American Chamber of Commerce (Amcham) CEO Nirad Tewarie has said his membership hopes for “better business conditions within our neighbourhood” so that they could expand.
He was responding to questions on the Prime Minister’s endorsement for businesses to begin looking to Venezuela for business, despite the challenges that came with US sanctions, at Amcham's launch of the Tech Hub Islands Summit (THIS) 2023 on Thursday.
Tewarie said while he had not seen the comments: “Our members are looking to do business wherever the business conditions are right.
“We hope that business conditions within our neighbourhood continue to improve so that we can expand our business activities and our relations with our neighbours.”
Venezuela ranked 188 out of 190 countries according to the World Bank’s latest annual ratings –which compare and rank countries against each other based on each country’s regulatory environments.
It got the same ranking in an index of trading across borders, according to tradingandeconomics.com, and was ranked 181 out of 185 economies for investor protection, noting that it had low marks in each of the indicators, including soundness of banks, ease of access to loans, control of corruption, country capacity to retain and attract talent and domestic market size.
TMF Group, a Dutch multinational professional services firm, said on its website that trading across borders could take longer than a month-two months to be completed – 49 days to export and 71 days to import. It also costs more than double the OECD average for trading.
Gov.UK, in its guidance on overseas business risk guidelines with a focus on Venezuela, pointed out that since 2006 the Venezuelan government has pursued a policy of assuming state control of strategic sectors in the economy for the purpose of national development.
The oil, power, metals and mining and cement industries are all controlled by the state.
TMF Group also said there were 71 tax payments businesses needed to make, taking an average of 792 business hours to process.
Registering a business in Venezuela is a 20-step process which could take more than eight months to complete, according to doingbusiness.org, with some applications taking between a month and three months to be completed. Among the processes which take the longest are registering with the local mercantile registry (34 days), registering at the social security institute (130 days) and getting a licence from a competent municipality (50 days).
In comparison, TT's business registration has to be completed within three months.
An InvesTT guideline on registering businesses said sole proprietors, partnerships and limited-liability companies must complete the first step in the registration process – reserving a business name.
For the second step, limited-liability companies' file articles of incorporation, which can take up to two weeks to be completed.
These issues with doing business in Venezuela are not counting the heavy sanctions placed on Venezuela by the US government, which severely limit how outside investors treat and trade with the country.
On January 2019 the US Office of Foreign Asset Control (OFAC) designated state-owned oil company PDVSA on its specially designated nationals and blocked persons list, in an effort to “hold those responsible for Venezuela’s decline,”
As a result, all property and interests in property of PDVSA subject to US jurisdiction was blocked. This was a severe blow to trade agreements being made between TT and Venezuela over the Dragon gas field.
However, there are several licences in place which would allow for trade and business to take place. TT acquired a licence in the middle of last year after lobbying US officials, including President Joe Biden, which will allow PDVSA, Shell and the TT Government to jointly plan and develop a gas-exporting project, under several conditions. These include a promise that a portion of the resulting gas would be exported to Jamaica and the Dominican Republic and that the Maduro regime would not receive any cash payments from the project.
On Monday, the Prime Minister said TT was suffering from collateral damage because of the US sanctions against Venezuela and encouraged people to see eastern Venezuela as a market for their goods and services as part of the Dragon gas deal.
The licence is valid for two years.