LAW FOR PROMOTION AND DEVELOPMENT OF NEW STARTUPS

 

The Law for Promotion and Development of New Startups, issued by the National Assembly (the “Law”), was published in Official Gazette No. 6.656 Extraordinary, dated October 15, 2021.

The purpose of the Law is: (i) to promote startups; (ii) to promote the harmonious development of national economy; (iii) to further startup initiatives; and (iv) to favor the exercise of the right to freely engage in the economic activity preferred by each individual.

The right to start new businesses is established as the right of every person to participate in the economic activity by starting new businesses. In addition, the State’s obligations to promote the development of new startups are listed.

The State must: (i) create public policies that favor the creation of new startups; (ii) simplify the procedures at all levels of the public administration; (iii) facilitate access to the national market; (iv) promote and foster training plans; the State will develop an Integral Training National Plan to promote a culture and ethics with an entrepreneurial vision.

The media must include in its programming messages and information campaigns that promote the products, innovations, researches, and entrepreneurial culture.

Concerning the payment of taxes by new entrepreneurs, it is established that the National Executive must implement tax incentives through the application of formulas that facilitate the payment of national taxes by the new entrepreneurs. It may also fully or partially exempt the startups from the payment of direct taxes if they meet the requirements of the Law and their annual sales do not exceed the equivalent to ten thousand times the rate of exchange of the currency with the highest value as published by the Venezuelan Central Bank (VCB). Likewise, the states and municipalities must adopt the tax measures and incentives that benefit and promote startups.

The institutions of the banking sector must establish products and services with favorable conditions as to period
of time, rate, and grace periods for promoting and fostering new startups.

The new entrepreneurs must register with the RNE (National Registry of Startups), a public registry kept by the governing body, the purpose of which is to register the new startups and the acts and contracts relating to the same. Registration is mandatory for the startups that have legal personality and for accessing the benefits and incentives established in the Law.

The registration with the RNE will be valid for a maximum period of two (2) years. After this period, the new startup must be registered with the Mercantile Registry under the legal definitions prescribed in the Code of Commerce and other applicable laws.

A national report of the mandatory permits for startups will be made available to new entrepreneurs and a simplified and temporary regime will be established for the obtainment of the permits that allow the operation of the startups registered with the RNE for a period not longer than two (2) years.

Concerning the intellectual property registry, the Law determines that the intellectual property governing body must establish and disseminate preferential rates and procedures for the intellectual property registration of startups.

The Ministry of the Popular Power with competence over economy and finance will be the governing body for startups and will assure the juridical, administrative, financial, and economic guarantees of new entrepreneurs.

The Law became effective upon publication in the Official Gazette.

In order to access the Law, click here.

Should you have any question or comment or require further information, please contact the partner in charge of your account via email.