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Corporate Compliance

Venezuela: The Securities Authority authorized the public offering of investment units of the first collective investment entity specialized in the real estate sector

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In brief

The Office of the National Superintendent of Securities (SUNAVAL) authorized the issuance of a minimum of 20 million investment units and a maximum of 40 million with a nominal value of VEF 100 and with a minimum investment amount of VEF 100,000 of the first collective investment entity specialized in the real estate sector, called Fibra One, which is promoted by Fintech Valores Sociedad de Corretaje.1

Collective investment entities are regulated by the Collective Investment Entities Law2 and the Securities Market Law3, and are defined as those institutions that channel the contributions of investors destined to constitute a capital or common equity, made up of a portfolio of securities or other assets. Investment units are the different types of securities issued by collective investment entities, such as shares, quotas, participations or other instruments that confer rights to investors regarding the ownership and returns of capital or assets of the respective entity in proportion to their investments (article two, Collective Investment Entities Law).

Collective investment entities must comply with certain requirements for their operation (article 12, Collective Investment Entities Law) and must be incorporated through a public offering (article 14, Collective Investment Entities Law). According to their specific nature, they may invest in any movable or real estate property, including, but not limited to, securities or other rights issued by legal entities, public or private, in local or foreign currency, located abroad or in the country. Likewise, collective investment entities may invest in risk capital (article five, Collective Investment Entities Law). 

According to the authorization of SUNAVAL, the funds received from the issuance of investment units will be invested in real estate assets, boosting the construction and real estate sectors.

With this issuance, collective investment entities reappear as financing vehicles promoted by stock market operators, which represents a new business opportunity for the real estate and capital market sectors. 

Click here to read the alert in Spanish.

1 Read further here and here.

2 Collective Investment Entities Law published in the Official Gazette No. 36,027 of 22 August of 1996.

3 Securities Market Law published in the Official Gazette No. 6,211 of 30 December of 2015.

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Author

Jesús Dávila joined Baker McKenzie in 2002 and became partner in 2009. He is recognized as a leading lawyer in Venezuela by Chambers Latin America and IFLR1000. Jesus advises domestic and multinational companies on the full scope of corporate transactions, including mergers, acquisitions, takeovers, joint ventures and a variety of other corporate work. He has a strong track record providing insightful advice to companies on matters of antitrust, foreign investment and technology transfer, IT/Communications, and trade and commerce. Jesus has been a professor in various renowned universities in Venezuela.

Author

Maria Celis joined the Firm in 1997 and became partner in 2008. She has 20 years of experience working in corporate, mergers and acquisitions, joint ventures, telecommunication, real estate and anti-trust matters, and works with important national and international companies on corporate reorganization and M&A matters. She heads the Venezuela office Diversity & Inclusion committee and she was awarded as a highly commended lawyer in the category “Gender Diversity Lawyer of the Year Venezuela” by Chambers and Partners in the Latin America Awards 2019. In addition, she is member of the Sustainability committee of the Venezuela office and represents Venezuela in the Real Estate and M&A Latin America Steering Committees.

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