Find a PEO in Bolivia & Get Staff Right Away

Engaging with a professional employer organization (PEO) when entering the Bolivian market could be a wise decision if you have a smaller-scale or temporary operation, or are looking to get your business moving in the shortest time possible.

As one of the fastest-growing economies in Latin America, Bolivia offers an unsaturated market with enormous potential for foreign companies looking to invest in sectors such as hydrocarbons, mining, natural resources exploitation, transport, and communication.

Bolivia has shown consistent growth in gross domestic product (GDP) and gross national income (GNI) over recent years. With economic growth expected to bounce back in the future to pre-COVID-19 pandemic levels, the prospects for investment in Bolivia appear promising.

Companies looking to enter the Bolivian market who don’t need to incorporate a company or appoint a full legal representative in Bolivia, should consider hiring local staff through a PEO.

Recruit and attract the best talent for your company. If you are looking for entrepreneurship in Latin America, Biz Latin Hub is your ally to hire the human talent you need. PEO in Bolivia
Recruit and attract the best talent for your company. If you are looking for entrepreneurship in Latin America, Biz Latin Hub is your ally to hire the human talent you need. PEO in Bolivia

Why Hire Staff Through a PEO in Bolivia?

Contracting the services of a PEO in Bolivia enables you to recruit, hire, or fire local staff without needing to formally establish a company in the country because the PEO firm will do it all on your behalf.

The PEO will have an established recruitment process based on the local market and can help you manage time-consuming administrative activities tasks such as payroll management.

A PEO in Bolivia will also act as the registered employer before local authorities. However, the PEO client will still maintain the day-to-day relationship with employees, and will provide them with the relevant instructions for their daily work activities.

What Are the Main Advantages of Working with a PEO?

There are many advantages of hiring staff through a PEO in Bolivia.

In many cases, with a PEO there will be no need to set up a company or branch in Bolivia. If your company has a smaller-scale operation or will develop its activities for a short period of time, it will likely not be necessary to establish a company in the country. In this sense, a PEO will be in charge of recruiting, hiring, firing, and paying all taxes and benefits to local employees. This will leave you time to focus on other aspects of your business.

Additionally, a PEO will request working permissions for foreign employees. In Bolivia, thewill oversee any working visas or residency permits for foreign workers. Note that in Bolivia foreign workers can only represent 15 percent of the total payroll of a company.

: Moreover, a PEO will manage all payments for employees. In Bolivia, the PEO will be responsible for payroll presentation, health insurance, pension fund, and tax payments related to employees.

A PEO will represent your company legally. Any claim related to the employees will be directed to the PEO in Bolivia that represents your business. A PEO has the necessary powers to resolve legal issues while offering a guarantee to the client that legal norms and labor law will be fully adhered to.Lastly, a PEO can provide legal counsel on labor law.  It is equipped to provide professional advice on matters related to employee hiring, constructive dismissal claims, and job compliance. This will help your company avoid legal problems that can diminish the profitability of your business operations in the country.

Options to Expand Internationally infographic by Biz Latin Hub for an articlo about PEO in Bolivia
Options to expand internationally. PEO in Bolivia.

Challenges of Hiring Through an Employer of Record in Bolivia

Although it has its advantages, the hiring process through an Employer of Record in Bolivia can present several issues. While the EOR structure offers businesses a convenient and faster way to hire employees in a new location, it also carries the risk of inadvertently establishing a permanent establishment. This risk arises when the business is perceived to exert substantial control over the activities of its employees in the new location or when it maintains a significant presence in a foreign country. Therefore, it is crucial that businesses evaluate their EOR arrangement thoroughly and ensure it is in strict compliance with local laws and regulations.

Another issue that may arise when working with an EOR is rising admin costs. When hiring a substantial number of employees, the expenses linked to the EOR structure can expand rapidly. For instance, the third-party EOR service provider may levy a premium for their services and impose additional costs for managing the benefits of a large workforce. By establishing a local entity, businesses can attain greater control over their workforce and potentially mitigate the expenses associated with the EOR structure.

Moreover, working with an EOR may worsen cultural and communication obstacles. Companies that need to become more familiar with the language and culture in Bolivia may experience problems—for example, communicating with employees and understanding local labor laws and regulations. Miscommunications, misunderstandings, and compliance issues are possible as a result.

Businesses that use EORs may have less ownership and control over their employees. Since the Employer of Record in Bolivia is the legal employer, the company may have less influence over hiring decisions or other employment-related matters.

Lastly, when partnering with an EOR, businesses might encounter challenges in creating a unified company culture. As employees work remotely and are overseen by a third-party organization, fostering a feeling of shared objectives and connection among the workforce can be challenging.

Something to keep in mind when choosing an EOR provider is that Bolivia is currently undergoing significant political turmoil. As a result, your EOR must have a comprehensive understanding of these relevant political changes and their potential impact on your business.

How to Use a Payroll Calculator

If you are keen to get an idea of the possible costs involved in payroll outsourcing in Bolivia, using a payroll calculator is one way to get a very good estimate.

Use Biz Latin Hub Payroll Calculator for PEO in Bolivia.
Use Biz Latin Hub Payroll Calculator for PEO in Bolivia.

Although a payroll calculator won’t be completely accurate, it will give you the opportunity to look at costs while varying the salary, the number of employees, the country you want to enter, and the currency you wish to work in. As such, you will be able to understand your likely costs across a range of salaries, while also being able to compare other countries as potential alternative destinations. 

You can find the BLH payroll calculator at the bottom of our Hiring & PEO Services page. The calculator will allow you to make good estimations of the costs involved in hiring in Latin America and the Caribbean based on country, currency, and salary, with the calculator factoring in local statutory deductions.

To use the BLH payroll calculator, you will need to undertake the following steps:

Step 1: Select the country

Choose the country where you are doing business, or planning to launch. This feature will be useful when it comes to comparing potential alternative markets.

Step 2: Select the currency you wish to deal in

You can choose between US dollars (USD), British Sterling (GBP) and Euros, as well as the local currency for the country you are looking at, compared to what  is most convenient for you. Note that for Ecuador, El Salvador, and Panama, the local currency is also USD, as they have dollarized economies.

Step 3: Indicate an employees monthly income

Here you can indicate the expected salary you will be paying an employee, in the currency of your choice.

Step 4: Calculate your estimated costs

Based on all of the information you have provided, you will receive results indicating your estimated costs, including a breakdown for estimated statutory benefits you will be liable for.

Step 5: Compare your costs to other options

With a good estimate at hand of how much your staff in Bolivia would be, if you are flexible about your expansion into Latin America and the Caribbean, you can use the BLH payroll calculator to compare those costs to other jurisdictions.

Common FAQs on Hiring Through a PEO /Employer of Record (EOR) in Bolivia

Based on our extensive experience, these are the common questions and doubts of our clients on hiring through an EOR in Bolivia.

1. How does one hire employees in Bolivia?

You can hire an employee by incorporating your own legal entity in Bolivia, and then using your own entity to hire employees or you can hire through an Employer of Record (EOR), which is a third party organization that allows you to hire employees in Bolivia by acting as the legal employer. With an EOR you do not need a Bolivian legal entity to hire local employees.

2. What is in a standard employment contract in Bolivia?

A standard Bolivian employment contract should be written in Spanish and contain the following information:

  • ID and address of the employer and employee.
  • City and start date.
  • The location where the service will be provided.
  • Job description.
  • Remuneration and benefits (if applicable). 
  • Method payment and frequency.
  • Probation period.
  • Specification of daily and weekly working hours.
  • Beneficiaries’ ID numbers and type of relationship with the employee.
  • Confidentiality clause.

3. What are the mandatory employment benefits in Bolivia?

The mandatory employment benefits in Bolivia are the following:

  • Working tools necessary to carry out the work (if applicable)
  • Payment of social security contributions (health, pension, and labor risks).
  • Social benefits (severance pay, aguinaldo)
  • Paid time-off (vacation and Sunday rest).
  • Disabilities (common or labor origin).
  • Overtime and surcharges (if applicable)
  • Sick Leave, maternity, and paternity Leave
  • Work-Related Accident and Occupational Disease Coverage

For more information on mandatory employment benefits read our recent article on Employment laws in Bolivia

4. What is the total cost for an employer to hire an employee in Bolivia?

The total cost for an employer to hire an employee in Bolivia can vary based on the salary. However, the employer cost for mandatory employment benefits is approximately 16.71% percent of the gross employee salary and benefits.

Please use our Payroll Calculator to calculate employment costs.

5. What is the difference between hiring through an EOR and forming a legal entity?

Forming a legal entity differs from hiring through a EOR in the following ways: 
It is slower to establish. 
Creates a permanent presence in the country. 
All costs are deductible through a local entity. 
Provides the ability to sign contracts and agreements locally. 
Provides ability to invoice through local entity. 
Legal entity compliance support is required. 
Company hires employees directly. 

6. What is the difference between a PEO and an EOR?

An EOR can offer a wider range of services than a PEO as it assumes the role of legal employer of your employees. 

Hire local staff in Bolivia With the Help of Biz Latin Hub

At Biz Latin Hub, our team of multilingual recruitment and legal specialists has the expertise required to support employers hiring staff in Bolivia, and guarantee full compliance with labor regulations in the country. With our full suite of PEO services in Bolivia, as well as other countries across Latin America and the Caribbean, we are your single point of contact to solve all of your hiring and payroll needs.

Reach out to us now for more information on how we can help you throughout the recruitment and hiring process in Bolivia.

Learn more about our team and expert authors and watch the following video to know more about how to expand into Latin America through a PEO solution.

Biz Latin Hub’s Snapshot of Employment Law in Bolivia

WORKING HOURS
A standard working day is eight (8) hours long, with additional hours worked being paid extra. The standard working week is no less than five (5) and no more than six (6) days long, and includes a maximum of 48 hours.

TYPES OF EMPLOYMENT CONTRACT

There are two (main) types of employment contracts in Bolivia:

Indefinite contract: 
This is the most common type of contract, which can only be terminated when both parties agree, or under circumstances that allow one part to act unilaterally. Such contracts include a trial period of 90 days.

Fixed-term contract: 
This type of contract can only be used in specific situations, such as when the employee is engaged in activities not related to the company’s main activities; in order to fill a temporary absence, such as staff maternity leave or vacations; in extenuating situations of need, such as medical staff during an emergency. The maximum period such a contract can last is one (1) year. 

Termination and severance

Under Bolivian law, there is no mandatory notice period that an employee must provide when they intend to vacate a job, however it is generally recommended that a period of 30 days notice is established in the company’s internal guidelines or the employment contract.

Should the employee choose to terminate the contract of an employee, they are required to pay them a final month of salary, even if they do not serve the entire month, as well as compensate them for any outstanding vacation and public holiday allowance. The employee must also receive a proportion of their annual bonus, based on how much of that year they have worked, as well as compensation based on length of service, equivalent to one month of salary per year with the company. Any employee who has served for at least three months with a company is eligible for length of service compensation.

Only during an employee's probation period, or in the event of them being guilty of misconduct or any other behavior prohibited under the terms of their contract – as proven during a proper internal or judicial process – can an employee have their contract terminated without compensation.
 

VACATIONS, LEAVE, AND OTHER ABSENCES

Statutory vacation allowance /  Paid Time Off leave (PTO)
Employees are entitled to 15 paid time off days per calendar year, but only after the employee has completed one (1) year of service with the company. It is the employer’s responsibility to make sure an employee uses their vacation allowance.

Maternity and paternity leave: 
Maternity leave allowance is 45 days prior to the due date and 45 days after the baby is born. Fathers are entitled to three (3) days of paid paternity leave. Parents cannot be removed from their job until at least one (1) year after the birth of a child. 
 
Sick leave: 
Employees have two (2) working days to present an authorization for sick leave signed by the health insurance provider with which the company is registered in order for the employee to be entitled for payment for any days of work missed through illness.

Bereavement:
For public employees, bereavement leave totals three (3) days in the event of the death of a parent, spouse, sibling, or child. While the private sector is not bound to this regulation, it is generally observed.


STATUTORY CONTRIBUTIONS
Employee Deductions:
Employee salaries are subject to deductions of 12.71% to cover social security (10%), common risk (1.71%), insurance (0.5%) and pension fund contribution (0.5%). For anyone earning four times the minimum salary, value-added tax (VAT) is applied to the remainder of the salary after the 12.71% deduction is made.
Employer Contributions:
Employers must make contributions totalling 16.71% of an employee’s salary, made up of health insurance (10%), pension contribution (2%), professional risk (1.71%), and other contributions (3%).
Profit sharing:
By law in Bolivia, if a Company experienced profits during the last year, it must share 25% of its annual net profits with its employees in a proportion based on each employee’s salary. To receive this benefit, employees must have worked for the company for at least three months.

PEO in Bolivia
Snapshot of Employment Law in Bolivia. PEO in Bolivia

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Legal Team Bolivia
Legal Team Bolivia

Legal Team Bolivia is the Biz Latin Hub leading experts on doing business in Bolivia The Team writes on the news, doing business, law, and changing regulations. The team are experts in corporate law, Administrative law, Employment law, Immigration law and legal advisory services. Read more about them here. You can contact Legal Team Bolivia via our "contact us page".

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