CARACAS, Feb. 1 (Xinhua) -- Venezuela's Government Gazette has published the new Productive Foreign Investment Law, which aims to promote foreign investment with social responsibility, according to lawmaker Julio Garcia on Thursday.
The law also marks a departure from Venezuela's oil-reliant economic model, Garcia, a member of Venezuela's National Constituent Assembly (ANC), told Xinhua.
It represents "a paradigm shift at a time when the oil rentier state has been exhausted," said Garcia, referring to plummeting oil prices that tanked the Venezuelan economy.
Sitting atop the world's largest oil reserves, Venezuela long thrived on exporting crude, but "now, the tough situation we are in has made us look towards other horizons," said Garcia.
The ANC, charged with drafting a new Constitution, devised the law to "attract productive foreign capital and investment" in a way that will allow the country to "add value to its raw materials, and natural resources and minerals," he said.
"Right now we need productive capital that wants to invest in our country and the Foreign Investment Law creates an entire framework of legal security, of guarantees, of economic stability to generate a significant degree of confidence in international sectors," said the lawmaker.
The law offers "a series of incentives and advantages for investment," including "tax breaks, accelerated amortization, purchase of production by state agencies ... tax rebates, tariff exemptions, subsidies, special credit conditions" and "special percentage rates for, say, remittances or the repatriation of capital," explained Garcia.
However, what truly sets this investment law apart from others, Garcia believes, is that the incentives "must be accompanied ... by a commitment to social responsibility."
Eduardo Pinate, president of the ANC's Economic Commission, highlighted other innovative features of the new law, including that it calls for "progressive" incentives to reward productive investment.
It also recognizes a new category, that of a "national investor with foreign investment," and "stimulates the communal economy," he said.
Pinate also laid to rest fears from some sectors that the new rules may impinge on sovereignty, saying the law "clearly establishes that foreign investment will be subject to the jurisdiction of Venezuelan courts."
While Article 6 of the law makes it "possible to resort to other mechanisms of conflict resolution," that is an option "only after all domestic judicial resources have been exhausted and it has been previously agreed to," said Pinate.
