Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Venezuela. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Reserve company name | 4 days | 0.5 UT (name search) + 2 UT (name reservation) |
| 2 | Obtain an approval of the company name. | 3 days | no charge |
| 3 | Lawyer must prepare and legalize the company’s constitutive documents and social statutes. | 5 days | VEB 5,000-8,000 |
| 4 | Open bank account | 1 day | no charge |
| 5 | Register at the local mercantile registry (Registro Mercantil) | 30 days | 1% of capital + VEB 180 (2 UT) (fixed fee) + VEB 450 ( 5 UT) fiscal rights (fixed fee) + 9 VEF ( 0.1 UT) per page + 18 VEF per page stamp tax (for original document, registry copy and company copy) |
| * 6 | Publish articles in a local newspaper (Gaceta Forense del Registro Mercantil) | 3 days (simultaneous with previous procedure) | VEF119 |
| * 7 | Register company books | 1 day (simultaneous with previous procedure) | VEF 120 per each book +0.03 UT (VEF 2,28) fixed fee + 0.001 UT ( per page per registration) Each book has 100 pages |
| 8 | Register at the local Servicio Nacional Integrado de Administración Aduanera y Tributaria (SENIAT) with Registro Unico de Información Fiscal (RIF) to obtain fiscal number | 1 day | no charge |
| 9 | Obtain tax clearance certificate at municipal level (Instituto Municipal de Aseo Urbano). | 1 day | VEF 20 |
| 10 | Register with the Ministry of Labor | 1 day | no charge |
| 11 | Go through a labor inspection (by the Labor Inspectorate). | 8 days | VEF 0.1 x UT (stamp cost) |
| 12 | Register for social security at a local regional fund. | 90 days | no charge |
| * 13 | Register at the National Institute of Socialist Cooperation & Education | 1 day (simultaneous with previous procedure) | no charge |
| * 14 | Obtain fire approval and undergo an inspection. | 28 days (simultaneous with previous procedure) | no charge |
| * 15 | Obtain conformity of use certificate (zoning permit) | 15 days (simultaneous with previous procedure) | VEF 450 (5 UT) + VEF 1.8 (0.02 UT) stamp |
| * 16 | Obtain industrial or commercial license from competent municipality | 50 days (simultaneous with previous procedure) | VEF 900+VEF 1.8 |
| * 17 | Register at National Bank for Housing and Habitat - Banco Nacional de Vivienda y Habitat (BANAVIH) | 1 day | no charge |