It is essential for foreign executives to know their obligations for corporate compliance in Bolivia. Understanding and complying with local law means being able to expand into Bolivia as smoothly as possible while remaining in good standing with local authorities. Learn all you need to know about corporate compliance in Bolivia.
Types of companies and corporate compliance in Bolivia
Corporate Compliance in Bolivia. A summary of the legal entities in Bolivia.
Foreign executives who decide to enter the Bolivian market must decide which type of company is the best option for their business. Likewise, they must prepare all the documents and requirements needed in order to register the company before the Trade Registry Office in Bolivia. The main types of companies in Bolivia include:
Limited Liability Company LLC (Sociedad de Responsabilidad LimitadaS.R.L.): This is the most common type and requires a minimum of 2 shareholders up to a maximum of 25.
Corporation (Sociedad Anónima S.A.): Capital stock can be dividedinto shares that you can transfer, and in which partners are not personally liable for corporate debts. Moreover, a corporation requires a minimum of 3 shareholders and there are no restrictions on the number.
A branch of a Foreign Company: The main company regulates the rules and assumes responsibility before third parties.
Once the company is duly registered, business owners must meet the corporate compliance requirements established in Bolivia. Some of these requirements include requesting the Tax Payer Number and the Operating license and opening a corporate bank account.
Requirements for corporate compliance in Bolivia
Legal entities in Bolivia must appoint a legal representative to declare the company’s will. The legal representative must be an individual, Bolivian or foreign, residing in Bolivia. This legal representative will represent the foreign shareholder before the Bolivian tax authorities and the government. To operate a business in Bolivia, a legal representative and a legal address must be guaranteed.
Legal Representative: This natural person will be in charge of representing the company before third parties. They will receive and process any official communication.
Legal Address: A company must register a legal address in Bolivia to operate, undergo inspections, and to receive official notifications.
Requirements established by the Commercial Registry
Corporate compliance in Bolivia establishes that you must hold an annual meeting.
Company Books: You have to register any general meeting assembly and shareholder’s information in the shareholders’ meeting book. A corporation in Bolivia must also have a ‘board of directors resolutions book’.
Annual General Meeting: You must hold a meeting once a year approving the company’s Financial Statements.
Registry Number Renewal: You must renew your Registry Trade Number every year according to dates listed in the following chart:
FISCAL YEAR CLOSURE
RENEWAL DUE DATE
December 31st
May 31st
March 31st
August 31st
Tax obligations for companies in Bolivia
Companies operating in Bolivia must obtain a Tax Identification Number (NIT) and declare all financial transactions to determine what taxes you must pay.
The three main taxes that any type of company must declare and pay are:
TAX
Declaration to Tax Office
VAT: A 13% tax is applied to the operations of the sale of goods and the provision of services.
Must be declared each month, according to the last digit of the company’s tax identification number.
TT (Transaction Tax): A 3% income tax is applied over any transaction. Likewise, a 3% income tax is applied without any discount.t.
Must be declared each month, according to the last digit of the company’s tax identification number.
BPT (Business Profit Tax): A tax of 25% is applied to the earnings obtained each year.
Must be declared each year, according to the fiscal year-end closing date determined by the company’s main activity.
Labor and social security compliance
Foreing executives doing business in Bolivia must comply with labor regulations, these include:
National minimum wage is 305 dollars.
Companies are required to make thirteen monthly salary payments (12 salaries + December Christmas bonus).
The standard working time is 8 hours a day.
Employees are entitled to 15 days of paid vacation.
Companies with employees must register at the Ministry of Labor, Pension Fund Administrator (AFP’s), and Health Public Insurance. Furthermore, contributions established by Bolivia’s Labor Laws will be calculated from each employee’s salary, as follows:
Contributions to be covered by the employer
Health Insurance= 10%
Contribution pro =2%
Professional risk = 1.71%
Employer contribution= 3%
TOTAL = 16.71% calculated from an employee salary
Engage with our specialists to discuss corporate compliance in Bolivia
Starting a business in Bolivia can be laborious, business owners must comply with local regulation to avoid risks and contingencies. At Biz Latin Hub, our team of legal and accounting specialists provides comprehensive company formation advice and guidance to support your expansion. With our full suite of bilingual market entry and back-office services, we are equipped to deliver excellence and ensure your business operations’ success in Bolivia.
Corporate Compliance in Bolivia. Key services offered by Biz Latin Hub
As informações fornecidas aqui não devem ser interpretadas como orientação ou aconselhamento formal. Consulte um profissional para sua situação específica. As informações fornecidas são apenas para fins informativos e podem não abranger todas as leis, padrões e práticas recomendadas pertinentes. O cenário regulatório está em constante evolução; as informações mencionadas podem estar desatualizadas e/ou podem sofrer alterações. As interpretações apresentadas não são oficiais. Algumas seções baseiam-se nas interpretações ou pontos de vista de autoridades relevantes, mas não podemos garantir que essas perspectivas serão apoiadas em todos os ambientes profissionais.
La información que aquí se ofrece no debe interpretarse como orientación o asesoramiento formal. Por favor, consulte a un profesional para su situación específica. La información proporcionada tiene únicamente fines informativos y es posible que no recoja todas las leyes, normas y mejores prácticas pertinentes. El panorama normativo está en continua evolución; la información mencionada puede estar obsoleta y/o sufrir cambios. Las interpretaciones presentadas no son oficiales. Algunas secciones se basan en las interpretaciones o puntos de vista de las autoridades pertinentes, pero no podemos garantizar que estas perspectivas se respalden en todos los entornos profesionales.
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 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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