Bolivia is a country in Latin America that has aroused recent interest among foreign investors and entrepreneurs. Bolivia enjoys a unique position in central South America due to its direct connections to most of the continent’s countries. It is also an increasingly popular destination for companies that want to test unsaturated markets.
Starting a business in Bolivia is a very interesting opportunity for many investors and entrepreneurs since the nation has seen more trade and improved business opportunities.
Why start a company in Bolivia
In addition to the benefits outlined below, its strong growth over recent years, unsaturated markets, and competitive labor pool are some of the major reasons investors choose Bolivia as a country of choice.
- Bolivia is a member of MERCOSUR, which means it has access to the big economic block in the southern part of the continent, along with countries like Chile, and others.
- Bolivia is also a member of the Andean Community of Nations, a multinational organization that authorized Decision 578 to avoid double taxation between member nations, including Peru, and Ecuador.
- In Bolivia, there are no limitations on foreign investments or foreign currency controls, also, it is encouraged, since it brings in investors from all around the world.
- Bolivia is also part of the World Trade Organization and other treaties with South American countries that enables the free flow of goods and labor.
- Bolivia can also be seen as a bridge that connects other Latin American countries.
Company structures in Bolivia
Bolivia’s Commercial Code approves the following business entities:
- Corporation (Sociedad Anonima or S.A.): this is a company structure in which common capital includes transferable shares and in which each stockholder’s liability is restricted to the number of shares held. Management is the responsibility of the corporation’s board of directors, which included three to twelve individuals. In Bolivia, an S.A. can be constituted in two ways, either by a single act or by the public subscription of shares.
- Limited Liability Company (Sociedad de Responsabilidad Limitada or S.R.L.): this is a Bolivian company form in which each partner’s liability is restricted to the amount invested. The firm may have between two and twenty-five partners. Capital shares must also be paid in full at the time of the company incorporation.
- Joint Stock Company (Sociedad en Comandita por Acciones): this is a company structure in which partners are responsible for obligations as ordinary partners, while limited partners incur no liability beyond the number of shares held.
- Individually Owned Company (Empresa Unipersonal): this is a company form that is owned by a single person. In this type of company, It is recommended to hire a Legal Manager and an Accountant since the owner of the company is going to be liable for all the company obligations with its own personal assets.
Also, investors may opt to form a branch (Sucursal) or a Representative Office (Oficina de Representación) in Bolivia.
Company registration processes in Bolivia
Registering a company in Bolivia is a very interesting opportunity for foreigners, and it involves the following processes:
Decide on the right type of legal structure
The company structure chosen should depend on how many people are going to make up the company, as well as the capital available and the nature of the business to be conducted.
Draft and sign a power of attorney
If the company shareholders are not present in Bolivia, a legal representative should be assigned. To appoint a legal representative, the company owner will need to draft and sign a power of attorney, which will give that appointed individual the right to act on the owner’s behalf, representing the owners in front of local authorities and signing documents for them.
Also, consider that for foreign shareholders, extra documentation will be required. And all documentation that comes from abroad must be legalized and apostilled and these hard-copy documents must be sent to Bolivia.
Register the company before Bolivian authorities
The company must be registered at Bolivia’s Public Registry of Commerce (Registro Público de Comercio), including the company name, entity type, office address, and economic activity. After the registration, the owner will then receive a commercial registration number, proving the legal status of the company in the eyes of local authorities.
Note that some of the registration processes can be done online
Obtain the tax ID number for the company
After getting a commercial registration number, the incorporation (the owner or the legal representative), can then request a tax identification number (NIT) from the National Tax Service (Servicio de Impuestos Nacionales).
Associate with Bolivia’s national health insurance and pension funds administration
Associating the company with the National Health Insurance (Caja de Salud) is compulsory, and so is registering the company at the Pension Funds Administration (Administradoras de Fondos de Pensiones). Both processes can be undertaken by the legal representative.
Open a bank account for the company
After the company is registered in Bolivia, opening a corporate bank account is one of the most important things to do when starting the company’s business activities. Business bank account plays a key role for the startup business in Bolivia as it allows the owners to keep a track of the business expenses which in turn simplifies tax reporting.
Apply for a municipal operating license
With the corporate bank account opened, the next step is to obtain a Municipal Operating License (Licencia de Funcionamiento Municipal) at the local municipality in which the company com office is located. The requirements for this vary depending on the nature of the business and the type of work being done.
The registration of business in Bolivia is a good choice for investors and entrepreneurs, wishing to conquer new markets as this jurisdiction is known for the development of control ownership.
If you are interested in starting a business in Bolivia, let’s go ahead and contact your Damalion expert now to get started.
