Venezuelan migrants contribute billions of dollars to Latin America, but continue to work in the informal sector

Irvin Ibarra left Venezuela 10 years ago with nothing but the clothes on her back and a trade she couldn’t practice. In Colombia, she started selling coffee on the street and today she runs a dance school in a working-class neighborhood of Bogotá. Her story is one among hundreds of thousands that make up a diaspora of more than 7.9 million Venezuelans, one of the largest in the world. Most have settled in Latin America and, beyond the social challenges their arrival has posed, they have become a driving force in the economies that welcomed them: the 6.9 million Venezuelans living in the region have generated at least $10.6 billion in revenue, according to the latest report from the International Organization for Migration (IOM), released Thursday.

“The countries of Latin America and the Caribbean have proven that migration is a source of economic growth, as well as creativity and dynamism,” said Maria Moita, IOM Regional Director for Latin America and the Caribbean. “The findings of this study clearly show that when governments expand opportunities for migrants through regularization and integration processes, all of society benefits.”

The report focuses on Venezuelans because they represent the “largest migration flow in contemporary history and the largest foreign community in host countries,” explained Julio Croci, IOM policy and liaison officer, during the data presentation. The analysis is based on research conducted since 2021 in Colombia, Panama, Ecuador, Chile, Costa Rica, the Dominican Republic, Peru, and Aruba, countries that are home to some 5.7 million of the Venezuelan migrants living in the region.

According to the study, Venezuelans contribute an average of about 3% of total tax revenue in the countries analyzed. In Colombia alone, where nearly three million Venezuelans live, this contribution has exceeded $529 million.

In Peru, the tax contribution of its 1.6 million Venezuelan migrants reached almost $527 million in 2024, equivalent to 1.35% of total tax revenue or 0.23% of national GDP. The estimated consumption of this population amounts to $2.4 billion. However, Peru faces one of the largest opportunity gaps due to the so-called “skills degradation”: less than 10% of Venezuelan professionals are working in their fields because of obstacles to credential validation and formalization. If these obstacles were overcome, the IOM estimates that tax revenue could increase by 51.3%, reaching $797.7 million.

In Chile, Venezuelans represent 8.2% of the population and their contribution accounts for 10% of the country’s economy. They have also contributed a young workforce to an aging society. The impact, according to the IOM, could be even greater if the regularization rate, which currently stands at only 24.8%, were to increase. Even so, President-elect José Antonio Kast has proposed creating a “corridor” to return migrants to their countries of origin.

This drive is also reflected in entrepreneurship. Venezuelan migrants have created small, medium, and large businesses, especially in the food, beverage, gastronomy, financial services, and technology sectors. In Panama, Venezuelan-led companies have generated nearly 40,000 jobs in the last decade. In Aruba, this community has driven investments in tourism and hospitality exceeding $1.1 billion, and in the Dominican Republic, they reach $550 million.

Regularization and informality

Despite these advances, integration remains uneven. At least 5.1 million Venezuelans (68%) have regularized their status in their host countries, either through residence or work permits, refugee status, or pending asylum applications. Even so, more than 30% live without legal status, with significant differences between countries.

In Peru, Colombia, and Costa Rica, over 60% of the Venezuelan population has legal status, while in Chile, Aruba, and Ecuador, the proportion is less than 30%. In Colombia, home to nearly three million Venezuelans, 65.8% have legal status, compared to 80.8% of the 1.6 million Venezuelans in Peru.

One of the main obstacles is the cost and complexity of validating documentation from the country of origin, exacerbated by the closure of Venezuelan consulates after the severing of diplomatic relations. “Some families choose to regularize only one of their members because the costs can reach $3,000 per person. Some countries accept expired documents, and others do not. That’s why regularization is the first step in the integration process,” explains Croci.

The contribution could be even greater. It is estimated that 82% of Venezuelans in the region work in the informal sector and that 41% lack access to formal financial services, even though most had access before emigrating. “This is the most highly educated migrant group, with a very high percentage of professionals, but the vast majority have not been able to validate their qualifications and are underemployed or working in the informal sector,” notes the IOM. These barriers, the organization warns, limit their economic autonomy, the growth of their businesses, and their capacity to contribute more to local development.

Irvin Ibarra’s story encapsulates that journey. Now 59, she emigrated to Colombia due to food shortages in Venezuela, where she worked as a teacher and soccer coach. Her husband left first, followed by her. Eventually, she reunited with her children, who had ended up in Chile. In Colombia, she started by selling coffee on the street with two borrowed thermos flasks, and faced difficulties in getting her academic credentials recognized. Today, she runs The Royal Family, a dance school in the Ciudad Bolívar neighborhood of Bogotá, where she teaches vulnerable children, including other migrants like herself. “It wasn’t easy arriving and having to work on the street, but I did it because I needed to support myself and send money to my children,” she told the IOM. “I’m not from here, I’m Venezuelan, but I’m proud to be Venezuelan and to help make this [her school] happen.”

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