Official Name: Bolivarian Republic of Venezuela
Internet Domain: .ve
International Dialing Code: +58
|Location and Size||Credit and Collections|
|Legal Systems||Business Climate|
|Interesting Facts||Business Protocol|
|Economy||Articles of Interest on Venezuela|
|Comparative Economic Indicators||Other Sources of Information|
Venezuela is located in Northern South America, bordering the Caribbean Sea and the North Atlantic Ocean, between Colombia and Guyana. Its total area is 912,050 sq km., which is slightly more than twice the size of California.
Venezuela’s government is a Federal Republic.
- Executive: President Nicholas Maduro Moros, chief of state and head of government; Council of Ministers selected by president
- Legislative: Unicameral National Assembly (165 seats elected by popular vote)
- Judicial: Supreme Tribunal of Justice (32 magistrates elected by the National Assembly)
Venezuela has an open, adversarial court system. Venezuela has not accepted compulsory International Court of Justice (ICJ) jurisdiction.
- The word “Venezuela” literally means “Little Venice”
- In the early 20th century, Venezuela was the largest oil exporter in the world
- Venezuela is one of the oldest democracies in South America
- Venezuela is counted as one of the 17 most bio-diverse countries in the world
- Venezuela has more Miss Universe and Miss World titles than any other country
Venezuela’s modern democratic era lasted from the end of military rule in 1959 until the election of Hugo Chávez in 1999. His hand-picked successor, President Nicolás Maduro, completed the destruction of democratic institutions and established a de facto authoritarian dictatorship in July 2017. Venezuela has the world’s largest proven oil reserves, and oil accounts for almost all exports and half of state revenues. Production is down because of government mismanagement of state-owned oil company PDVSA. Severe shortages of food, medicines, and other consumer goods, combined with near hyperinflation, have accompanied the worst economic contraction ever recorded. Drastically reduced private consumption has incited widespread looting. Many multinational firms have pulled out of the country.
Leading Markets (2018): US 35.18%, Netherlands Antilles 8.56%
note: this excludes oil exports
Leading Exports-commodities: petroleum, bauxite and aluminum, minerals, chemicals, agricultural products, basic manufactures
Leading Suppliers (2018): US 23.66%, Colombia 14.43%, Brazil 9.13%, China 8.44%, Mexico 5.47%
Leading Imports-commodities: agricultural products, raw materials, machinery and equipment, transport equipment, construction materials
Top Industries: petroleum, construction materials, food processing, textiles; iron ore mining, steel, aluminum; motor vehicle assembly
Top Agricultural Products: corn, sorghum, sugarcane, rice, bananas, vegetables, coffee; beef, pork, milk, eggs; fish
|Population growth rate* (%)||1.3||1.2||-0.5||1.2||1.1||1.0|
|Unemployment rate (%)||7.3||11.2||11.0||7.0||5.6||9.7|
|Population below poverty line (%)||87||46.8||unknown||26.0||18.2||12.0|
|GDP** (USD billions)||344.2||431.9||5.1||2.2||1,560.0||14,720.0|
|GDP real growth rate (%)||-12||4.4||2.5||7.5||5.0||2.8|
|GDP per capita** (USD)||12,600.0||9,800.0||6,800.0||10,900.0||13,800.0||47,400.0|
|Public debt (% of GDP)||25.5||44.8||57.0||60.8||41.5||58.9|
|Exports (USD billions)||64.9||40.2||0.8||199.7||303.0||1,270.0|
|Imports (USD billions)||31.4||36.3||1.4||187.7||306.0||1,903.0|
|Reserves of foreign exchange and gold (USD billions)||29.5||26.9||0.5||290.9||116.4||n/a|
|Exchange rate (per USD) 07/24/2018||.0000058||1,843.5||203.2||1.7||12.0||1.0|
|Exchange rate (per EUR) 07/24/2018||.0000050||2,509.1||276.6||2.3||16.4||1.4|
Data from CIA World Factbook
Venezuela is a signatory of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (aka the 1958 New York Convention), as well as most of the other relevant conventions on international arbitration including the Panama Convention and the Washington Convention.
In crisis since 2014, the Venezuelan economy remains in deep recession in 2018 under the impact of hyperinflation and declining oil and gas production. Despite the recent rise in oil prices, oil and gas revenues are likely to continue falling, with production collapsing (-13.5% between October 2016 and October 2017) due to a lack of investment. As oil accounts for 90% of exports, 50% of budget revenues, and almost all of currency earnings, this decline is expected to worsen the existing macroeconomic imbalances.
Coface Country Rating: E -- A very uncertain political and economic outlook together with a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Very high risk.
Coface Business Climate Rating: E -- (same as above)
Venezuela has huge potential for investment and economic growth. This, along with natural resource wealth, has made it attractive to foreign investors. However, political instability, heavy bureaucracy and corruption currently inhibit the business climate.
Companies doing business in Venezuela, or considering such, cite lack of transport and port security and high customs charges as serious problems effecting their business activities in the country.
Transparency of Regulatory System: Political and regulatory uncertainty has seriously discouraged foreign investment in Venezuela. The laws and regulations governing trade, industry and commerce can change dramatically with little or no notice.
Conversion and Transfer Policies: All requests for foreign exchange at the official exchange rate must be approved by the National Exchange Control Administration (CADIVI). The Central Bank (BCV) completes all legal purchase and sale of foreign currency.
Economic Freedom: Venezuela’s economic freedom score is 25.2, making its economy the 179th freest in the 2018 Index of Economic Freedom. Venezuela is ranked 32 out of 32 countries in the South and Central America/Caribbean region, and its overall score is much lower than the world average.
Corruption: Corruption is a significant problem in Venezuela where a culture of corruption exists within most levels of society, according to the Business Anti-Corruption Portal. President Hugo Chávez has openly declared a zero tolerance policy towards corruption, which has been demonstrated by several public initiatives. However, petty corruption is quite common.
As with many Latin cultures, Venezuelans are risk averse, which makes it important that they know and trust the people with whom they do business. Venezuelans prefer face-to-face meetings to doing business by telephone or in writing, as these are seen as too impersonal. Senior positions in business are predominately held by the upper class, so it is important that you pay attention to the hierarchy and show appropriate deference and respect to those in positions of authority.
More information on Business Protocol: Kwintessential
Embassy of the Bolivarian Republic of Venezuela, Washington, DC USA
Venezuelan-American Chamber of Commerce of the United States
This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Venezuela. For further information, contact [email protected].
This report represents a compilation of information from a wide variety of reputable sources.
Comparative Economic Indicators: CIA World Factbook
Risk Assessment information: Coface Country Rating