Investors rush to explore Venezuela’s economic opening — but big bets remain elusive

In recent weeks, dozens of investors have been flying into Caracas for a series of closed-door meetings as part of a growing effort to assess business opportunities in a country long considered off-limits.

The visitors include hedge fund managers, corporate executives and advisers from the United States, Latin America and beyond — many drawn by what they see as a rare chance to enter Venezuela at the early stages of a potential economic reopening.

“For this trip, we had so much interest that we had to turn it into a conference on the ground,” said Charles Myers, founder of the advisory firm Signum Global Advisors, who led a recent delegation of 55 participants.

“Things are moving at light speed for foreign investors,” he added. “The government is pushing through significant reforms. Most people, including myself, walked away even more optimistic [about] the future.”

Other advisory firms have made similar trips in recent weeks.

Wendy Polanco, who covers Latin America for Transnational Research, recently traveled to Caracas with a small group of institutional investors to assess conditions on the ground.

“The purpose of our trip was to get a feel for the mood,” she said. “How people are interpreting all of these changes.”

Polanco said the group found a city that felt calmer and more stable than expected.

“We felt relatively safe … people seemed hopeful, optimistic,” she said. At the same time, she added, the capital has few visible signs of an economic boom. “It was probably quieter than I expected — not bustling yet.”

The renewed attention follows a series of rapid changes since the removal of former President Nicolás Maduro. Venezuelan authorities have begun rewriting laws to allow private investment in sectors that were once tightly controlled by the state, including oil and mining.

At the same time, Washington has restored diplomatic ties with Caracas and is allowing some investors to operate, despite ongoing sanctions.

Direct flights between the United States and Venezuela — suspended since 2019 — have resumed, the first taking place on Thursday, with strong demand pushing ticket prices above $1,500 for just a two-hour journey.

Together, these moves have fueled optimism for some investors. But the first to move in are not the largest multinational firms, according to Elias Ferrer, founder of Orinoco Research, a risk advisory firm.

Instead, he said, early interest is coming from smaller, high-risk investors — many from emerging markets.

“We have a lot of investors that we call wildcatters,” Ferrer said, referring to those willing to take big risks for potentially high returns. “Colombians, Brazilians, Turkish and Indian investors — they’re the ones moving faster.”

Large Western companies, particularly in the energy sector, are taking a more cautious approach, Ferrer said. “Firms such as ExxonMobil and ConocoPhillips have sent technical teams to assess opportunities, but have yet to commit significant capital.”

“For now, they’re in wait-and-see mode,” he added.

Part of the hesitation reflects uncertainty about how Venezuela’s new policies will function in practice. Although the government has changed its laws to attract foreign investment, details remain unclear, and implementation has yet to be tested.

That uncertainty extends beyond regulation.

After more than a decade of economic collapse — during which the economy shrank by over 80% — Venezuela faces deep structural challenges.

“The country remains in default on its debt, cut off from international credit markets and struggling with triple-digit inflation, the highest in the world,” economist Omar Zambrano said. “It is very difficult to achieve sustained recovery under those conditions.”

There are tentative signs of progress. The International Monetary Fund is reengaging with Venezuela for the first time since 2019, a step that could eventually open the door to financial support. But that process is still in its early stages.

For some analysts, the more fundamental obstacle is political.

Ricardo Hausmann, a Harvard professor and former Venezuelan finance minister, argues that the scale of investment needed — potentially hundreds of billions of dollars — depends on credible institutions and clear legal frameworks.

“I want to emphasize that democratic rule, constitutional rule, is a prerequisite for economic recovery,” Hausmann said. “Every borrowing … has to be signed by a credible national assembly that can approve those agreements,” he said.

Questions remain about the current government’s legitimacy. The 2024 presidential election was widely disputed, with opposition leaders and independent observers alleging fraud and authorities failing to publish detailed vote results.

Delcy Rodríguez is currently serving as acting president after Maduro’s removal. Under Venezuela’s constitution, a presidential vacancy typically requires new elections within 30 days — but no vote has been called, and the timeline remains unclear.

While some opposition figures have been released, others remain in exile, including opposition leader María Corina Machado, with no clear path for their return.

The electoral system itself is unchanged — the same one that declared Maduro the winner without publishing detailed results.

Connections to the political opposition can still pose risks for businesses. In February, oil consultant Evanan Romero, an 86-year-old dual US-Venezuelan citizen, was detained while traveling to Caracas for meetings with international companies. He was held for several days before being released with the help of US diplomacy.

Even so, not all investors see that uncertainty as a barrier.

“Foreign investors don’t need to see a transition to democracy,” Charles Myers of Signum Global Advisors said. “Foreign investors invest in countries around the world, including in the [Persian] Gulf, where there isn’t [widespread] democracy.” He pointed instead to what he described as a potential two-year path toward elections, outlined by US officials.

The question is whether that early interest will translate into real capital — and, ultimately, into tangible improvements for a population that has yet to see the benefits of the country’s tentative reopening.