Private companies in Venezuela
29.03.05 | Let's start with this premise: there are few private companies in
Venezuela. If a company's earnings are expressed in Bolivares (the
official currency), then it is not private. If its earnings in hard
currency (US$, Euros, etc.) are lower than its expenses, then it is not
a private company, but completely dependent on the State's monetary
Venezuela, the oil exports account for approximately 80% of the total.
If you add up other State-owned companies (mining, etc.), you will
notice that the real value of the official currency in the country is
practically held up by oil. It's just like a Gold Standard
for the Venezuelan Bolivar, but worse. The international price of oil
is a fickle number that is subject to events in the ever-problematic
Middle East and to the increase in consumption by countries such as
This is not so much of an issue when there is a free
currency exchange but gets markedly worse when the government
introduces currency exchange controls. Hence, you cannot exchange
freely the product of your work. If your company generates its profits
in Bolivares, then you will not be able to purchase US$ or other
currencies unless you register with the Venezuelan government. In the
best case, there's a layer of bureaucracy to sort. In the worse case,
you will need to pay a commission to a government official.
there are companies that by nature, depend indirectly on the State's
budget. The clearest example is advertising and newspapers. When there
is a paper that is all too critical of the government (Talcual,
for example), then the government withdraws its ads from said paper.
When another paper complies with the government's information policy (Ultimas Noticias, for example), then it received government ads and its Director even gets invited to self-congratulatory events.
we have the companies that depend directly on the State. These are in a
far worse condition freedom-wise and have to comply with certain
requirements that are not directly related to the business. For
example, if you are a PDVSA contractor, you cannot hire people that
signed the petition for last year's Recall against the President. This
is completely illegal and against basic Human Rights but allowable
under the noses of the pro-government Judicial system.
in Venezuela there are far less private companies than the official
numbers. If your company falls into the three bullet-points above, then
you really need to re-check who actually owns your business.
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