With more businesses than ever expanding into Latin America and entrepreneurs taking a global attitude towards growth, more and more Western organizations are choosing markets such as Bolivia as part of their international expansion plans. Whilst not the largest or most prosperous nation in the region, Bolivia does boast a strong export market and a number of lucrative free trade agreements, which offer businesses access into other Latin American nations with higher demand and GDPs.
However, with high barriers to entry and a number of negative media headlines painting the country as difficult to invest in (one foreign entrepreneur said he waited months for permits and inspections, which meant he had to spend more money to get his business off of the ground) some have decided against expanding into Bolivia, but this increases the number of opportunities available to businesses with the right strategy and value proposition.
Below, we’ve outlined the steps to establishing a business in Bolivia, and offer guidance to entrepreneurs and investors looking to maximize their returns and turn their brand into a household name in the country…
1. Assess Demand for Your Products
Before taking your business into a new market, it is important to assess the level of demand for your products or services. Indeed, there is little point in spending thousands of dollars on international expansion if you do not generate a return on your investment. We recommend that you visit the country on a research mission, or incorporating a Bolivian representative office (Oficina de representación) to conduct market research and promote your business before you enter into the country officially. This can save time and money, particularly in sensitive or highly competitive niches where experience on the ground is key to success.
2. Understand Bolivian Culture
When establishing a business in Bolivia, it is wise to swat up on the local business culture and etiquette to ensure that, when you meet with business contacts, bankers and financial advisors, you represent yourself and your organization in the best possible light. Indeed, as a foreign entrepreneur, entering into the country without doing your research could leave you looking unprepared or rude, so get to grips with the basics.
Bolivia has a professional business attitude, and whilst Bolivians are friendly and open, they expect you to be respectful and professional at all times. Start with a firm handshake, and start conversations with Buenos días (good day). Bolivians are proud of their titles, and as such, you should introduce your staff with their appropriate title and use formal names.
Be aware that Bolivians find it acceptable to be 15-30 minutes late to an event; this is not a sign of rudeness or lack of professionalism, but the general attitude towards punctuality in the country. The same can be said for business deadlines, which can be frustrating in the first instance, but you’ll soon become accustomed to their way of thinking and behaving.
3. Apply for a Visa
Once you have decided that Bolivia is the right destination for your expansion, you should apply for a business visa in the country. Entrepreneurs wishing to invest US$30,000 or more can receive a visa, and after two years of living in the country, they’ll be granted permanent residence, and within three years, permanent citizenship. This is great for entrepreneurs who are looking to permanently or temporarily relocate to the country, reducing visa/immigration costs and headaches and offering guarantees to investors looking to return to their overseas business, without having to reapply for a visa each and every time it requires attention.
4. Incorporate Your Company
There are several Bolivian entity types to consider when establishing a business in Bolivia. Deciding on the right one depends on the nature and aspirations of your business. A Limited Liability Company, for example, requires just one director and two shareholders, whereas a Public Corporation requires at least one resident director (three in total) and three shareholders, but allows businesses more control over their assets. If you don’t have a local business partner, then consider incorporating a Limited Liability Partnership (requires two shareholders and two directors), a branch office, or a representative office, although the latter cannot conduct any commercial activities.
5. Recruit Staff For Your Business
Unless you speak fluent Spanish or want to send your entire team to Bolivia as part of an expansion, the chances are that you’ll need to recruit staff as soon as possible. Working with a company that offers recruitment and hiring services will ensure you select the very best candidates – after all, people make businesses. Alternatively, you could hire through a PEO (Professional Employer Organisation) to negate the need for incorporating your business in Bolivia, although companies looking for long-term growth in the country should go down the traditional route and advertise positions. However, payroll and HR can be easily outsourced if you want to build a small talent roster and don’t have the capital for a dedicated HR team.
6. Market Your Products and Services
Bolivians prefer to conduct business face to face, and calls, faxes, and emails are generally ignored or dealt with low priority. As such, it’s important to hire a Business Development Manager in the country, or if you can speak the language, network with individuals yourself by attending networking exhibitions and conferences, and arranging meetings with senior business figures and key decision makers on your own. First impressions count, and getting to grips with social and business etiquette will serve you well and allow you to forge genuine business relationships that can be lucrative. It can take time to build your name and brand awareness, so entering the market as soon as possible will put you in good stead.
The truth is that you cannot rush business relationships when establishing a business in Bolivia. The process of networking and relationship building is often slower and more frustrating than it would be in your home country. The only way to build and sustain business relationships is to put yourself out there.
Let Biz Latin Hub Help
At Biz Latin Hub, we offer a range of back-office support services to assist in your expansion into Bolivia. From company incorporation through to recruitment, due diligence, and visa processing, we’re the one-stop-shop for entrepreneurs with a global vision. Contact us here, and a member of the team will get back to you with a personalized business strategy that can help you unlock new commercial opportunities in Bolivia.
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