Law for the Promotion and Development of New Enterprises

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Simplified business registration and support framework enabling entrepreneurs to establish formal ventures through national registry while accessing tax incentives and government financing.
What are the main aims and objectives?

Venezuela's Law for the Promotion and Development of New Enterprises (published October 15, 2021, effective January 1, 2022, with amendments September 16, 2024) represents government policy establishing streamlined business registration pathway, tax incentives, financing access, and comprehensive entrepreneurship support aimed at economic diversification, private sector development, and inclusive wealth creation. The law pursues foundational objective of promoting entrepreneurship and economic diversification by increasing production diversity and incorporating innovation into Venezuela's economic and social development. The regime targets formalization of informal economic actors and individuals considering business establishment by reducing bureaucratic barriers and providing accelerated pathway to legal business status, recognizing that complex traditional registration procedures inhibited new venture formation particularly among small entrepreneurs and vulnerable populations. 

The regime aims to create favorable entrepreneurship ecosystem through integrated government support encompassing policy support, financing access, training provision, administrative simplification, and institutional coordination. Additional objectives emphasize harmonious national economic development through distributed entrepreneurship rather than concentrated economic activity, fair wealth distribution and production accessibility, guaranteed right to economic participation, and support for specific priority groups including women, youth, disabled individuals, and entrepreneurs pursuing sustainable projects. The law reflects Venezuelan government commitment to private sector development and inclusive economic participation during period of significant macroeconomic challenges, positioning entrepreneurship as pathway to employment generation and improved living standards.

How does the program work?

The law operates through integrated system combining registration mechanisms, tax incentives, financing access, administrative simplification, and institutional support.

National Registry of Entrepreneurship: The law establishes National Registry of Entrepreneurship as central operational mechanism providing legal personality to registered ventures. Entrepreneurs register new ventures with the registry rather than immediately pursuing full Commercial Registry registration. Legal status conferred through National Registry registration remains valid for maximum two years, after which ventures must complete transition to Commercial Registry through standard procedures to continue operations as permanent legal entities.​

Tax Incentives and Exemptions: Government exempts enterprises and ventures completely or partially from payment of direct taxes when meeting specified requirements, as long as annual sales do not exceed amount equivalent to 10,000 times the official exchange rate of currency of greater value published by Central Bank of Venezuela. This provision effectively exempts ventures with modest annual revenue from corporate income taxation, substantially reducing tax burden on small and early-stage enterprises. As exchange rates fluctuate, the tax exemption threshold adjusts automatically with Central Bank exchange rate changes.​

National Fund for Entrepreneurship: The law creates dedicated government financing mechanism attached to Ministry of Popular Power for Economy and Finance, with authority to finance and support ventures registered in National Registry. The Fund receives financing from resources allocated by National Executive (government budget appropriations), reimbursable financing resources (repayment from funded ventures), donations and gifts, and assets obtained from fund operations. The Fund provides financing to registered entrepreneurs through loans and grants with favorable terms regarding interest rates, payment periods, and grace periods compared to standard commercial financing.​

Administrative Simplification: Government must eliminate unnecessary bureaucratic barriers for establishing new enterprises and ventures, reducing compliance burden compared to traditional company registration. Government simplifies and improves registration and control procedures through homogeneous digital means, enabling online application and processing.​

Intellectual Property Support: Intellectual property authorities must disseminate procedures and provide preferential fee schedules for entrepreneurs registering trademarks and patents.​

Provisional Operating Authorization: Government publishes comprehensive national report of mandatory permits required for different business types, accompanied by simplified and provisional authorization system. Projects may operate for up to two years while completing final regulatory requirements, reducing initial compliance burden.​

Training and Capacity Building: Government develops National Comprehensive Training Plan promoting entrepreneurial vision and culture across administrative, managerial, financial, and scientific-technical fields. Specialized training programs support women, youth, disabled individuals, and sustainable enterprise developers.​

National Entrepreneurship Network: The law establishes "open space for participation and encounter between organs and entities of the State, entrepreneurs, organizations and any other person who has a vocation to support the generation and development of entrepreneurship," facilitating coordination among government, entrepreneurs, support organizations, and stakeholders.​

What is the overall cost?

No information available.

How was it implemented?

Policy Foundation and Strategic Planning (2018-2021): Venezuela's government identified necessity to promote private sector development and entrepreneurship as component of broader economic recovery strategy following severe economic contraction during 2013-2020 period. Policymakers recognized that complex business registration procedures and bureaucratic barriers inhibited new venture formation, particularly among small entrepreneurs and vulnerable populations (women, youth, disabled individuals). Government strategists identified entrepreneurship as potential pathway to employment generation and improved living standards during period of significant economic challenge.​

Legislative Drafting (2020-2021): The Venezuelan National Assembly undertook legislative drafting of comprehensive entrepreneurship promotion law synthesizing multiple policy objectives including administrative simplification, tax incentives, financing access, training support, and institutional coordination. The drafting process incorporated consultations with government agencies, private sector representatives, and international development partners.​

Parliamentary Approval and Publication (October 15, 2021): The National Assembly approved the Law for the Promotion and Development of New Enterprises, formally published in Official Gazette No. 6,656 Extraordinary on October 15, 2021. The law represented government legislative commitment to entrepreneurship development as economic policy strategy despite macroeconomic constraints Venezuela was experiencing.​

Effective Implementation Date (January 1, 2022): The law became effective January 1, 2022, allowing entrepreneurs to commence registration under the new simplified regime. Government institutions undertook implementation establishing operational mechanisms including National Registry operationalization, National Fund for Entrepreneurship activation, and Ministry of Economy and Finance authority establishment.​

Institutional Development (2021-2024): Following legislative enactment, government institutions undertook implementation establishing operational mechanisms. The National Registry of Entrepreneurship was operationalized enabling entrepreneur registration and provision of legal status to new ventures under simplified two-year regime. The dedicated financing fund was established within Ministry of Economy and Finance structure, configured to receive government appropriations and provide financing to registered ventures. The Ministry assumed administrative responsibility for National Registry operation, National Fund administration and financing project approval, National Entrepreneurship Network coordination, training program development and delivery, and sector-specific regulatory guidance issuance.​

Amendment and Refinement (September 2024): The law underwent amendment and refinement published in Official Gazette No. 6,842 on September 16, 2024. The specific amendments are not extensively detailed in available sources, but represent government effort to refine implementation based on operational experience and emerging policy considerations.​

What impact has been measured?

According to Global Entrepreneurship Monitor (GEM) 2024/2025 report, approximately 1.4 million entrepreneurs have registered ventures in National Registry of Entrepreneurship since the law's October 2021 publication (as of 2024/2025).

What lessons can be learned?
  • Uncertain Venture Sustainability and Long-Term Performance: While registration scale is documented (1.4 million ventures), available sources do not systematically track venture survival rates beyond initial registration, business performance, employment generation per venture, or economic value creation. Absence of published data on venture sustainability, formalization transition to Commercial Registry after two-year validity period, or comparative performance metrics prevents rigorous assessment of program impact versus registration numbers alone.​
  • Necessity-Driven Entrepreneurship Limits Economic Impact Potential: Research indicates many Venezuelan entrepreneurs enter business from economic necessity rather than opportunity, reflecting underlying macroeconomic pressures overwhelming entrepreneurship policy benefits. Necessity-driven entrepreneurship may produce lower-quality ventures focused on basic subsistence survival rather than growth-oriented expansion and employment generation, limiting aggregate economic impact compared to opportunity-driven entrepreneurship culture.​
  • Macroeconomic Constraints Fundamentally Shape Policy Effectiveness: Venezuela's continued economic instability (currency volatility, inflation, foreign exchange constraints) significantly limits law effectiveness despite sound policy design. These macroeconomic pressures may constrain venture growth potential, financing availability, and sustained operations regardless of supportive entrepreneurship framework.​
  • Temporary Legal Status Creates Transition Uncertainty: While two-year National Registry status provides bridge to Commercial Registry, uncertainty exists regarding entrepreneur ability to successfully navigate permanent registration transition. Law establishes requirement that ventures register with Commercial Registry after two years but does not clarify what percentage of ventures actually complete transition, what barriers entrepreneurs encounter, or what support government provides facilitating transition process.​
  • Insufficient Data for Evaluating Program Effectiveness: No published comprehensive impact evaluation exists systematically assessing law effectiveness. Specific metrics lacking include venture survival rates, employment quality, revenue/profitability performance, business formalization spillover effects, and comparative performance against pre-law entrepreneurship patterns. This evaluation gap prevents evidence-based policy refinement.​
  • National Fund for Entrepreneurship Capacity Constraints: While law establishes Fund with financing mandate, Venezuela's macroeconomic constraints likely limit Fund capitalization from government budget sources. Limited financing capacity means only fraction of 1.4 million registered ventures access Fund financing, potentially concentrating among better-connected ventures at expense of truly marginal entrepreneurs.​
  • Insufficient Complementary Reforms: Law provides registration and basic support services but limited evidence suggests complementary reforms addressing regulatory environment, bankruptcy law modernization, and labor market incentives receive adequate attention. These complementary initiatives could substantially amplify program benefits through enhanced SME market access and competitive positioning.​
  • Geographic and Demographic Reach Limitations: While law supports entrepreneurs nationally, infrastructure for National Entrepreneurship Network, training programs, and financing access likely concentrates in major urban centers with limited coverage in peripheral regions. Demographic reach may be constrained by awareness gaps and limited accessibility for less-connected entrepreneur segments.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom