Embarking on the process of company formation in Bolivia is the first step in expanding your business presence in the country. While Bolivia can be overshadowed by its larger neighboring economies, it is emerging as an attractive destination for foreign investors looking to tap into new markets.
Bolivia is a member of the World Trade Organization and the Andean Community and an associate member of MERCOSUR. In recent years, trade in Bolivia has experienced substantial growth, thanks to the establishment of double taxation avoidance agreements with the United Kingdom, Germany, and various South American countries.
This article will explain company formation in Bolivia and how to successfully incorporate your business into this untapped market full of investment opportunities.
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Incorporating / Forming a company in Bolivia
Before entering the Bolivian market, we recommend spending some time in the country gathering information on the level of demand for your products.
Engage with local business leaders and potential customers, and spread the word about your new venture by attending trade fairs and networking events. Acquire data on your industry’s performance and assess key players.
Entering a crowded market with slow growth and low incomes in a landlocked area can be challenging.
Get a Bolivian visa with your legal entity
Foreign executives planning to register a company in Bolivia can apply for a business visa. Applying for a visa can take a couple of weeks, but it offers investors permanent residence after two years of living in the country. After residing continuously in the country for three years, citizenship becomes accessible.
Those citizens who are part of the Andean Community or MERCOSUR do not need to apply for a visa if they are visiting Bolivia to assess demand or to meet a contact as long as they stay for less than 90 days.
Business Formation: Decide on the Legal Entity Type
After deciding to start the company formation in Bolivia process, the first step involves selecting the best type of legal entity to suit your business needs and goals. The most common types of legal entities are outlined below:
- Limited Liability Company (Sociedad de responsabilidad limitada, SRL): This is the most simplified legal structure and the most common for most business activities. It requires a legal representative to be appointed within the company bylaws, a fiscal address, a minimum of two shareholders, and a USD$500 minimum capital.
- Corporation (Sociedad Anonima): Suitable for medium and large-sized companies. Corporations require three directors (one must be a resident of Bolivia) and three shareholders, who can be foreign or local legal or physical persons. Incorporating a Corporation also requires a Síndico (controller), an auditor, and a fiscal address. Companies that generate over US$160,000 must submit annual financial statements to the Tax Authority and SEPREC.
- Branch (Sucursal): Setting up a branch office in Bolivia grants your foreign parent company the opportunity for full ownership, with 100% participation. To initiate this process, you need to officially register the branch office in Bolivia and designate a Legal Representative who must be a resident of Bolivia and have a local fiscal address.
What are the minimum requirements to incorporate an SRL in Bolivia?
The minimum requirements to incorporate an SRL in Bolivia are:
- Minimum of (2) shareholders, which can be either natural (i.e. persons) or legal persons (i.e. entities.)
- Contribute a minimum initial capital of USD 500. – Important Note: Based on our experience, we would always recommend a minimum initial capital of USD 1500 to ensure an efficient bank opening process.
- Appoint a Legal Representative within the company bylaws, who must be a local national or a foreigner with the right to live and work in the country; normally this is a lawyer, the founder, or a senior executive within the company.
- Register a Fiscal Address which must be within the country and used for official correspondence.
Important Tip: The founding shareholders do not need to physically travel to the country as the establishment can be completed via a power of attorney
What documents do you need to start your company formation in Bolivia?
To begin incorporating your new subsidiary company in Bolivia, you will need to provide the following:
- A name for your legal entity.
- Shareholders’ identification documents.
- Confirm the business activities, corporate purpose, and primary operations.
- Minimum initial capital contribution.
- Company duration can vary from 1 to 99 years, with the possibility of renewal.
Important Tip: We always recommend having a preferred legal name and two alternatives in case the primary legal name is unavailable.
Register your Company / Legal Entity in Bolivia
Company formation in Bolivia can take 5 to 6 weeks after all required documentation is provided. Businesses must have a physical office, so before you start, you must purchase or rent office space in the country.
To successfully incorporate a limited liability company in the country, you’ll need at least two shareholders and one legal representative who must be a Bolivian or a foreign residing in Bolivia.
Bolivia does not require you to travel to the country to complete the incorporation process. This means you can set up from anywhere and begin to recruit staff, saving you time and money. CEOs and investors who want to expand into multiple markets quickly will find this particularly attractive.
Since Bolivia is near other Latin American markets like Peru, Chile, Paraguay, and Brazil, company formation in Bolivia allows you to reach various nearby markets for trade. It is easy to travel between the four countries by road or air. Once you have incorporated your company, you can apply for a corporate business account and begin trading freely in the market.
The key steps in the Entity Incorporation Process are the following:
- Step 1 – Gather Client Information Documents
- Step 2 – Prepare the Powers of Attorney (POAs) for each shareholder
- Step 3 – Apostille, receive documentation and translate (for foreign shareholders)
- Step 4 – Notarize all the documents
- Step 5 – Register the company in Bolivia
- Step 6 – Secure the tax ID Número de Identificación Tributaria (NIT) from the Tax ID Authority (Servicio de Impuestos Nacionales ) and register the company fiscal address
- Step 7 – Open the company bank account
Common FAQs when Forming a Company in Bolivia
Answers to some of the most common questions we get asked by our clients.
Yes, a business in Bolivia can be 100% foreign-owned by either legal persons (“legal entities”) or natural persons (“individuals.”)
It can take 5 to 6 weeks after the required documentation has been provided by the client.
The S.A. in a company name in Bolivia refers to a “Sociedad Anónima,” which translates to a “Joint Stock Company.” This legal framework sets up the company as an entity distinct from its shareholders, each holding shares that symbolize ownership. Shareholders’ liability is limited to the value of their shares, creating a layer of protection. The S.A. structure is widely used across Bolivia for its remarkable adaptability and flexibility, making it the preferred choice for various business endeavors.
An SRL company name in Bolivia stands for “Sociedad de Responsabilidad Limitada,” which translates to Limited Liability Company in English. This legal entity operates independently from its shareholders, offering them limited liability. SRL companies are prevalent due to their simplified requirements, making them a popular choice for business structures. The SRL structure is widely used across Bolivia making it the preferred choice for various types of business endeavors.
The Sociedad de Responsabilidad Limitada (S.R.L.) is the limited liability entity type.
A. Shareholders: An S.R.L. can have a minimum of 2 and a maximum of 25 shareholders, while in an S.A., the minimum is 3, and the maximum is unlimited.
B. Shareholders Meeting: In an S.R.L., the shareholders meeting is called the “Asamblea de Socios,” which holds the highest authority and makes decisions. On the other hand, in an S.A., the shareholders meeting, known as the “Junta de Accionistas,” holds the highest authority and makes decisions.
C. Duration: In both S.R.L. and S.A., the duration can be up to 99 years (renewable).
D. Capital: In the S.R.L., the capital is subscribed, while in the S.A., the capital is subscribed, paid, and authorized.
E. Legal Representation: For the S.R.L., 1 legal representative is required (adding more is optional), while in the case of an S.A., there is a Board of Directors (minimum 3, maximum 12).
F. Transfer of Shares: In the S.R.L., a shareholders meeting is required for the transfer of shares, whereas in the case of an S.A., there is a free transfer of shares.
Work with Biz Latin Hub to Incorporate your Company in Bolivia
At Biz Latin Hub, our team of legal and accounting multilingual specialists is equipped to deliver excellence and provide services designed for international executives looking to expand into Latin America. We offer complete bilingual support for entering the market and handling administrative tasks.
Choose us as your leading contact for starting a company in Bolivia and guarantee the success of your business activities. Contact us now, and we’ll get back to you with a personalized strategy to unlock new commercial opportunities for your company in Bolivia. Learn more about our team and expert authors.