Generally, companies wishing to do business in Venezuela need not comply with a minimum capital or equity requirement unless they adopt the form of a limited liability company, for which a minimum capital of Bs20,000 is required (Commercial Code, amended in 1955).

Other exceptions to the non-regulation of a minimum capital are contained in the Insurance and Reinsurance Law (revised in 1995) and the General Law on Banks and Other Financial Institutions (revised in 1993). These laws seek to protect the users of the services of banks, financial institutions and insurance and reinsurance companies by requiring that these entities be authorized by the appropriate superintendency only if they have certain levels of subscribed or paid-in capital.

The regulations to the Telecommunications Law issued in November 2000 contain a provision whereby companies wishing to engage in telecommunications services need to comply with a minimum net equity requirement. It may be complied with by including in the calculation the net equity of the shareholders, weighed on the basis of the stock ownership percentage corresponding to each shareholder in the company.

The aim of non-regulation is to foster commercial activity in times of domestic economic stability. Thus a free commercial environment prevails, although the growing need to protect the interests of the public necessitates changes to guarantee that companies and investors can respond adequately to the high demands of capital involved in particular sectors or activities.

For further information on this topic please contact Olga Nass de Massiani or Isabel Victoria Márquez at Travieso Evans Arria Rengel & Paz by telephone (+58 212 277 3333) or by fax (+58 212 277 3334) or by e-mail ([email protected] or [email protected]).

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