Financial Regulatory Compliance in Bolivia: a Guide
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If you are looking to enter the Bolivian market or expand already existing operations, 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 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.
A provider of back office services will be able to cover all of your needs under one services agreement. You will only have to liaise with one provider, and enjoy 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, such as 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
Bolivia is not generally the first name that springs to mind when thinking of investing in Latin America. But the country is full of untapped opportunities and has had strong economic growth since the turn of the century.
As was the case in most countries around the world, the COVID-19 pandemic caused considerable economic contraction in Bolivia. However, the country has recovered rapidly. Bolivia’s Ministry of Economy and Public Finances announced that GDP growth had reached 6.1% by the end of 2021. GDP in Bolivia is expected to reach 45.14 USD Billion by the end of 2023, according to Trading Economics global macro models and analysts’ expectations.
Historically, Bolivia’s hydrocarbon deposits have been a major draw for investment. The country sits on 10.7 trillion cubic feet of natural gas reserves, and more than 240 million barrels of proven crude oil reserves. It also has significant deposits of lithium, ores, and precious metals.
Bolivia is well-known for its farming output. The agricultural sector has consistently generated at least 10% of GDP over recent years, and soy-based animal fodder and cereals are among the country’s most important exports.
Particularly important for English-speaking investors, Bolivia’s population have high levels of English proficiency. 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 many investors is the fact that Bolivia is a founding member of the Comunidad Andina (Andean Community) – a regional association that also includes Colombia, Ecuador, and Peru, and has been implementing a series of measures that deepen economic integration and are beneficial for business.
Bolivia is also currently waiting for 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 explain why the South American country is a good option for investment. But to capitalize on the opportunities available, you will need to understand how to achieve full financial regulatory compliance in Bolivia.
Financial Regulatory Compliance in Bolivia: Initial Obligations for New Companies
To achieve full financial regulatory compliance in Bolivia, a company must complete a number of initial steps, including the following:
Obtain a Tax Identification Number (NIT): A crucial aspect of corporate compliance in Bolivia is holding of a NIT. It must be assigned before the new company can begin doing business, and provide identification for all financial matters.
Obtain a Trade Registration Number: Any company operating in Bolivia must also have a Trade Registration Number, and renew it annually.
Obtain a company operating license: Companies must obtain an operating license, the details of which 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 will 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. For example, banks and professional services providers must hold an AGM before the end of April.
Presentation of financial statements: Another element of corporate compliance in Bolivia is the presentation of the company’s financial statements to the national tax authority. This must also be undertaken 20 days of the end of the fiscal year.
Upkeep of company book: Another important aspect of financial regulatory compliance in Bolivia, is the proper upkeep of the company books, which contain information related to shareholders. This will be covered by any audit.
Renewal of Trade Registration Number: Each year, companies must renew their Trade Registration Number before the SEPREC 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 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.
Frequently Asked Questions on Entity Legal Compliance in Bolivia
Based on our extensive experience these are the common questions and doubts of our clients on regulatory compliance in Bolivia:
– An appointed Legal Representative who will be personally liable, both legally and financially for the good operation and standing of the company. This should be a local national or a foreigner with the right to live/work in the country.
Yes, a registered local Fiscal Address is required for all entities in Bolivia for the receipt of legal correspondence and Governmental visits.
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.
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.
