Venezuela - Joint Ventures/Licensing Venezuela - Joint Ventures/Licensing
Joint ventures are common in Venezuela. The principal requirement is registration of the venture with MIPPCOEXIN or the relevant ministry for that industry. U.S. financial institutions will not convert Venezuelan bolivars (VEF) into U.S. dollars, so U.S. firms with operations in Venezuela must exchange their bolivar earnings for dollars in Venezuela to repatriate dividends to their home offices. The GBRV has virtually stopped authorizing dollar sales for earnings repatriation since 2008.
Manufacturing under license is also permitted, but for licensors to collect license fees, royalties, or trademark and patent fees the license must first be registered with MIPPCOEXIN, and the licensees’ bolivar proceeds must be converted into dollars. Such payments are thus also subject to GBRV currency controls.
The Hydrocarbons Law reserves the rights of exploration, production, "gathering," and initial transportation and storage of petroleum and associated natural gas for the state. Primary activities must be carried out directly by the state, by a wholly state-owned enterprise such as Petroleos de Venezuela, S.A. (PDVSA), or by a joint-venture company with more than 50 percent state ownership. The law left refining ventures open to private investment and commercialization activities under a license and permit regime. In contrast, the 1999 Gaseous Hydrocarbons Law offered more open terms to investors in the unassociated natural gas sector. This law opened the natural gas sector to private domestic and foreign investment and created a licensing system for exploration and production regulated by the Ministry of Petroleum. The state retained ownership of all natural gas "in situ," but PDVSA involvement is not required for gas development projects (although the law allows PDVSA to back into 35 percent ownership of any natural gas project). The law prohibited complete vertical integration of the gas business from wellhead to the consumer. The state has also nationalized the electricity sector.
There are restrictions in professional services (attorneys, medical services, CPAs, architects, engineers, etc.), which fall under the Law of Professions. Typically, foreign professionals wishing to work in Venezuela must revalidate their professional credentials at a public Venezuelan university. This requirement, however, does not necessarily preclude providing consulting services under contract for a specific project.