Venezuela is in the grip of the greatest economic downturn in its history. Caracas has recently reduced several economic constraints in an attempt to mitigate the impact of the ongoing economic crisis, such as permitting increased supplies of foreign currency and allowing individual citizens and businesses greater import flexibility. M&A activity soared in 2021 as a result of the dollarisation, the unrestricted volatility of the exchange rate and the removal of pricing regulations. As a consequence, GDP is expected to grow by 8.3% in 2022, expanding at its fastest pace in 15 years; this is also due to a very low base effect and the boost to activity provided by rising remittances and increased oil production.

Oil output has begun to climb since the second half of 2020, owing mostly to stronger trade links between the regime of President Nicolás Maduro and China, Russia, Iran and the illicit oil trade. Falling – though still galloping – inflation, along with some limited economic liberalisation, should also benefit the economy in the near future.

On the political front, the evolution of US financial and sectoral sanctions targeting the Venezuelan government and oil industry is an important issue to monitor. In March 2022, the first high-level bilateral talks in years were held between US and Venezuelan officials on the possibility of easing oil sanctions, but little progress was made towards a deal.

Part of the Venezuelan response to the US sanctions was the introduction and promotion of the petro (PTR) cryptocurrency, the value of which is linked to the country’s mining resources, especially its oil reserves. The Venezuelan government is expected to remain interested in the growth of the local cryptocurrency industry.

In the legal market, Lega and D’Empaire are leading full-service domestic firms. Other well-established local firms include Araquereyna, Altum Abogados, S.C., Mendoza Palacios Acedo Borjas Páez Pumar & Cía, Torres, Plaz & Araujo and Rodríguez & Mendoza, among others. Dentons and Baker & McKenzie, S.C. are the key international firms in the market, while InterJuris Abogados, which operates from offices in Caracas, Madrid, Miami, is also active.