Bolivia has lately wanted to increase its attractiveness as a country full of new opportunities for anyone looking to do business or buy a local firm, so it is showing interest in foreign investment and partnerships in strategic sectors such as hydrocarbons, and mining, natural resources, transport, and communications.
Business in Bolivia
Bolivia’s foreign direct investment jumped to $ 725 million, more than double the level of the previous year. The recovery is being driven by increased investment in marketing, transport, ICT, and mergers and acquisitions in the country’s mining sector.
According to the UNCTAD World Investment Report, FDI in Bolivia reached $ 12 billion. This indicates the growing interest in the country at the global level.
As more businesses open in Latin America and entrepreneurs have a global impact on growth. More and more Western companies are preferring markets such as Bolivia. As part of their international expansion plans.
Bolivia is not the largest or most prosperous country in the region. But it has a strong export market. And a series of lucrative free trade agreements that offer businesses access to different Latin American countries. With higher demand and GDP.
As an entrepreneur, investing in Bolivia is better done sooner rather than later so that it pays dividends. A huge inflow of foreign direct investment should be directed towards expanding the market and meeting demand.
It is in your best interest to identify opportunities and gaps in the market and expand your business as soon as possible. With many opportunities in the Andes region to consider when expanding.
Bolivia company forms
The most common types of businesses in Bolivia are Sociedad de Responsabilidad Limitada (SRL) and Sociedad Anonima (SA).
SA is a type of organization that requires a minimum of 3 shareholders who are liable in proportion to their share of their shares. Run by an interim president, who may or may not be a shareholder.
SRL is an organization consisting of at least 3, but not more than 25 partners, who are responsible for the company’s obligations in proportion to the number of their contributions.
Steps to register a company in Bolivia
- Choice of the name. To open a business in Bolivia, you need to choose a name for your company and then check its uniqueness in the Commercial Register.
- Notarization of constituent documents in the Commercial Register.
- Publication of the announcement of the registration of a new company in a local Bolivian newspaper.
- To obtain a tax identification number, you need to register with the National Revenue Service.
- Obtaining a municipal license, as well as a registration card. Required documents: application form, copy of the public registration certificate, a document confirming the location of your company, etc.
- Deposit capital (at least 25%) to a Commercial Bank to obtain a certificate.
- Register the certificate in the Commercial Register.
Taxation of a company in Bolivia
Bolivia taxes corporate income on a “source of income” basis (ie geographically). Thus, income from goods and assets located or used for economic purposes in Bolivia, as well as from any activity carried out within the country, is considered a source of income in Bolivia.
- The general CIT rate is 25% (except for mining and financial institutions, which are subject to an additional income tax rate)
- Dividends paid to Bolivian residents, individuals, or legal entities, are not taxed. Dividend payments, distribution of profits to the head office by Bolivian branches, interest payments, royalties, and fees paid for any type of service provided to non-residents are taxed at 12.5%.
- Interest is subject to annual CIT if the loan was used in Bolivia
- Rental income/royalty income is subordinate to an annual CIT if income comes from an asset placed or economically used in Bolivia.
- Foreign corporation income is taxed only on income earned in Bolivia.