493,80

Superintendencia de SegurosSeguros 48.743.627,80 9.661.889,00 75.336.039,49 0,00 0,00 133.741.556,29

TOTAL 48.743.627,80 9.661.889,00 75.336.039,49 0,00 0,00 133.741.556,29

Superintendencia de Bancos SUDEBANBanca ND ND ND 730.709.273,53 115.779.418,14 846.488.691,67

TOTAL ND ND ND 730.709.273,53 115.779.418,14 846.488.691,67

Total Siex, Minas, Seguros y Banca 801.327.386,14 884.709.756,28 1.023.373.246,09 1.068.244.402,54 1.317.965.041,14 5.095.619.832,19

Fuente: SIEX, Ministerio de Energía y Minas, Superintendencia de Seguros, Superintendencia de Bancos

Registro de Nueva Inversión Extranjera Directa

Período 1999 - 2003Cifras Consolidadas por Organismo Registral

La República Bolivariana de