This can be especially damaging to a Nextel venture because of the possibility of nationalization and the tremendous losses that will accompany it. .
This turmoil has also increased the risk of civil disobedience and property vandalism. Nextel's equipment might come subject to these risks because of the political instability of the country. There have been several coup attempts and many more could follow. The plus side is Venezuela is a broken democracy and is geared toward fixing it. Being the fifth largest exporter of oil and being a member of several international organizations such as the United Nations, World Bank, the World Trade Organization, and the International Monetary Fund, there will probably be intervention before Chavez could establish a dictatorial role. .
Since the 1990's, the Venezuelan government has established laws to promote and protect foreign investment, private property, and foreign transactions. Most sectors of business in Venezuela can be 100% owned, aside from strategic industries, without official approval. They must be registered with the Superintendency of Foreign .
Fischer 3.
Investment SIEX) after being established in the country. All repatriation restrictions have been eliminated. Foreign enterprises may remit royalty payments for technical assistance, trademarks and royalties, to parent companies up to a maximum of five percent of net technological sales. Profits remitted over this percentage have to be approved directly by the SIEX. .
The Venezuelan government has established free trade zones along with several tax incentives for foreign companies doing business in the country. Nextel would probably operate in the Common Paraguana Industrial Zone. This free trade zone offers a five-year tax holiday and exemptions from income tax on interest earned on capital and dividends on securities. Also, many of the domestic incentives are also available to foreign companies.
