Investing in Bolivia - A Business Option

Bolivia, South America. Located in the heart of the South American continent, Bolivia provides a level of interconnection and expansion that can be considered privileged when compared to its neighbours.

Date 01/08/2011

Bolivia, along with its capital Sucre, is an area in a state of democratic transition, which has seen a consolidation of its autonomous government and a major push towards the nationalization of strategic industries by the state. However, the country also offers great business opportunities for social, cultural, geographic and economic reasons.

For this purpose, we can refer to the country's traditional mining and hydrocarbon role as a major international exporter, as well as examples of large public and private investment that have helped generate jobs and provide companies with the capacity to produce supplies for domestic and international markets.

We can also look to the large agricultural and livestock sectors that have benefited from the warm climates in the country's eastern region (Amazonia), where potential for sector expansion is unlimited. In this area, we can see where the Bolivian government has, at no cost, conceded the land to provide an economic function, which involves respecting the norms and customs in the region, protecting the environment and helping to avoid employer exploitation. This region provides substantial potential for growth in agricultural sectors, especially the production and export capacity of milk.

Additionally, we can look to the potential for water and renewable energy (wind, solar) as a business option in Bolivia as it is a country with large reserves of water that can be used within moderate and responsible projects. We can further this analysis in terms of renewable energy in Bolivia where there is great expectations for the country's sector potential, including access to foreign loans and the transfer of knowledge and generation of culture in what is still virgin territory.

Bolivia is also characterized by its wide spectrum of natural products, including quinoa real (grain) of Potosi and guarana (root) of Beni, which is deeply valued by the pharmaceutical industry, not to mention the large number of organic products produced in Bolivia and marketed across the world.
Following this brief introduction of opportunities to invest in Bolivia, it should be noted that the country has a protectionist approach to labour rights through principals of the OIT, offers a large labour supply and a set minimum wage of $110 per month, at which time an employer must contribute 15 percent towards social security.

The business sector's tax system is set at a value added 13 percent VAT, a 3 percent transaction tax (IT) payable monthly, first applied through fiscal notes and secondly payable in cash and deductions by the management that follow and a 12.5 percent tax on corporate profits that is compensable with the IT. Furthermore, Bolivia has signed a number of double taxation treaties with Spain, allowing a choice of tax systems, especially the ability to enable tax preferences.

Potential investors should take note that Bolivia has ratified a number of international agreements with the World Trade Organization (WTO), promoted from the beginning of the Free Trade Area of the Americas (FTAA) and is negotiating the Free Trade Bolivia with the USA, have signed the Generalize System of Preferences with the European Union (GSP+) as well as with Canada (SGP), Japan (SGP) and Switzerland (GSP).

In reference to its continental role, Bolivia is a member of the Andean Community (CAN) and observed in the MERCOSUR and ALADI. In addition to agreeing to the Economic Complementation Agreement (ACE) with Chile, Mexico and Cuba, Bolivia is working towards strengthening ties with Venezuela and China.

Finally, as a matter of major importance that should be noted is Bolivia?s potential in the area of venture capital or joint venture where they are capable of receiving funds or foreign investments for enterprises located in the country.
This is thanks to a very stable legal framework supported by the country's legislation, enabling stable and fair conditions for business partnerships.

We at the offices of Ratio Legis SC are able to lead, collaborate and enable foreign investments in different fields. We are familiar with the unique demands and features of operating in Bolivia and can help ensure a smooth and peaceful experience for clients, increasing the potential for success. Welcome.

Miguel I. Mardoñez Barrero - RATIO LEGIS SC

Investing in Bolivia - A Business Option

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