Financial Regulatory Compliance in Bolivia: a Guide

A map of Bolivia, where your business will need to adhere to financial regulatory compliance to avoid legal inconvenieces.
A map of Bolivia, including some key cities

If you are doing business in the Bolivian market or planning to launch there, you will need to make sure your company meets all aspects of financial regulatory compliance in Bolivia in order to maintain your good standing in the eyes of local authorities.

Financial regulatory compliance is a key aspect of corporate compliance and is a fundamental part of any corporate secretarial services package offered by back office services providers. Corporate secretarial services are widely referred to by the abbreviation ‘cosec.’

Your chosen corporate lawyer in Bolivia will be able to direct you to a good firm of accountants able to meet your needs with regards to financial regulatory compliance. 

However, if you will be seeking a broader range of support, including the likes of recruitment, visa processing, and ongoing administrative and operational assistance, you may find that a dedicated provider of back office services in Bolivia is your most suitable partner.

Because such a company will be able to cover all of your needs under one services agreement, so you will only have to liaise with one provider, while enjoying the convenience of being able to easily modify the services you are receiving across a range of different disciplines. 

Moreover, if your provider has a presence in other markets, they will also be able to support future expansions and provide cross-border support, including the likes of more efficient tax planning.

Read on to learn more about financial regulatory compliance in Bolivia, or contact us to find out how we can support you doing business in this South American country, or any of the other 15 markets in Latin America and the Caribbean where we have offices.

Bolivian market presents untapped opportunities

While Bolivia is not generally the first name that springs to mind when it comes to investing in Latin America, the country is full of untapped opportunities and has witnessed exponential growth since the turn of the century.

While, like most countries around the world, the COVID-19 pandemic caused considerable economic contraction, Bolivia’s Ministry of Economy and Public Finances announced that GDP growth had reached 6.1% in 2021. That growth is expected to be matched in 2022, according to President Luis Arce – himself a former economy minister.

Historically, Bolivia’s hydrocarbon deposits have been a major draw for investment, with the country sat on 10.7 trillion cubic feet of natural gas reserves, and more than 240 million barrels of proven crude oil reserves. The country also sits on significant deposits of lithium, ores, and precious metals.

Bolivia is well-known for its farming output, with the agricultural sector consistently generating at least 10% of GDP over recent years and both soy-based animal fodder and cereals among the country’s most significant export commodities.

Notably for English-speaking investors, according to the most recent edition of the English Proficiency Index, Bolivia witnessed a significant increase in English proficiency during the global pandemic, registering the second-highest proficiency in Latin America.

Also of interest to investors is the fact that Bolivia is a founding member of the Andean Community of Nations – a regional association that also includes Colombia, Ecuador, and Peru, which has been implementing a series of measures to deepen integration that are beneficial for doing business.

Bolivia is also currently awaiting formal acceptance to the Southern Common Market (Mercosur) — a 30-year-old economic association that includes Argentina, Brazil, Paraguay, and Uruguay.

All of those factors add up to make the country a good option for investment, however to capitalize on the opportunities available, you will need to understand and adhere to financial regulatory compliance in Bolivia.

A snaphsot of the market in Bolivia, where your business will need to adhere to financial regulatory compliance to avoid legal inconveniences.
A snapshot of the market in Bolivia

Financial regulatory compliance in Bolivia: initial obligations for new companies

In order for a new company to be able to adhere to financial regulatory compliance in Bolivia, it must complete a number of initial steps, including:

Obtain a Tax Identification Number (NIT): A crucial aspect of corporate compliance in Bolivia is the holding of a NIT, which must be assigned before a new company can begin doing business, and with which the entity will be identified for all financial matters.

Obtain a Trade Registration Number: Any company operating must also have a Trade Registration Number, which is renewed annually.

Obtain a company operating license: Companies must obtain an operating license, the details of which can vary based on the business activity and location of the company. For example, in Santa Cruz, Bolivia’s industrial heartland, a company must be granted an environmental permit before it can receive an operating license.

Register a legal address: All entities in Bolivia must have a registered legal address, to which official correspondences will be directed. 

Appointment of a legal representative: Any company registered in the country must also have a legal representative in Bolivia, who will act on behalf of the legal entity in order to carry out certain procedures and formalities. Legal representatives must meet the following criteria:

  • Be of legal age (18 years or older)
  • Be a natural person or a foreign national with a Bolivian identity card
  • Have legal residence status in Bolivia
  • Have the documentation that supports their designation as a legal representative of a legal entity.

Financial regulatory compliance in Bolivia: key responsibilities and dates

While some aspects of financial regulatory compliance in Bolivia can depend on the type of legal structure your entity has, the following obligations are generally applicable:

Annual General Meeting (AGM): At least one AGM must be held per year to approve the company’s last year of financial statements, with the date of the AGM dependent on when the fiscal year closes, which varies by activity as follows:

  • Industrial and oil companies: March 31
  • Agricultural companies: June 30
  • Mining companies: September 30
  • Banks and professional services: December 31

In all cases, an AGM must be held within 120 days of the close of the fiscal year, so, for example, banks and professional services providers must hold an AGM before the end of April.

Presentation of financial statements: As in the case of the AGM, another element of corporate compliance in Bolivia that must be undertaken within 120 days of the close of the fiscal year is the presentation of the company’s financial statements to the national tax authority.

Upkeep of company book: An important aspect of financial regulatory compliance in Bolivia, which will be covered by any audit, is the proper upkeep of the company books, which contain information related to shareholders.

Renewal of Trade Registration Number: Each year, companies must renew their Trade Registration Number before the Trade Registry of Commerce Office, with the following deadlines for renewal based on the business activity:

  • Mining companies: February 28
  • Banks and professional services: May 31
  • Industrial and oil companies: August 31
  • Agricultural companies: November 30

Renewal of company operating license: The company operating license must also be renewed on an annual basis, with discounts offered to those companies that clear the payment in a timely manner.

Monthly tax declarations: Certain taxes, such as VAT and transaction tax (TT) must be declared on a monthly basis. In Bolivia, VAT is generally set at 13%, while TT is applied to any type of person with an income and set at 3%.

Annual tax declaration: All companies must make an annual tax declaration following the close of the financial year, and pay a business profit tax (BPT), set at 25% of net profits.

Biz Latin Hub provides corporate compliance services in Bolivia

Biz Latin Hub is a professional services company providing integrated market entry and back office services throughout Latin America and the Caribbean, with offices in 16 major cities around the region.

As such, we specialize in multi-jurisdiction market entries and operational support, including the likes of cross border tax planning.

Our portfolio of services includes accounting & taxation, company formation, corporate legal services, and hiring & PEO, among others, meaning we have the expertise and personnel to effectively assist you with financial regulatory compliance in Bolivia.

Contact us today to find out more about how we can help you.

Or read about our team and expert authors.

Key services offered by BLH including legal services, accounting & taxation, hiring & PEO, due diligence, tax advisory, and visa processing
Key services offered by Biz Latin Hub

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