Bolivia is one of the South American states that are extremely rich in natural resources, oil and gas in the first turn. Manufacturing and service sectors are steadily developing as well, including with the help of foreign capital. Still, the construction and infrastructure sectors are more prioritized in this context. Taking into account these business opportunities, company incorporation in Sucre or any other location in this jurisdiction may instantly open access to the number of associated benefits.
Arguments in Favor of Investing in Bolivia
Forming a company in Bolivia is a potentially profitable endeavor because of:
- access to substantial regional and world markets;
- ease of business incorporation, remote registration is possible;
- double-tax treaties available;
- no restrictions on foreign capital (100% ownership is acceptable);
- freedom of completing banking transactions in any currency, without limitations.
Legal and Organizational Forms in Bolivia
A foreign investor is entitled to open a company in Bolivia or establish one’s official presence in any alternative form by utilizing these registration options:
- Limited liability company – the most flexible form of doing business in Bolivia that is based on the narrowed liability of its owners over the debts and obligations of this entity, including losses. The promoters (a minimum of two are needed) will not cover such potential losses in excess of the funds invested. The formal capital requirement in the case of LLC is USD 1 at least. One director is needed.
- Branch – an alternative and equally flexible form of doing business in Bolivia that is not associated with high expenditures and obtaining the status of a legal entity. Still, a foreign company will be entitled to do the same business as in its country of origin. This option is more appropriate if a foreign investor wishes to test local business opportunities at the start only. A branch is also good from the point of simplifying the interaction with local contractors. Notably, the 100% responsibility over the results of operation that a branch shows always bears its parent company.
- Representative office – an option that is suitable for investigation and market research without an opportunity to do business in Bolivia. A parent company will finance all the activities of a representative office remaining fully in charge of the results of its operation.
There are also other alternative registration solutions that are foreseen by the Bolivian legislation. These are corporations, limited partnerships, sole proprietorships, etc. Request more detailed information about the legal and organizational forms that interest you.
How to Register a Business in Bolivia?
Any investor can form a company in Bolivia after passing these must-have stages:
- Forming the list of commercial purposes and activities for a future Bolivian company.
- Collecting and formalizing the details about the entity’s promoters, beneficiaries, mother company (if any), and directors.
- Elaborating on and verifying a business name for a company.
- Arranging an official legal address for a future Bolivian enterprise.
- Drafting and executing all corporate documents for a future Bolivian company, including its articles of association and resolutions of promoters.
- Submitting the set of registration documents to the Public Registry of Commerce. Creating a new entry about a company in the case of positive feedback.
- Obtaining a tax ID and registering a company for social security purposes.
- Opening corporate bank accounts.
Legal and Regulatory Landscape
The conditions for doing business are very good in Bolivia, including for non-residents. They enjoy equal treatment as the locals. Business registration procedures are simple and straightforward with no tolerance for corruption. The overall timeframe for company registration in Bolivia is approximately 6-8 weeks. Handling specific types of economic activities will require getting licenses.
Taxation in Bolivia
If you wish to create or buy a company in Bolivia, these tax highlights should be on the table during the consideration as well:
- Profit tax (for enterprises) – 25% (may be more for certain enterprises, like mining, insurance companies, and financial institutions)
- Income tax (for natural persons) – 13%
- Value-added tax – 13%
- Withholding tax (for non-residents) – (1) dividends – 12.5% (2) interests – 12.5% (3) royalties – 12.5%
- Capital gains tax – (1) for enterprises – see profit tax (2) for natural persons – not applicable.
How Prifinance Attorneys Can Assist You
If company registration in Bolivia or buying the existing one has appeared among your business goals now, share your expectations. Prifinance experts will apply their best expertise gained through more than 11 000 projects associated with the registration worldwide at ease. Realize your business goals with the support of professionals.