The Most Important Steps To Starting A Business In Bolivia.
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Introduction
Bolivia is a country in central South America that enjoys a unique position in the region due to its direct connections to the bulk of the continent’s countries. It also has a lot of raw materials, a lot of territorial variety, and a lot of natural resources. This has resulted in a high demand for goods and services today. As a result, we can conclude that the Bolivian market is appealing to investors.
When a foreign investor considers investing in Bolivia, however, many questions arise. For instance, whose migratory status is required to own or participate in a business? What rights and obligations does a foreigner have in the business world? How do banks in Bolivia treat foreigners? What type of company is best for my needs? What taxes must I pay? In the following essay, we will attempt to answer these and other frequently asked topics in detail.
Before we begin, it is necessary to remind the reader that the material contained in this essay is not intended to replace the need to consult a business attorney. On the contrary, it aims to provide some fundamental information on how to invest in Bolivia in a concise manner, so that all of the material may be confirmed by a professional who can examine the investor’s specific situation.
Aspects Of Migration
What Migratory Status Is Required To Own Or Partner In A Business
No special migratory status, foreigner carnet, or visa is required to own or partner in a business in Bolivia. This means that any foreigner with a foreigner qualification can form a corporation or become a partner in a firm in Bolivia.
It is vital for the firm to have a legal representation once it has been formed. It is crucial to note that in order to enter Bolivia, a foreigner carnet, visa, temporary residence of one or two years, multiple visa, or visa of indefinite duration is required.
Which Documents Given In Foreign Countries Have Legal Value
Bolivia does not participate in the October 5, 1961 Apostilla de La Haya. As a result, any foreign legal person wishing to own or partner in a Bolivian firm must remit any power or scripture awarded in another nation that has been fully attested and legalised in the country where it was granted. This means that documents preserved in a foreign nation, if public and granted there, will have the same value as those in Bolivia if they are properly validated by the Bolivian Consulate in the place of origin.
What Rights And Obligations Does A Foreigner Have In The Business World
Every corporation formed in Bolivia with private funds is granted the same rights and obligations by the Bolivian government. This means that any company formed in Bolivia with foreign capital or partners will be subject to Bolivian law and will receive the same regulatory treatment as a company formed with Bolivian capital and partners.
Where Do Foreigners In Bolivia Get Treatment From Banks
To open and maintain bank accounts in Bolivia, foreigners must have a foreigner carnet. If they don’t have any of these documents, we recommend appointing a Bolivian citizen as a legal representative with the authority to open and manage the company’s bank accounts.
When money is sent from the company’s headquarters or from overseas partners to the Bolivian account, the financial institutions charge a commission. The amount of this fee is determined by the bank, which is why we offer to manage and negotiate these commissions on your behalf so that they can be accommodated within your company’s budget.
Official Vehicles
Which Kind Of Company Best Suits My Objectives
They can be formed with private contributions, sole proprietorships, Limited Liability Companies, Sociedad Colectiva, limited partnership, partnership limited by shares, corporation, unincorporated association, partially government-owned enterprise, and partially enterprise, according to Bolivian legislation.
Because of the following characteristics, limited liability businesses and corporations are commonly formed with private donations and serve the interests and needs of foreign investors:
– Limited Liability Corporation. There must be at least two and no more than twenty partners in these companies; each partner is liable for their social obligations to the degree of their capital contributions. The capital is divided into 100 Bolivian hundred or multiples of one hundred donations.
Corporations.- Corporations must have at least three shareholders, their capital is represented by shares, and their members’ liability is restricted to the number of shares they own.
What steps must be followed before these businesses can begin operations?
To obtain legal status, companies and branches must be founded by public deed and registered in the Trade Register dealership (FUNDEMPRESA). In order to bill, they must register for the National Register of Taxpayers National Tax Service (SIN) and acquire their NIT tax identity number after establishing the firm or branch and obtaining legal status.
At the same time, it must be processed to obtain an operating licence from the appropriate municipal government where the company or branch will operate, as well as to obtain the Ministry of Labor’s Mandatory Registration of Employers and any special certifications or records that may or may not be required depending on the category in which the undertaking operates. In this regard, once you notify us of the company’s category and economic activity, we will answer any questions you may have about unique certifications and documents required by your company.
What Workplace Issues Should Be Considered
Companies and branches with dependent workers must complete their necessary employer registration with the Ministry of Labor and enrol all employees in the short-term social insurance Health Fund so that they have access to health services in the event of illness or injury. These enterprises must also register with the Pension Fund Administrators AFPs for long-term social insurance in order to manage resources for workers when they reach retirement age.
Employees of enterprises subject to the General Labour Act, which states that no worker may be paid less than the national minimum wage, which is currently fixed at Bs. 1,656, 00 (A 1656 Bolivian 00/100), or about $ us. 237.93 (two hundred thirty seven, 93/100 US dollars).
Taxes
Which Taxes Do I Have To Pay
In Bolivia, businesses are required to pay the following taxes:
• VAT (Value Added Tax) – This is a sales tax that also applies to services and permanent imports. In contrast to other nations, VAT is included in the price of goods and services in Bolivia, and their portion is 13 percent.
• Corporation profit tax IUE. – This tax profit is derived from financial statements and is equal to 25% of each annual management’s net profits as of December 31 of each year. Because it is believed that all income would be forwarded to the branch’s headquarters abroad, IUE branches must pay an additional 12.5 percent of the total amount remitted outside. As a result, starting a new business is advised.
• Transaction Tax IT – This is a 3% direct tax on gross income received and paid in each fiscal period.
• Financial Transaction Tax – This tax levies a rate of US $ 1.5 per transaction of US $ 1,000 or its equivalent in national currency with value maintenance on operations in foreign and local currency with value maintenance.
• Property and vehicle tax. – This tax applies to companies that own real estate and/or automobiles, and its tax base is determined by each municipality, with local governments and the National Tax Service overseeing it. This tax is paid once a year and is based on the property’s location, construction quality, car model, engine, and other factors.
• Real estate and vehicle municipal taxes. – Any property and vehicle transfers. Your taxable income is 3% of the transfer’s value, and it only applies when a firm sells a property or car to a third party.
Do I Have To Pay Double Taxation
Bolivia’s tax laws are applicable throughout the country. Bolivia has also signed international tax treaties with the Republic of Argentina, the Federal Republic of Germany, the United Kingdom of Great Britain and Northern Ireland, the Kingdom of Spain, the Kingdom of Sweden, and the Republic of France to avoid double taxation.
Bolivia is also a member of the Andean Community of Nations, an international organisation that approved Decision 578 to avoid double taxation between member nations, including the Republic of Colombia, Peru, Ecuador, and the Bolivian Republic of Venezuela.
These international accords stipulate that taxes imposed on natural or legal persons, regardless of their nationality or residence, are taxable only in the country where the taxes are imposed.
It further indicates that, in order to avoid double taxation, when a corporation operates in two or more countries, each of them may tax the taxes earned in its territory as if it were a different, separate, and independent firm.
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