How sophisticated investors are structuring their rightful entry into Latin America's most undervalued market.

By Alan Aldana, Managing Partner.

Executive summary

Venezuela has the world's largest proven oil reserves, a reformed Organic Hydrocarbons Law to attract private capital, and the first General License issued by the United States since 2023 authorizing oil and gas transactions with Venezuelan counterparties. For the first time in over a decade, the legal architecture is in place for institutional investors, private equity funds and energy companies to deploy capital in Venezuelan assets within a structured and sanctions-compliant framework.

However, it is not an open market. It is a conditioned opening, governed by two overlapping legal perimeters: Venezuelan domestic law and U.S. sanctions regulations. Investors who fail to navigate both frameworks simultaneously expose themselves to enforcement actions by OFAC, contractual nullity or stagnation of their capital.

This article explains why having a reliable local legal partner, with experience in international sanctions, is not merely advisable, but operationally indispensable for any fund or corporation aspiring to enter Venezuela in 2026.

The macro case: why Venezuela and why now?

A market that is re-entering the global arena

After years of economic isolation, Venezuela is undergoing a structural transformation. The convergence of three regulatory developments has reopened the country to sophisticated international capital:

1. The Reform of the Organic Law of Hydrocarbons (January 2026) - The National Assembly approved a partial reform that, for the first time, allows private companies domiciled in the country to operate primary hydrocarbon activities through contracts with state-owned entities. The reform introduces comprehensive management models at the operator's risk and cost, flexible fiscal conditions adjustable by project, and alternative dispute resolution mechanisms, including arbitration.

2. OFAC General License No. 46 (January 29, 2026) - The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) issued GL 46, authorizing established U.S. entities to engage in the full spectrum of Venezuelan-origin petroleum operations: lifting, export, sale, storage, transportation, refining and associated logistics, including chartering, marine insurance, P&I coverage and port services.

3. Executive Order 14373 - It establishes a custodial payment mechanism through the Foreign Government Deposit Funds administered by the U.S. Treasury, ensuring that monetary flows from oil transactions with blocked persons are channeled through a supervised financial infrastructure.

The valuation opportunity

Over 70 % of the Venezuelan economy currently operates in US dollars. Companies in the insurance, industrial, financial and energy sectors generate hard currency revenues, maintain operational infrastructure and own productive assets; however, their valuations remain deeply discounted, reflecting historical country risk rather than current fundamentals.

For private equity funds and institutional allocators familiar with Latin America's post-crisis cycles-Argentina (2002), Ecuador (2008), Colombia's energy reform-Venezuela's profile in 2026 replicates the initial phases of those recovery curves. The asymmetry between enterprise value and entry price is, by any metric, historically significant.

Investors who enter during the initial regulatory opening phase capture the most value. Once the market normalizes, exceptional opportunities disappear.

The double legal perimeter: understanding real risk

First perimeter: Venezuelan domestic law

The reform of the Hydrocarbons Law does not eliminate the constitutional restrictions. The Venezuelan Constitution (Articles 12, 150-151, 302-303) preserves state sovereignty over subsoil resources, the inalienability of hydrocarbon deposits and the requirement of parliamentary approval for contracts of national public interest involving foreign entities.

In practical terms, the investment vehicle must be properly domiciled in Venezuela, the contractual architecture must respect constitutional limits and the governance structures must anticipate regulatory changes, asset reversion scenarios and orderly exit mechanisms. The reform introduces an economic-financial equilibrium clause which, properly drafted, functions as a stabilization mechanism; however, its enforceability depends entirely on the quality of the contract.

Second perimeter: U.S. sanctions and extraterritorial controls

GL 46 is not an unrestricted general authorization. It imposes a precise extraterritorial framework with non-derogable conditions:

Subjective eligibility: only “established U.S. entities” incorporated on or before January 29, 2025 are covered. Newly formed special purpose vehicles (SPVs) do not qualify.

Contractual jurisdiction: any contract with the Government of Venezuela, PDVSA or PDVSA-affiliated entities must be governed by U.S. law and subject to the jurisdiction of U.S. courts for the resolution of disputes.

Payment mechanism: all monetary payments to blocked persons must be channeled through the Foreign Government Deposit Funds of the U.S. Treasury, pursuant to Executive Order 14373.

Geopolitical exclusions: transactions involving entities located in, incorporated under the laws of, or controlled by persons located in Russia, Iran, North Korea, Cuba or - in certain structures - the People's Republic of China are expressly prohibited.

Prohibition of Blocked Vessels: no transaction may involve a vessel designated as blocked property under the Venezuela Sanctions Regulations (31 CFR Part 591).

Reporting obligations: exports to non-U.S. destinations trigger a detailed reporting regime to the Department of State and the Department of Energy, with an initial 10-day reporting period of 90 days, which must include parts, volumes, values, final destination and any taxes or payments to the Venezuelan Government.

A project may be fully compliant with Venezuelan law but unfeasible under GL 46, or structurable under OFAC but legally vulnerable in Venezuela. Real legal certainty only exists when both perimeters are satisfied simultaneously.

Why a local ally is not optional, but structural

The complexity of this dual perimeter environment means that international investors cannot rely exclusively on legal advisors in the US or the UK. The Venezuelan side of any transaction requires:

1. Field due diligence capability

Reconstructing real dollar EBITDA in a hyperinflationary accounting environment, verifying chains of title and ownership, identifying hidden labor liabilities under the LOTTT, detecting informal dollar-denominated compensation that courts may recharacterize as salary: these are not desk jobs. They require advice with direct access to local records, courts, regulators and business networks.

2. Structuring in accordance with sanctions at source

The OFAC compliance framework is not exhausted by filtering the SDN list. GL 46 exclusions target location, law of incorporation, chains of control and joint venture relationships. This requires a much higher standard of due diligence than ordinary KYC, including enhanced beneficial ownership identification, representations and warranties, and termination clauses triggered by sanctions exposure. A local partner with OFAC certification and sanctions expertise is essential to design compliant structures from conception, rather than adapting them after an enforcement action.

Regulatory navigation and institutional interlocution

Structuring investments in Venezuela requires interaction with SIEX (foreign investment registry), SENIAT (tax administration), the Ministry of Hydrocarbons and, potentially, PDVSA and its subsidiaries. Navigating these institutions, understanding their administrative practices and obtaining the necessary registrations and approvals to protect investor rights under the Constitutional Law of Productive Foreign Investment (2017) and the reformed Hydrocarbons Law requires a firm with established institutional relationships and a proven track record.

4. Criminal Compliance and Reputational Shielding

For any fund or corporation operating in a sanctioned jurisdiction, the risk is not just regulatory: it is reputational and criminal. Anti-corruption protocols, anti-money laundering prevention programs, politically exposed person (PEP) screening and vessel tracking procedures must be integrated into every operation from day one. In the face of an investigation by the authorities, the quality of the compliance program and the documented role of specialized legal counsel become the investor's main defense.

Sectors where capital is being deployed

Oil and gas

GL 46 covers the entire upstream and downstream chain.. Private operators can now manage and market Venezuelan-origin crude oil directly, without the need for mandatory association with PDVSA for exports. The new integrated hydrocarbon tax is capped at 15 % on gross revenues, with exemptions from Wealth Tax, LOCTI, LOD and LODAFEF.

Mining and metals

CVG-managed assets in gold, aluminum, iron and bauxite are entering a concession reform cycle. Privatization of Minerven (gold mining) is underway, and Venezuela has significant reserves of rare earths and strategic minerals. ESG structuring is critical to access international financing.

Financial services and insurance

Insurance companies represent particularly attractive acquisition targets: recurring hard currency revenue streams, consolidated distribution networks and valuations representing a fraction of regional comparables. The financial sector is consolidating, generating acquisition opportunities for well-capitalized players.

Infrastructure and industrial assets

Venezuela's power grid, ports, roads and telecommunications are severely underfunded. The government is actively pursuing BOT and BOOT structures, as well as public-private partnership frameworks. Industrial import substitution opportunities are emerging as domestic demand recovers.

VENFORT: your reliable legal partner in the field

VENFORT Abogados is a cross-border law firm with offices in Madrid and Caracas, led by Alan Aldana, a criminal and international lawyer with more than 20 years of experience in Venezuela and Spain. The firm is accredited before the International Criminal Court and maintains an active litigation and advisory practice in economic criminal law, international sanctions, extraditions and INTERPOL proceedings.

For international investors, VENFORT's Venezuela Investment Desk offers:

Comprehensive legal adviceFrom opportunity identification and target screening to due diligence, deal structuring, negotiation, closing and post-investment compliance.

Sanction compliance architectureGL 46 eligibility analysis, OFAC screening protocols, enhanced due diligence on beneficial ownership and joint venture structures, and support for the 90-day reporting regime.

Financial due diligence supportThe following are some of the main elements of the Company's financial analysis: reconstruction of EBITDA in dollars, inflation-adjusted financial analysis, evaluation of tax contingencies and working capital analysis under hyperinflationary accounting standards (VEN-NIF/NIC 29).

Criminal compliance programsAnti-corruption protocols, anti-money laundering frameworks, PEP screening and reputational shielding specifically designed for operations in sanctioned jurisdictions.

Governmental and institutional dialogueThe following services are provided by PDVSA: registration with SIEX, coordination with SENIAT, management before the Ministry of Hydrocarbons and negotiation of contracts with PDVSA's entities.

Of Counsel NetworkVenezuelan senior legal experience in energy, regulatory, corporate and tax law, including Pedro Baute (former corporate manager of Major Projects of PDVSA's Legal Consultancy) and consultants with extensive experience in regulatory compliance, negotiation and dispute resolution in Latin America.

Our credentials

VENFORT represents law firms and institutional clients in 15 jurisdictions, including the United Kingdom, the United States, France, Belgium, Portugal, Andorra, Singapore, Dubai, Colombia, Panama and the Dominican Republic. Alan Aldana is certified in sanctions OFAC granted by the Florida International Bankers Association and Florida International University, and serves as Director of the Venezuelan Committee of the World Compliance Association.

The firm's track record includes defense in high-profile international matters, including the Panama Papers investigations, the 2009 financial crisis and the Odebrecht case in 2023.

Conclusion: invest with precision, not with hope.

Venezuela in 2026 is not a speculative bet. It is a jurisdiction in which verifiable legal reform and U.S. regulatory authorization have created a structured channel for institutional capital. But that channel is narrow, conditioned and governed by two overlapping legal systems that require simultaneous compliance.

The difference between a protected investment and a stranded investment lies in the quality of the legal architecture. The difference between a compliant market entry and an exposure to enforcement actions lies in the caliber of your local counsel.

Investing in Venezuela is possible. Doing it right is a legal decision.

CONTACT

Alan Aldana  | Managing Partner.

VENFORT Abogados - Venezuela Investment Desk

Paseo de la Castellana 93, 2nd Floor, Office 242, Madrid 28046, Spain

Luis Roche de Altamira Ave. #16, Caracas, Venezuela

www.venfort.com

This document has been prepared by VENFORT Abogados for information purposes only.
It does not constitute legal or financial advice. © 2026 VENFORT.